Keynote Presentation, September 24, 2019
Circular Economy Event, Confederação Nacional de Indústria (CNI)
São Paulo, Brazil
Presentation is in Portuguese. An English transcript follows.
Thank you, and good morning to everyone. Thank you to you all for being here today. I’m very pleased to be here with you today to speak about the regenerative economy.
I’d also like to thank the team from CNI for a voyage that has already been wonderful. It will be an interesting conversation with you exploring the idea of a regenerative economy, beyond a circular economy.
(1:22) If I am successful, my objective is just to plant a few seeds on the theme of the regenerative economy, and what it entails.
And so to explain a little bit: I have just one purpose, all day, all week, all year long. I have the purpose of supporting the transition to this regenerative economy.
So today I will speak a little bit about who I am and what gives me the right to be here speaking to you today. And then I will explain what I mean by “support the transition”. There were already several speakers earlier talking about a transition. Things are changing. How? What can I do? And what would be your role to help with this transition? I will touch on this a little more. And of course I will explain what I mean by a regenerative economy – as I already mentioned, beyond the circular economy – but of course I will also speak about the circular economy.
(2:22) And so to begin with a definition, because I will speak a lot about this thing called regeneration, and it’s an emergent theme which means the definition will evolve but I will explain how I understand the regenerative economy just to begin then I will introduce more about this.
For me, the regenerative economy only has three important characteristics. Everything else is a detail. It’s very simple.
(2:56) First of all, this economy and all of the businesses that make up the economy, capture more carbon than they emit – in the present and for several decades to come – until we have realigned with the cycle of nature, since nature already knows how to emit and recapture but we’re a little bit behind in following the rules of nature.
The second characteristic of this economy is that it restores biodiversity, and it restores ecosystems through the businesses that are part of this economy.
The third thing – also very delightful and simple – it generates quality of life through means that are just and inclusive for all.
Only this, these three things. These would comprise a regenerative economy. If there are people here now thinking, “Huh… That’s a bit absurd! A little ambitious…” Well, what does the economy serve? It’s here to serve us, not the opposite.
(3:50) So I’ll explain a little about myself and how I happened to pass through this regenerative economy door to introduce a little more. But before I get there, I will share that the team from CNI had invited a couple other people who couldn’t come.
First they asked Bill McDonough who is pretty much the grandfather of the circular economy. He had another commitment and couldn’t make it.
Then they invited Bob Willard who is a great mentor of mine and that of many Canadians I know, and who is like the grandfather of the business case for sustainability. He also couldn’t make it because he doesn’t travel by plane these days.
And so it turns out that I’m the one who showed up.
In case my talk doesn’t work out, or you had other expectations for this talk, I put their websites here because there are many resources and articles that you can download for free. So feel free to continue researching on their sites in case what I’m saying doesn’t make sense, because we’re going to go on a bit of an adventure here.
(5:04) I said I would tell you a bit about who I am. I am Canadian. I was born in Toronto. Here we see the CN Tower. And when I think of the city of my childhood, I think of these two sides: a large modern city – the largest city in Canada – and also this impression of the forest, because there is a lot of forest in the city itself, and I also had the good fortune to spend time in the forests of Canada with my family.
So I think this is me. This modern person who loves the life of the city, industry, all the innovation. But I also love the forest. I learned a lot in the forest itself. I believe that when I was a child the birds spoke to me, gave me messages. The trees too. And I’m still receiving those messages because they still have a lot of meaning, and they have the instructions.
My mom was a nurse and my father was a civil servant. So the discussions at our dinner table were always very complicated. I learned – I and my three siblings – to have this approach of embracing complexity. In terms of health, food, community – various themes that were somewhat complicated.
(6:28) My father reached a relatively high level within the provincial government in Ontario which is like a state but what we call a province. He was a deputy minister for a few years and back in those days when one was learning to become a deputy minister – which is not an elected position, it’s a civil service role in Canada – to learn this role in this time one started in a deputy minister role in a ministry that wasn’t that complicated or important and that no one was paying attention to: the Ministry of the Environment. Then he became deputy minister in the Ministry of Treasury, and then his third post was as deputy minister in the Ministry of Mining and Northern Development.
