New Bottom Line Volume 14.5 – Eye of the Beholder

Thursday, June 30, 2005

I’ve encountered very different perspectives from the world of business in the past few weeks – emblematic of the challenges our industrial society still faces.

I spent two days recently at the “Cradle to Cradle Design & Intelligent Materials Pooling in Practice” workshop presented by Foundation for Global Community in “Silicon Valley, CA” (actually Menlo Park, but hey, which name has the buzz?). Michael Braugart, Bill McDonough and others (including Peter Senge and Joe Laur of the Society for Organizational Learning) guided 150 people through the fundamentals and the challenges of C2C, and a day of small group grappling with putting the concepts to work.

Dr. Braungart (co-founder of McDonough Braungart Design Chemistry (MBDC) and advisor to Herman Miller, Nike, Ford, SC Johnson, Interface, Unilever, BASF, Volkswagen and others) laid out his strategies for moving beyond making products less harmful to making products that support a sustainable future – in his inimitable way:

“We still have people talking about ‘sustainability’! Nothing is more boring. Are you proud if your marriage is ‘sustainable’? We feel guilty, and cut our hair to use less shampoo. It’s guilt management and celebrating mediocrity.”

Braungart showed gas chromatograph analyses of the toxics that offgas from products in everyday user, from electric shavers to childrens toys – “Pocket Polly emits more chemicals than gasoline station” – to even natural products like wood. “Weapons of mass destruction,” he called them, as we seal buildings, in the name of energy efficiency, full of products not designed for indoor use.

One indicative result: asthma is now the most prevalent children’s disease, with 40% of children suffering from allergies, vs 2-3% a few decades ago. “And smart people now go to business and law, not science.”

The key, Braungart advised, is the transformation of environmental issues into issue of quality. “First be effective – do the right thing; then look for the right tools. Efficiency may be one of them, but there’s no point being more efficient at producing a harmful outcome.

“Students and top management understand this,” he said. “Middle management hates us.”

The new design criteria, according to Braungart: Cost, function, esthetics, ecological intelligence, fairness, fun: Total Beauty Design. “It’s not beautiful if it’s toxic, and if you can’t make a living.” The design principles: Waste equals food; Use current solar income; Celebrate (don’t just respect) diversity.

We need to look at the molecules, it turns out. Braungart outlined “five steps of eco-effectiveness”:

He didn’t stop at five, since the next step was to build on this “creating strength” with “purchasing strength,” in which companies with common list of preferred materials pool their purchasing and logistics strengths to gain economies of scale and rationalize supply chains.

Two of many applications discussed: a complex product, and a relatively simple one.

The Ford Model U concept car is designed to go into enzyme bath – the whole product – at 60k miles that will dissolve and filter out the glues, and “keep the intelligence of the materials in it.” Upcycling. “There’s no innovation in recycling.”

Shaw Industries (the country’s largest carpet company, now owned by Warren Buffet’s Berkshire Hathaway) see s C2C as its goal and focus, according to Steve Bradfield, their Corporate Director of Environmental Affairs. “All the other stuff is transitional.”

“We’re looking way ahead; our EVP now talks about ‘what the company will look like in 25 yrs.’ It’s not about quarterly profit, but about how do you stay in business?” Bradfield notes. “C2C is a beautiful thing, even to a bean counter if it’s profitable.”

Shaw began its materials redesign in 1994, and “exited PVC in 2004. “Product recovery is at 50%, with a 30% recycle process efficiency; “so 25% of new backing from old tile… at this point, while energy savings of 56% nets to 14% (based on that 25% use).”

Shaw’s EcoWorx backing won a Presidential Green Chemistry award in 2003, as an alternative to PVC, with 40% recycled content. Among the business benefits: Shaw can get more of the thinner and 30% lighter carpet tile on a trailer (7000 square yards vs 4000).

This highlights the challenge we often see as companies struggle to comprehensively and accurately tally costs and benefits. How well this is done can guide business strategy as well as gate investment decisions – with significant competitiveness as well as profit impacts. (Life cycle assessment isn’t the whole answer. Nylon flooring will last 30 years, Bradfield notes, and that’s often the figure used in LCIs, but it’s generally pulled in seven.)

(BTW, it takes some hard work to find any of this on the main Shaw web site; turns out it’s only on the Shaw Contract Group sub-site.)

Note: MBDC announced the C2C certification system at the NeoCon conference in June, to evaluate and certify the quality of products based on the principles of Cradle to Cradle Design. As described in the launch announcement:

I mentioned “very different perspectives” at the top of this posting. Here’s the other:

I spent a few days recently with several dozen CEOs, VPs environment, and risk management executives from a variety of companies, exploring the challenges of “environmental health and safety” implementation and results. The wide-ranging and universally high quality presentations included a brilliant and sweeping “futures scan” by a very senior executive of a very large energy company.

It was captivating. It touched on everything from oil prices to geopolitics to China. And it didn’t include a single word about greenhouse gases or climate change.

Food for thought.

(c) 2005 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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