25 March 2014

A Smarter Hotel Stay

For those of us that are conscious of the environmental (and wallet) impacts of wasting resources at home, we're probably doing a great job of following the simple steps which can make a real difference - turning off lights, not running taps longer than necessary, turning the heating thermostat down a degree, etc.  But do we act in the same way when we're on holiday or a business trip, staying in a hotel?  Or do we find our behaviours are slightly more relaxed towards saving the environment?

Hotels today

Hotels today are likely to have various obvious measures in order to help reduce the environmental impact of your hotel stay:
  • Use of room keycards, which cuts the power to the guestroom when unoccupied
  • Encouraging reuse of towels for multi-day stays, saving energy and water
  • Increasing use of energy efficient technologies as part of room refurbishment programmes - LED lighting, flatscreen TVs, water-efficient showerheads, etc.
  • Use of shower gel / shampoo dispensers, rather than individual bottles
  • EV charging points for electric vehicles
Behind the scenes too, hotels are starting to realise that their energy usage is a controllable cost, so are investing in retrofitting building-level efficiencies - energy efficient boilers, better kitchen equipment, integration of renewables, etc.  And of course for a new-build hotel, there's a chance to make even more dramatic changes, adopting new standards.

Hotels are also engaging with their suppliers, and insisting that products and services provided are sustainable - this could be everything from FSC-certified wood for beds, to printer cartridges, through to sustainably sourced seafood in the restaurant.
The three largest hotel brands are already making investments in their sustainability story.  They realise that not only might it be a regulatory requirement, or a way to reduce costs, but also it's great for reputation, and even to drive revenue (e.g. offering carbon calculators for meeting rooms attracts business bookings).

For example, IHG have launched an initiative called GreenEngage, which helps hotel managers identify key interventions, and compares to other hotels in the chain:

Over at the Hilton Group, they have a programme called Lightstay™ which does something similar:

Hilton also have some reduction goals:

  • Reduce energy consumption by 20%
  • Reduce carbon consumption by 20%
  • Reduce waste output by 20%
  • Reduce water consumption by 10% 
[Hilton, please could you also articulate the baseline year in your targets, the scope (e.g. by carbon, is it scope 1 and 2 only), and the expected timeframe?]

I'm most impressed by the innovation Hilton are showing with their waste reduction though.  In some cases, they've neatly integrated their approach into the importance of their role in society, with some local initiatives including:

  • A partnership with the Global Soap Project (GSP), to recover and recycle soap for delivery to vulnerable populations
  • Diverting excess food from conferences to local food banks
  • Working with Good360™ to offer excess items from the property portfolio to community organisations
Beyond this, they are working with DH Hospitality and Serta to downcycle mattresses into tools, car parts, flooring and carpet padding.  They've even realised that with guests throwing-out 30% of newspapers, there's an innovative way to offer access to digital content, with USA Today, instead, reducing waste.

Finally, the Marriot Group are realising the multiple benefits a strong sustainability programme can deliver.

Could hotels do more?

So, we've established that hotels have started making your stay more sustainable, but also that for some guests, whilst on holiday, they might not be doing as much as they could to help out.  Can hotels help their guests even more? Maybe...

Here's the scenario I'd like to explore for a fictitious guest called Larry:

  • The standard room rate is £70 per night.  As a member of the hotel's loyalty scheme, Larry is offered a chance to stay in one of the new 'environmental' rooms, at no additional cost
  • Larry is made aware that his room's energy and water usage will be measured, and as an incentive to minimise usage, he will receive cashback (or hotel loyalty points), if he uses less than the average of all guests for that hotel, pro-rated for the time he stays
  • Larry can view his usage from his smartphone during his stay, over the free Wi-fi
  • At time of checkout, the meters are checked (remotely), and a suitable reward is credited to Larry's account
  • Over time and multiple stays across other hotels in the chain, Larry can view his energy and water savings historically, on the hotel's website
Over time, if the incentives are set correctly, the average usage for energy and water should reduce for all participating guests, causing a virtuous circle of higher targets.

Technically, this would need some form of sub-metering, so each room's usage could be tracked - something which of course has a capital cost, but one which may well be compensated with increased loyalty and enhanced reputation.  It may also be more appropriate in cheaper hotels where guests may be more respondent to incentives, or even a way to tie into corporate rates, such that business guests get recognition from their employee too.

Should we even use hotels?

Finally, there's a very active debate going on at the moment as to whether the traditional hotel business model is being terminally threatened by the peer-to-peer room-sharing websites, most notably AirBnB.  Nobody expects them to takeover the whole hospitality market, but there may well be a tipping-point where it reduces occupancy rates in some hotels to such a level that the hotel chains will see margins eroded more heavily, with rate discounts required.

AirBnB Logo

With threats looming to the hospitality incumbents, they have even greater incentive to reduce their costs, and provide innovative propositions which will lead to brand loyalty.

16 March 2014

Sustainability's unintended consequences

In the insurance industry, there is a concept called 'moral hazard', and this articulates one of the unintended consequences of being insured - an insured person tends to take more risk than if they were uninsured (as the initial [financial] consequence has been externalised to the insurer).

In sustainability, corporations and regulators hope that their initiatives will have an exclusively positive impact, and of course, in most cases, they do. But, lurking beyond every corner, might there be an unintended consequence? Proactively thinking about these isn't easy, but might just help create a better long-term service, experience, or regulation...