(7:10) So when I say that the conversations at our dinner table were complicated and full of diverse opinions and complexity, I really mean it. It was an important part of my education.
There was another part of my education that gives me great pleasure and which allows me to be here with you today speaking Portuguese. I mentioned that I’m Canadian, but I did an exchange here in Brazil in the year 1989/90. It was a very interesting year here. It was the year of the first election – a very interesting thing for this young Canadian girl to understand how a democracy is born. It was a pleasure and an honour.
I lived in Brasilia, in the capital. But the high school I attend – a regular Brazilian high school – did a field trip to the Amazon. So I had this opportunity to go to the Amazon. We arrived, my class, in Manaus and from there we took a boat which navigated up the Rio Negro. For one week we lived aboard the boat and we studied in a school – in this classroom – in the middle of the forest. I’m not in this picture because I’m the one who took the picture.
(8:26) It was here that I learned about biodiversity and about how a forest functions, on the technical side. It was also this time, during this month of February 1990, that I learned for the first time about climate change. I was very young and didn’t understand. I thought, “Whoa. This is a serious crisis!” I wanted to go marching in the streets, you know? We were all thinking, “This is a really serious thing…!”
We didn’t go into the streets to march though… Until now. Things are changing a little on that front but I’m older now.
It was a very good experience that continues to bring me many important things right up to today.
(9:05) I returned to Canada. I went to university. I studied languages and literature – German and Spanish, because they didn’t have Portuguese at this school. They should have! And I studied French, and world religions. I was always very curious. I’m a religious mutt but I was aware that religion really mattered to culture, politics and understanding – with what we recognize or don’t recognize. I wanted to understand more. It was an interesting education.
Then I finished university and wanted to start paying my bills. So I responded to an ad in the newspaper. I’m not sure if it was this way in Brazil. At that time, you looked for work in the newspaper reading the career ads. I saw an ad for a job at WWF Canada. I succeeded in getting the job. I worked there for a couple years. It was great. I learned a lot. It was a great team, very well run and up till now I still have really good friends from that time in my life.
But there was something that didn’t sit quite right with me, which I didn’t really understand at the time, that this organization – a very well recognized one, a very good one – raised so much money to resolve problems. And we were busy, because there were a lot of problems already at this time. So I learned about the machine designed to raise money to solve problems. Something didn’t seem right.
One thing that did feel right, on the other hand, was that I had a boss who was very inspirational. One day she asked me if I would like to join her for a class on distance running. And since she was my boss, I figured I should do it. So we went to these distance running classes, and this was the first time that I ran a marathon. And even now this is a habit that serves me very well, this understanding of taking one step after the other with a long term vision. So I learned a lot at this time.
(11:15) After a few years I wanted to travel more, so I left for Australia for a year and then I moved to New Zealand. In New Zealand at that time it was very easy for a Canadian – being from a Commonwealth country, for example Canada, Australia, New Zealand – it was very easy to go there and work for up to a year.
I looked for work as a temp. I was placed in an electronics engineering company. I had the position as receptionist. The phone rang a lot. Why? Because it was – randomly – a time when the two founders had invented a little thing – wait, speaking of “little thing” there is a little red thing circulating here; please keep circulating it as you will see it will have something to do with this talk, so if a little red thing arrives, please pass it to the next person.
This little thing that they had invented was suddenly essential for the European telecommunications sector. When I arrived, it was 1998, basically on the border of globalization. I arrived as the temp receptionist, answering, “Hello…yes… You ordered 50 units? Okay. And they haven’t arrived yet? Okay…” The next week, “Oh, 1000 units? Oh… 20,000 units? 50,000? 100,000?” They had no idea how to fulfill all these orders because it had really caught fire.
