A few weeks ago, and due in no small part to my friends at the Schwab Foundation for Social Entrepreneurship, I had the honor of being invited to the World Economic Forum’s Annual Meeting in Davos, Switzerland. It was an amazing opportunity as a young social entrepreneur – thousands of the world’s top influencers, industry leaders, and intellectuals sharing their knowledge, vision and expertise in an effort to help build a better world. And while the meeting itself wasn’t without controversy or accusations of rich-and-powerful collectivism, the ideas and insights shared across social, industrial and environmental boundaries were inspiring to hear.
One thing that was made abundantly clear during my time at Davos was that making a better planet requires good business and the entrepreneurial spirit, and the innovative minds I encountered feel the same way. I want to take the time now to share some of these incredible individuals’ insights, as well as a few of my key takeaways from the Annual Meeting.
Global Risks AssessmentFor ten years now the World Economic Forum has published the Global Risks Report. Aggregating survey data and insights from hundreds of the world’s leading experts and academic minds, the report details over two dozen global risks and ranks them in terms of likelihood and potential impact. Unsurprisingly, societal and environmental risks are among those at the top of the list.like this, pressuring those in power to open their eyes and start doing something is more important than ever.The need to target and proactively develop viable solutions for these threats was echoed further by Davos attendees like Johan Rockström of the Stockholm Resilience Centre, and WEF Annual Meeting co-chair Winnie Byanyima of Oxfam International (among many others), who stress that collaboration between private corporations, government institutions, and other key influencers are required to make truly global impacts. The fact of the matter is that environmental issues are inextricably linked to many global challenges. Take, for example, the fact that climate change is catalyzing income inequality in agriculturally dependent, increasingly drought-plagued developing countries, as mentioned in Byanyima’s article linked above. If our business leaders are pressured into being more conscious of the environmental and societal risks looming over our heads (and the potential global impacts they could have), it just might be the kick they need to start acting.
The Future of the Circular Economy
Increasing global recycling rates will always be a top priority, but creating a system in which we can reuse and remanufacture our existing products and materials is even more critical to securing long-term sustainable development. This is a primary component of the circular economy and Cradle-to-Cradle production, topics widely discussed throughout the conference halls and auditoriums of the Annual Meeting. This was even the first year of the WEF’s Circular Economy Awards, during which TerraCycle received “Highly Commended” recognition. Needless to say, the circular economy is starting to receive the attention it deserves.
In the circular economy, products and packaging are designed with the specific intention of being reused or reprocessed over and over again to eliminate waste generation. A true circular economy closes the production loop entirely, limiting or even eliminating virgin material inputs and waste, while maintaining the quality and integrity of products through countless cycles of use.
Johnson Yeh, Head of the Circular Economy Initiative at the WEF, has made some valid points regarding the future of the circular economy, particularly about the practice of asset tracking. It’s a simple concept: instead of selling an expensive product like a car or an airplane, consumers pay for the service of the product and pay only for the time they actively use it. Manufacturers are then selling a service rather than a product, and because the product will inevitably be reused or remanufactured, there is greater incentive to improve upon product and service quality.
Complex and expensive products like electronics could especially benefit from a system like this, whose micro-components are often made with rare and valuable metals and other materials that make sense to preserve. Many of you already do this to a very limited degree with your cell phone contract – you pay for a two-year contract and receive a free or cheap phone, then decide after two years to re-sign your contract, or move to a different provider. An obvious downside of the current system is that free phone upgrades will render your old phone obsolete, inevitably becoming E-waste. If we could expand this service framework to other products while developing better extended producer responsibility practices, we would be that closer to closing the production loop.
A Scientific Approach to Business
Alice Gast, President of Imperial College London, says it best: “We should embed a scientific mindset into business culture.” This is a perspective that I myself internalized building TerraCycle, and I think the global business environment as a whole will actually require a scientific mindset if we want to solidify our long-term sustainable development.
Think about it: scientists are motivated by the potential improvements to society that could be developed from their research. They look at challenges from every conceivable perspective to identify all possible solutions. They can be self-driven to achieve recognition in their respective fields, which further motivates their research (which can be universally beneficial). They are often dependent on the work of their colleagues, and collaboration is practically a requisite component of the profession.
Imagine the world we would live in if our business environment better reflected these ideals and motivations of the greater scientific community. Business leaders would be more willing to collaborate and would have the poise to tackle problems wrapped in ambiguity. They would approach internal and external challenges with macro-level reasoning and logic. They would look deeper into the long-term impacts of their corporate decisions, and innovations with universal benefit would be more enticing to develop.
With the meteoric rise of Tesla Motors and the rising viability of solar and wind power, it’s no wonder that renewable energy was a popular topic of conversation around the halls of the Annual Meeting. Steven Chu, a Physics and Molecular & Cellular Physiology professor at Stanford, provides a great overview of the current state of renewable energy today, and where the fate of fossil fuel energy lies in the future.
It’s a complicated issue to say the least. For one, renewable energy options are still generally more expensive than conventional fossil fuel options, although associated costs are expected to decline for the next several decades. Some states (“78% of the economies in the US,” according to Chu) have legislation requiring renewable energy make up a portion of the state’s energy usage, but that still only translates to just over ten percent of all energy in the country. Then there is the issue of storing renewable energy, which increases associated costs as renewable becomes more widely used. And until the proper infrastructure to collect and store that energy for the future is developed, we will still be reliant on reserves of fossil fuel energy to act as a backup.
The future still looks bright for many forms of renewable energy, as technological advancements have continued to improve solar and wind technologies and make them more efficient. The variety of renewable energy options also allows countries with differing infrastructures to start developing renewable energy frameworks that work for them.
Battery technology and efficiencies are expected to improve as well – just look at the ambitious Tesla Gigafactory and its goal to eventually produce as many lithium-ion battery cells as are currently being produced across the world.
The Future of “Good” Business
Our business leaders and corporate executives have in their hands the capital and resources we need to push us closer to long-term sustainability on this planet. The most hardened environmentalists and social activists can’t do it alone. We will need the support of multinational corporations who recognize the need to lower their environmental impacts and develop sustainably. We need voices in the political arena and motivated, sustainably-minded legislators. We need the most influential people on the planet to be educated and aware of the catastrophic threats to the environment, because many still don’t seem to get it.
To quote Unilever CEO, Paul Polman: “We need sustainability – this is a planet that needs to be around for generations to come.” I hope we hear quotes like this coming out of the mouths of more corporate leaders from now on, as this is the sort of mindset that will come to define the sustainability efforts of the twenty-first century.