AkzoNobel's Andre Veneman urges businesses to develop a new mindset towards radical resource efficiency
In this world of constrained resources, businesses across the globe are working hard to become much more efficient and to minimize waste. Although progress is being made by some, the reality is that the world is still terribly inefficient.
We have become very good at working efficiently within silos, in very specialist processes but we fail to spot opportunities across different systems. We simply don't ask ourselves the right questions - would someone else want this waste product? Could we harness it as a power resource? Could it be used somewhere else in the cycle?
Unfortunately, because our economy has been built on the false notion that there is an endless supply of cheap materials these questions often go un-asked. According to the Ellen MacArthur Foundation, the adoption of circular business models in the EU manufacturing sector could realize net materials cost savings worth up to $ 630 billion p.a. towards 2025-stimulating economic activity in the areas of product development, remanufacturing and refurbishment.
Our current model of becoming more efficient incrementally will not be enough to realise these savings. Furthermore it is anticipated that rare earth materials, such as indium needed for smartphone touch screens, europium used for light bulbs and erbium, which is essential for fibre optics, are all due to be exhausted within five to 10 years. A radical change in mindset is therefore required.
We need to dismiss the whole concept of waste and think about entire operating systems. Every litre of water can be re-used; every vegetable leaf can be used as food or as biomass for energy. Ultimately it's not about using less and less but about thinking in a completely different way to find a new cycle that works. This requires us to see value in every material that we use. This is not about corporate social responsibility but about good business sense as a scarcity of raw materials, combined with a rapidly growing global middle class, puts pressure on our current linear model.
Moving to a more circular model allows a company to keep the value of its stock of raw materials within its own system. For example Desso, which makes carpets and artificial grass, is already experiencing the benefits of this through a combination of leasing out its products and making them easily recyclable.
A circular model also provides incentives to create products that are longer lasting. At AkzoNobel because we supply coatings as a service, we design for longevity. Our outdoor and indoor paints are designed to last to reduce both maintenance costs and environmental impact. Furthermore, our coatings work hard to protect the integrity of the original substrate to ensure it can be reused effectively.
This circular thinking can't just be restricted to a company's own operations. Due to the complex nature of global value chains it needs to run across to customers, suppliers, business partners and communities. If our customers want to produce products that can be 100 per cent re-used and recycled we should think how we can help our customers to design these. Ultimately if this approach is to reach scale, we will need to take a systems-based approach.
What all companies who support the circular economy are certain about is that the current system will at some point have to dramatically change - and so those companies which find early solutions, will stand to benefit.
At AkzoNobel we know only too well that our future hinges on our ability to do radically more with less. But our story is an optimistic one - we are determined to turn what is an obvious challenge into an opportunity and bring more value to our customers and society in general. We call this approach Planet Possible - it's our commitment to finding opportunities where there don't appear to be any.
André Veneman is corporate director of sustainability & HSE at AkzoNobel