So after two weeks as temp receptionist I became Manager of Logistics and Customer Care. It was a very interesting promotion. It meant there was a lot to do. I even worked a little in the factory – this image also isn’t me. I worked in the factory to understand what this electronic product was, where did all the components come from and how does this company work. It was an incredible education. I learned about growth, globalization, waste management, and lots of interesting things.
(13:45) And also, if you know New Zealand, you know there is a lot of wool. I am a spinner. And before spinning I had already knit a lot. In fact the sweater I’m wearing in this image I knit when I was only 12 years old. I was a kid who was always playing around with yarn and knitting. I believe this is relevant, just like a marathon, this idea of having a vision that is long term and understanding that there are these steps, just these little steps that lead to a place far away. And so New Zealand was a great place to be a spinner – in case you are looking for any wool.
(14:25) I returned to Canada. I’ll cut short the story of my life. If we have time over brunch or another time it would be a pleasure to speak more about a few years working at a financial services and insurance company and a few other adventures.
The year 2004 arrived and I learned there was a field known as “sustainability”. I hadn’t heard of it before but had always sensed we needed something to resolve this sort of situation at WWF, paying to resolve problems when – why do we have these problems? It didn’t make sense.
So I arrived in the field of sustainability. I won’t go through all the sequence. Instead of speaking about where I lived and the organizations I worked with, I will speak to what this work means. It’s almost like leg work or building blocks, seeking to understand the pieces of the transition that we are experiencing.
It’s tricky to explain. If my mom asks, “Lorraine what do you do in your work? I don’t understand it,” there are things I can actually show.
For example, I help with reporting. I think there are people here – please, show me if you’re in a business that publishes a sustainability or citizenship report. Okay there are a few of you. So you will already know these frameworks, such as the GRI (Global Reporting Initiative) and others.
I do a lot of work with this. For example this is a sustainability report for Novelis, an aluminum company. I will speak more about them shortly. There are also deeper reports. I have been working for the past few years with Citibank, one of the largest banks in the world, which has not only a sustainability report – which I also help them with – but also a report that has data about how they intend to invest in the future that protects and accelerates environmental principles. So there are reports that go more profoundly into these topics.
There is also a trend – one that is finally arriving in the United States, it’s already well developed in Europe – this idea of integrated reporting. This is a funny thing because up until now, most of the companies that publish reports have financial data over here, and then, as if it were another company with another voice and another core business, there is a sustainability report over there. Which doesn’t make any sense – it should be one body, one voice. It’s also a risk and a missed opportunity.
What happens today is that there is a framework that helps to have data that are easy to compare in integrated reports. This is a report from Coca-Cola that I helped with last year where they came out with their first more integrated report. It’s a step. There is still a lot of work for Coca-Cola to do to arrive in a regenerative economy, as there is for Citibank and Novelis. I show this to highlight pieces of support for the transition, to show how things are changing.
(17:30) We don’t have time today to go into all of these frameworks shown here, but they are part of the transition. I would like to – and I’m here all day if there are people who would like to discuss this more. I’m actually here all week. There are a lot of details in here that help to construct the transition. These are steps, not the whole picture.
Beyond writing and working on corporate reports, I also work with various partners including those who create reports about reports! Or more seriously reports about this transition of business models.
Who was at the CNI event – I think it was last year or the year before – with John Elkington? Were there people here who saw him speak? Ah, not many. And so who knows about the concept of the Triple Bottom Line? I see this is better known in this room. John Elkington was the person who coined this term 25 years ago and he is a collaborator of mine, we have worked a fair bit together. We published this report about innovations in business models, including those which create a more circular economy. You can download this report if you’re already done with the sites of Bill McDonough and Bob Willard – you can now research John Elkington.
(18:50) So this is what I do that is quite visible. But this transition to the regenerative economy is more complicated than just speaking about reports. Documents can help to share information, but in truth the signals, the transitions will take place in the communities on the ground. And so sometimes I help with projects that are happening on the ground.
For example I know relatively well and work with people from with the forestry industry here in Brazil. Through this work for example we can see that the certification of FSC (Forest Stewardship Council), which exists to show the investor or the consumer that the product of the forest industry is produced in the right way. Okay, fine. This is what certifications are for.
