Sustainable strategies aren’t just good for the planet… They’re good for business
At the beginning of last year, the Business and Sustainable Development Commission claimed that sustainable business models could open up 380 million jobs by 2030 and unlock economic opportunities worth at least $12 trillion USD. Unlocking these benefits will require businesses to adopt new business models, disruptive technology and mindsets. The circular economy is part of this vision to reimagine supply chains to enable reuse and renewal, maximise value, preserve resources, and shift away from the make, use, discard economy. The principles of the circular economy are encapsulated in the Sustainable Development Goals (SDGs), and represent a tangible opportunity for change. The question is, are businesses taking it seriously?
Sustainability makes sense
On December 10th, 2017, viewers of the BBC’s Blue Planet II were confronted with the harsh reality of plastic waste. According to Lancelott, the final, hard hitting episode of the hugely popular series sparked a consumer movement against single use plastics. The consumer led ‘Blue Planet agenda’ has motivated UK businesses to reconsider their sustainable strategies, but Lancelott’s interest in the circular economy began long before Blue Planet II highlighted the extent of the problem.
“For years now we’ve been exploring synergies between our businesses design and technology,” says Lancelott. “We got interested in the circular economy as an opportunity and a mega trend. It’s something that clearly plays to environmental opportunities but comes from an economic, commercial case. Sustainability is really an opportunity for business.”
PA has since become a member of the Ellen MacArthur Foundation’s Circular Economy 100 group, which aims to drive circular economy development. PA is also a knowledge partner for the UN Global Compact’s Project Breakthrough, helping to develop a set of disruptive technology briefs and creating a framework to position sustainability within innovation processes. They have also worked with numerous startups including Skipping Rocks Lab, an Imperial College London spinout that wants to replace plastic water bottles with biodegradable liquid pouches made of seaweed alginates. Another example is EcoBooth, which develops sustainable booths and other key elements for events. The start-up will showcase their sustainable products and services in the Innovation Lab at Disruption Summit Europe, as well as the PA Consulting booth, this September.
There is clear support from startups, but are big businesses getting on board? Larry Fink, CEO of BlackRock, has stated that any company that does not take the sustainability agenda seriously is not a company that BlackRock will do business with. As the world’s largest asset management company, this presents a real incentive for firms to prioritise sustainable growth.
“Clearly this is driven by a smart bet that a lot of commercial success rests on the sustainability agenda,” explains Lancelott. “Leading companies are taking the long term view and are starting to use the UN’s SDGs as a north star to think about their strategy.”
Circular economy challenges
The drive for sustainability exists across sectors. The problem is not that businesses don’t want to change, but that they don’t know how. This is especially the case for larger, established organisations that have profited from traditional supply chains.
“When we talk to companies, they understand the economic benefits but don’t know where to start,” says Lancelott. “They come up against the challenges of doing something that’s new and innovative, and cuts across existing value chains.”
Lancelott explains that making the most out of the circular economy necessitates a shift in thinking.
“You have to start thinking about materials that can be renewed and reused, design for reuse, upgrades and disassembly, and try to create relationships with consumers that are focused on performance and utility rather than asset ownership,” he advises. “The challenge is enabling the transition – it’s not necessarily something you can do on your own. You have to think about relationships and collaborations.”
An opportunity, or a necessity?
Prioritising sustainable development is vital for organisations that want to maximise their resources, improve value chains and deliver social impact. Any business that neglects to recognise the shift to a circular economy is likely to fail. As well as pressure from consumers, businesses now have to respond to the sustainable sentiments of the investment community (case in point: BlackRock) and their own employees. This is something that PA has directly experienced.
“Employees want to explore and take this forward. Across our firm, there are now 60 people actively engaged in cutting across existing business structures. It’s something that’s important to them personally,” says Lancelott. “But then businesses need to work out what they want to do – do they run pilots, embed is as part of the mainstream business, or split things up into separate businesses?”
The answer to that, of course, depends on the company itself and how quickly it can move. Sustainability now goes hand in hand with innovation – sustainability requires innovation, but innovation has to be sustainable. Applying or encouraging circular economy values is the first step. Following this, businesses can begin to address the practical problems associated with legacy supply chains.
Sustainable business is about doing the right thing for the planet and for society, but it’s equally about tapping into new opportunities and making products and services more robust. While companies may well support sustainability for benevolent reasons, they are undoubtedly also motivated by a desire to succeed in shifting markets and economies. As consumer pressure translates into government initiatives and legislation, it will become all the more important to prioritise circular economy solutions.
To find out more, book your tickets for Disruption Summit Europe 2018 here.