But let’s go back in time a bit, to the time when I was at WWF during the years 1995-7, around when the FSC was born. It was born as a collaboration of NGOs – WWF and a few others. If you remember this time, there weren’t apps, there weren’t open source databases, there weren’t even cell phones. Beyond this, the FSC was made by – with respect I note this – by people in the global north, speaking about the forest industry of the north which has conditions for business as well as for tree growth that are very different. People of the global south want this certification to be well designed for them, which requires a change. And not just so they can have the certification and the seal on their products, but rather so that it actually changes things for the better. Which is complicated, because you can’t simply change a certification that has a lot – really a lot – of governance. So I was part of a discussion with Ibá – Indústria Brasileira de Árvores – and others here. This is just an example of how I support this transition
(21:08) But now we are – I will tell you a bit here – we are really just talking about the transition that is more or less sustainability, which is just better than bad, making things better to do less harm. But we have to go much, much further. This marathon – we’re just in the early kilometers. I already spoke of John Elkington, the one who introduced the Triple Bottom Line. Last year he published an article in the Harvard Business Review to recall the concept of the Triple Bottom Line. It’s a little bit provocative, because in reality you can’t really “recall” a concept. But he wanted to provoke as if to say, “Look, 25 years ago I put this concept into the market. And everyone – okay not everyone, but many people – have said, ‘Yes, yes, yes! We’re a Triple Bottom Line company! Look at our report full of data that aligns with the this!’ There are even integrated reports. But the system is still pointed in the wrong direction.”
And so if the Triple Bottom Line was to change business, if it was to create value by means that are truly Triple Bottom Line, then it’s not working. So let’s take it back to the shop to repair it. We’re still working on it…
So I work with as well with him, thinking about, what would be necessary, what do we need for this transition?
(22:35) Let’s go into the darkness for a moment, to talk a little bit about what’s happening in the world. Why change? Transition – what for? What does it serve? We already heard a few things in the previous discussions and I think you are all awake and so we already know that there are some problems. This is the idea of the Anthropocene – that we’re in a geological age that has been brought about by humans, and that there are many things interconnected. It is probably impossible to read this slide, so I’ll help a little. What is important is the trend of a great acceleration of a lot of different things at once. Here is the time horizon and in the middle is 1950. I’ll just highlight a few examples but you are already familiar. Water use – it is growing, this is not a highlight you didn’t know. Loss of biodiversity – it’s going very quickly. Number of McDonald’s restaurants – there were none, now we have them. This isn’t to say McDonald’s is bad, but just to notice the trends. Consumption of paper – there was almost none, now there is a lot. These are the characteristics of the Anthropocene that is happening.
To be a business that is going to have success with these characteristics in this Anthropocene we’re going to need other measurements to understand. Because, “although the future might look pretty bad, we still have a lot of present.” It was a great friend who told me this and I thought it was wonderful – his name is Fabrício Muriana. I really need to thank this Fabrício because I can sometimes feel sad about this portrait of the Anthropocene, it seems almost impossible. But there are a lot of possibilities now in the present and we’ll talk more about that because that’s how I understand my role in this present.
That’s a seed to see what your role is.
(24:42) So create value in this Anthropocene that we are experiencing, and we are experiencing it even if we don’t want to, we need another way to understand “value.” Until today the majority of people when they say “value creation” usually mean the business is at the centre and maybe we need to balance a bit of society and environment on the edges but at the centre of the business is the business. This is shareholder value.
Then we arrive at Shared Value which is a little like the Triple Bottom Line or sustainability. But look at the size of business here, as if it were the same size as the environment – which is the entire planet and which has society within it. This doesn’t make sense as a mental model. Yet it is this way that up till now the majority of sustainability initiatives are set up. I am saying all of this with respect – I am part of the industry that did a lot of this. I am just as much to blame as the next one.
We need to get to a mental model – and to a business model – that takes into account reality. And in reality, it turns out, the business and the whole economy are based within society – made up of people – who only exist because there is a planet, because there is life, because there is nature.
(26:08) So how do we get there? Earlier I was talking about reports and frameworks that help collect data and goals in reports. There is a new one that aggregates all of these – the GRI, Integrated Reporting, all kinds of people speaking about the needs of reporting – to determine how to understand a new benchmark to arrive in the future we want.
I’ll touch very quickly on this and then we’ll dive into some examples to see how it plays out. I stole these slides from the folks at the Future-Fit Business Benchmark – they’re fully open source, and there is a lot of great documentation about this including video clips to help explain, all of it freely available. I participate in the committee of people who review each version before it’s published and I think it’s very well done. I have a lot of confidence in the rigour of the research that they do and in the way they have shared it with the marketplace.
What is the mental model that changes here and how can it help with the transition? Normally if a company wants to demonstrate progress and how they’re moving forward, they’re going to make a comparison. Often it’s a comparison with the previous year or some point in the past. Or, even more common is a comparison with others in the industry sector. We’re here, there are others ahead of us, others behind and we want to be number one, or even just number two. And it’s important to note that this is how the investor raters and rankers typically look at the data, analyzing by industry to see who is in front without really knowing where they need to go. It’s very common and it’s a challenge we’re going to tackle today.
Another way – and we’ll look at an example of this – and it’s good, and I say all this with respect. It’s all progress, they’re all steps. So another step we’re seeing are these goals that are good, even very ambitious, but they don’t have context in the sense of the planet, or of how life actually works in terms of the laws of thermodynamics.
So this is the norm. Pretty much all we see fit into one or the other of these approaches. Whereas what we need is to understand the future we want, and where would be the break-even point, which would mean that you’re not doing harm through the business model.
One more time, think about if you’re finding this ambitious. What a strange thing, a company that doesn’t do any harm – this would be an absurdity, simply too ambitious. Let’s change this mindset.
(28:55) So they have a thorough benchmark with lots of documents, and there are people in Brazil working with this as well. In fact The Body Shop, which is now part of Natura, already have this as a standard that they are trying to reach.
When I speak about the transition, this is what I’m talking about. This shift from saying, “We are better than we were before, or better than those guys over there…” and instead to understand, “There! That is actually the future we want, and we understand where we are now.” It’s a marathon of 26 miles or 42.2 kilometres to get to the finish and to carry on and run more races, and now we realize that we’re only at kilometer 2, or 4.5. To know where we are – it’s very important.
So I spoke about seeds. Here are some cotton seeds growing on my window sill in New York when I lived there. Now I’m based in Montreal. We’ll talk more about thread later.
(30:00) Okay. So I was invited here because this is an event about the circular economy. So I should talk a bit about the circular economy. But as it happens, the circular economy is just one piece. I’m very sorry to say that there are people already much further ahead talking about how this circular economy that speaks of “value chains” is missing a sense of “value cycles.”
I’ll touch quickly on this just to give an idea of where we’re heading. Let’s go. Once again it’s impossible to read this so I will help a bit. There are folks working, once again, with the existing frameworks aggregating materials, they’re not working in isolation. This group, r3.0 is also very open, making it easy to download any material. They are working to help companies have a standardized way – and resources – to measure and know where we are and where do we have to get to.
But if we only have tools – and the majority at the moment only are this – that speak of “value chain”, and a chain is linear, and you want to close this loop, how would you do it? So they went deep into this idea of the circular economy and had some criticisms. For instance, the majority of the tools speak of reducing waste, or to close the loop on just one material. But businesses have many materials, many value cycles – it’s much more integrated and complicated. This is how life works. Like a forest.
So they help to demonstrate that it’s not a value “chain” but rather a “cycle.” There are also a lot of resources speaking about how to understand these industrial links to align them with natural laws, the laws of thermodynamics. Because there aren’t other laws – well, there might be on some other planet but where we are, there are these laws that aren’t really up for debate.
This is a very useful resource being developed today. I recommend – after you look up Bill McDonough and Bob Willard – that you have a look at this as well. It’s worth it.
(32:10) Now, since I’m here with you today, let’s talk a bit about the circular economy. It so happens that there is a very good definition from the Ellen MacArthur Foundation – which is really the global reference on the circular economy – so it’s worth taking a look at their resources. [Their definition: A circular economy is based on the principles of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.]
For me the most important words in the definition are “designing out waste and pollution,” and – remember this is their definition – “regenerating natural systems.” This is the definition of the circular economy, which is quite similar to the definition of a regenerative economy. They have a lot to do with one another. They’re sisters.
I place regeneration in the mix because normally what we see in the discussions about the circular economy is that it’s often based on just one industry or even one company. I want to widen this discussion – and it’s not just me, we’re seeing a lot of discussion about the regenerative economy.
It’s complicated. If you go to the infographics of Ellen MacArthur we do already see these cycles – industrial cycles and biological cycles. It’s possible to see that everything is integrated and fairly complex.
(33:44) Let’s touch briefly on some examples. I’ll speak about Novelis which is more or less on the side that I think people know – this idea of recycling, industrial innovation. It’s very well done, important steps. It’s not to say that it’s not enough but rather to show that these are important steps. I’ll also touch on Interface who in my opinion are doing a lot of things in a very integrated way.
Just to check if there are people from Novelis or Interface here. I know that both have operations here. Was that a hand? No – it wasn’t. Okay – there are people here in Brazil which is why I chose these two.
Let’s have a look at Novelis. They’re the largest producer of rolled aluminum products in the world. They have operations in 11 countries, so they are relatively global. They operate here in Brazil, in Canada too. The products that they sell – the majority are for beverage cans. So their client would be Coca-Cola for example.
And also they serve the automobile industry, such as Ford and Jaguar-Landrover, and another area is electronics, so I probably touched aluminum from Novelis – or at least from the predecessor company, Alcan, when I worked on those little widgets in New Zealand because aluminum is in a lot of these things.
There came a time – around the time that I was helping with that first report – where they looked at the data, and the CEO of the time, Phil Martens, had a sort of personal transformation. He came to understand around the year 2010 that this subject of climate change was a real crisis. And not just on the social side, where there would be a lot of impact on many people, but also on his own business. He saw that it was going to arrive, and there could be opportunities by putting a level of ambition on the table that was much higher than before.
So they announced a goal to switch to producing all products from 80% recycled raw material. At the time of announcing this goal, they were only using about 30% so it was a very ambitious goal. We can debate another time if it was the right goal, but that is the way that they did it.
It’s very easy to speak about this. But I want to touch on this because I mentioned my role “supporting the transition” – think about your role – and it’s very easy to speak about this, but let’s look at their business model. These green circles represent parts of their business model which are basically within their control. The other parts are controlled by others. And yet even in the parts they control, it was complicated.
Notice that if they want to change to source more recycled material, their suppliers of mined materials – who have been suppliers for decades – are suddenly going to be supplying less. These are relationships among people, people with jobs. And it’s also complicated to change contracts. It was a transition of reality with suppliers. It’s very easy to sit here and say, “The circular economy is great!” but if you are a supplier losing business, it’s not great. It’s complicated for everyone.
Even in the parts of the business that they control it was complicated. For example, if they want to recycle and reuse, it’s a process very different from the one where they purchase non-recycled metal. These are different factories, different educations, different training. It was difficult.
(37:40 And think about how here in Brazil you already know that there is a very high rate of recycling, but it’s part of the informal economy. There is a formalized part but also an informal part. So the issue of governance is complicated. To increase the amount they purchase through this informal economy, or to formalize it, to legalize things – this is beyond the responsibility of the company but yet it has an impact on the company.
Meanwhile in Germany where they have large operations, there is already a high recycling rate and there is a more formalized economy for this which makes it easier in that sense but they didn’t have sufficient operations to recycle the material. So they invested a lot of money – I believe in the year 2014 they invested above $200 million to build the largest recycling operation in the world.
So it’s not a small thing to say, “We’re going to source more recycled materials.” But they did it. They did what was needed and we are arriving almost at the date that the goal was set for, which was 2020. What happened? During all these years with this ambitious goal they sold a lot more tonnes of aluminum. So, they sold more products. Income also went up although you will notice the lines on the graphs don’t exactly match which is because the aluminum market went through a period of price pressure at this time, which had nothing to do with recycling but it had a lot to do with the business, remembering that all of these conditions are dynamic beyond the idea of recycling more. They survived but it was difficult, and income did increase.
Also interesting – remembering why are they doing this recycling, it’s not just to talk about the circular economy but because it requires much less energy and needing less energy means reducing emissions. And so the absolute emissions were reduced while production increased. This isn’t enough yet, they are not yet net-sequestering carbon but they did indeed reduce emissions and these are important steps in this marathon. Did they reach the goal? No. And I’m sorry – in these very transparent reports, I wasn’t able to find the data point for 2016. It might be that I need to look more closely. But they did increase their recycling rate, more than doubling it. So without this very ambitious goal they would not likely have reached this level. And they’re moving forward.
I think of this as a very practical case to show you that this is complicated, it touches every part of the business model. Is it ready for the future we want? No. But it is arriving at the water station at more or less the 15km mark on the route because they are running well and moving forward.
(40:48) Let’s take a quick look at Interface, another example that I find very interesting because it’s very integrated and it’s been a long time. Who is already more or less familiar with the case study of Interface? Okay folks, I will touch very quickly on just two things but there are 200 so please, forget me, Bill McDonough and Bob Willard. Run to Interface to read more about what they’re doing. It’s impressive and practical. Let’s go.
They are producers of carpet, commercial and residential. It’s been a while – more than 25 years – that they’ve been thinking about how to integrate sustainability. They are going far. One example is very simple and practical, to think in terms of the circular economy: they think of their clients as suppliers. Because their clients have carpeting, and they make carpeting so they receive used carpeting that was otherwise destined for landfill – it was going to be thrown “away” but we already know in the conversation of the circular economy that there is no “away”; for example I am from away but here I am, so there is no away. Interface takes the carpet of their client, and they created a technology to do this, to separate the parts of the carpet to create new product, mixed with what they were already using, to make the carpet backing – sorry not to have the photo of that – but to make the new backing of the carpet that they will sell. So the supplier is client, and the client becomes a client again. It’s quite circular.
(42:30) Okay sure but there are lots of examples of this type of thing, taking a product to make another product. It’s good and we need more of this, a lot more, fast. But beyond one value cycle – don’t forget, to be truly regenerative we have to understand all of the value cycles, which are complex and highly integrated.
To that end, Interface has another initiative that is very ambitious. It’s underway now; it’s not yet complete. The idea is to build a factory that produces carpeting to sell into the market but where the factory functions like a forest. You see it’s not just me that talks to birds and trees – they do too. To avoid negative impacts on water or air, or on anything. The factory that functions like a forest – it’s called, “Factory as a Forest.” It’s not just a dream. They are working with people including scientists and architects to create a plan to identify, quantify create and implement. I just show a few brief things to demonstrate that it’s not a dream, it’s an actual thing that they are doing. It’s all on their website, you can see. There is even a slide that says, “Steal these slides” because they want everyone to understand.
So if I think about this future, this transition to be regenerative, Interface is taking steps – they are like the ultra-marathoners and they’re very committed to doing this. And they want others to learn.
(44:05) These are the cotton seeds that grew. I was able to pick this cotton from my window sill. Steps, steps, steps.
The regenerative economy, as we’re seeing, has a lot to do with the circular economy. But if I had to indicate the difference, a very important seed that I would plant in your minds, is that it is regenerative for the biosphere. It’s already in this diagram but the biosphere isn’t a little thing on the side, it’s the thing. Without this, there is nothing.
I’m going to go very quickly now to finish. Where is the little red thing? Is it still circulating? It’s there – good. Keep circulating.
Just to very quickly touch on this – and in the earlier talk I was very happy to hear a recognition that here in Brazil you have an enormous opportunity – on the financial side and on the side of job creation – in the bio-economy, which has a lot to do with climate change. I could speak about this all day. I won’t, I’ll just show this. You have this Brazilian Coalition that is a global reference. When I hear this talk of, “In other countries, in Europe, in the United States,” sure there are activities there, but there are here too and you can take advantage of this because the proposals by the Coalition are incredible and could be very relevant.
(45:40) I will tell a final little story. It comes from my imagination but it only mentions technologies that already exist. When I dream about value cycles, since each one is integrated with the other, it’s difficult to explain everything and so I’ll just skim the surface.
But imagine for example that there are investors who are saying, “I only want to put money where it will do good.” And they exist – lots of them. Just yesterday in New York there was an investor event, I got a WhatsApp message from a friend who is there [for Climate Week], where they announced – I can’t remember the amount, something like $3 trillion that they have ready to invest in clean investments. What will they be? Maybe this is your role to arrange this.
So investors want to invest in the right way. Consumers are a little confused but they also want to participate in this economy that’s good for their families, for their health, for their communities – they’re there and ready if we have something for them to buy. I put this image [of an electric vehicle] to provoke a little because I know that here in Brazil there has been renewable fuel already since back when I did my exchange. But this trend in electrical cars is increasing a lot globally, so it’s relevant.
But wait: electric cars are regenerative? No. Not if the energy needed to power them is produced in a way that is terrible. But we’re here in this present now. We still have this present even with that terrible future. So if there is electric power that is produced in a way that pollutes, the good news today is that during the decades that it will take to complete the transition to 100% renewable energy – which we will do but it will take some time even in the best of scenarios – we already have at least two technologies that exist to make products that can go into a car. There is an industrial foam made by a company called Covestro in Germany that makes foam from CO2 captured at the power production stage. Instead of it being emitted, it is captured and turned into a raw material. Meanwhile Interface, the same company mentioned before, has a carpet product made from captured CO2.
It’s not enough but these are steps during this transition. And it so happens that there is a prize called the Carbon XPrize that incentivizes innovation on this very topic – how to capture what was going to be emitted, and capture it as a raw material. Because we know that during this transition we’re going to emit a lot of carbon – a lot that we shouldn’t emit. There are various innovations and products, and there is one among them that’s from a company called Carbon Upcycling Technologies, a small Canadian company in Calgary that makes an industrial product out of captured CO2 at the electricity production source that goes into sewage pipes. What do sewage pipes have to do with the regenerative economy?
If you imagine the product they make, it protects the interior of the pipe. Why is this important? Because what is normally used today means the pipes fail after a few years because of the erosion caused by the sewage and they need to be repaired which costs money. We also know that there is a lot of construction of infrastructure in cities around the world. Imagine how many sewage pipes are being constructed today, and then imagine lining them with a substance that doesn’t last as long as this innovation which is made of captured CO2 that was going to be emitted. It could be a big thing. The volume is large. Steps. Steps.
(49:46) But wait. Sewage pipes. Infrastructure. These are small steps. But if we follow these sewage pipes there is already existing technology, already installed in some cities where sewage isn’t a waste product, but rather a resource. Why? Because there is heat that can be converted to thermal energy. There is water that can be made potable. And there are solids which can be converted to plastic just like this poo chip that has been circulating. This is made of sewage, this little red thing that has been going around the room. It’s an example of this technology that makes plastic that can be turned into anything, even this little thing in my hand could be made of sewage.
These are just small examples of what is possible with technology that already exists, with existing value cycles that we already have and need to increase.
So when I think one more time about this saying from my friend Fabrício, that it could be that the future looks pretty bad, but we still have a lot of present, I find myself wondering, what is my role, and what is your role in this present?
Finally, I had the chance to make a little bit of thread after all these steps with the cotton from my window.
Thank you very much to all of you.