Below I've outlined some examples where there might be unintended consequences - some are well-documented, some less so, and hopefully all stimulate some thinking.  Here we go...

Jevons Paradox

Jevons Paradox, or the related 'Rebound Effect' is an elephant in the room for energy efficiency.  Put simply, as things become more efficient, there is generally an increase in consumption. So, from an environmental aspect, unless regulation intervenes, technological advances in energy efficiency may cause a net increase in emissions.  For example, imagine in your home, you upgrade your boiler - it's now burning fuel more efficiently to heat your home. However, as you are aware of this, you might find yourself having the heating on for a little longer, or the thermostat up a degree, as it's "much more efficient than it used to be".

The EU tailpipe emissions legislation has transformed the automotive industry, and coupled with more local regulation like congestion charging in cities, has meant manufacturers are creating ever more efficient cars, and/or new powertrains which have a significantly reduced environmental impact. However, now a tank of petrol/diesel lasts so many more miles, might you find yourself using the car more, or perhaps driving a little less carefully?


In most countries, the electricity grid is powered by a variety of sources of energy, often including a mixture of fossil fuels, some nuclear, and renewables like solar, wind and hydro-electric.  New kids on the block like fracking are also entering the ring as a potentially viable fuel source (its significant water use continuing to be an under-reported consequence).  As the proportion of renewables increases, could we reach a tipping-point where people think they can use energy 'guilt-free', ironically increasing consumption of the remaining fossil-fuel sources?

The lifecycle environmental impact of a product starts from the extraction of raw materials, through its usage phase, to disposal.  Renewables like solar panels and wind turbines of course have a positive usage phase - they generate 'carbon-free' energy.  But, it's more complex than that.  They rely on rare earth metals, and there is energy used in their manufacture.  And as energy storage (via batteries) becomes mainstream, it's important that their lifecycle is also considered.

Collaborative Consumption

Collaborative consumption promotes access of ownership, meaning that for physical goods, they are shared between multiple users, and either owned by a third-party, or perhaps by one of the participants (peer-to-peer).  The environmental benefit superficially is clear - if I share a power tool with my neighbour, that's one less power tool being manufactured, saving on its embodied carbon, transportation and disposal.  The more participants sharing the product, the greater the savings.

However, although trust is a key tenant of collaborative consumption, and works well when setup by/within the community, will everyone treat someone else's belongings as if it were their own?  For example, if you rent a car, might you drive it a little more recklessly than if it was your own?  Might you be a little less careful with someone else's power drill, especially if it was insured?

WEEE and the Circular Economy

The EU WEEE Directive enforces that suppliers have responsibilities for handling electronic waste ('eWaste').  This is, superficially, terrific news, as it supports the circular economy, with its desire to ensure that the materials used in the production of materials are reclaimed and reused at the end of their life.  However, there is another scenario, that without needing to feel guilty that waste electronics are going to landfill, people feel more relaxed about spending money on gadgets and disposing of them.  This will erode some of the sustainability benefits, as people may buy more gadgets, rather than less.  The same challenge may exist for any crude 'take-back' schemes...

3D Printing

3D printing has been latched onto by the world of sustainability, and I'll be honest, I've never really understood why!  Sure, in prototyping and R&D, I can see it being a more efficient way to produce early versions of products, and in a world where people can genuinely produce spare parts for a broken product (without invalidating a warranty), there may be advantages.  However:

  • 3D printing can allow for personalisation of products, something which will no doubt be very popular once 3D printing becomes mainstream.  But having something personalised means there's less likely to be a secondary market for it, so once it's finished with, it might end-up in landfill, rather than a charity shop. [UPDATE June 2014: here's an example of a proposition from Asda]
  • 3D printing is hard to get right - it's not like sticking a piece of paper into a traditional printer. I'd imagine a lot of waste products, from printers which aren't calibrated correctly
  • I expect most things which are made with 3D printers at home are novelty items, with dubious value, and a limited timeframe of interest from the recipient. 

Green marketing

As we scan the shelves and racks of our favourite retailers, you will see more and more items which claim to be 'green' in some way, hoping to attract the conscientious consumer.  Of course, for the 'converted', this is great - it can mean they're able to buy more sustainable products, from washing powder, to waterless jeans.  The reality though, is that there are still those that have a pathological hate for green, and any 'big brother' institution that tries to ram such messages down their throats.  It's important to remember this, and make sure they aren't alienated - the real success of course is making their purchases more sustainable, perhaps without them knowing it!

Be careful what you measure...

Sustainability and CSR concern themselves with a wide range of issues, with a barrage of measures to help navigate this complexity.  Environmental impact might be measured in terms of carbon, waste, water, energy, or biodiversity, whereas the social side may include poverty, unemployment, literacy rates, disease levels, etc.  There's a real risk therefore of unintended consequences, where focusing on just one or two of these measures may have a negative impact on another.  For example, flying roses overseas from Kenya might seem to have a negative environmental impact (flying = bad), but it's more complex, as Fairtrade roses mean a fair wage for local workers who spend this income in their local economy.  Yet, on the other hand, in the Rift Valley, there's a huge concern with irrigation taking away from the fishing economy, and the valuable biodiversity the lakes provide.

So, in summary, sustainability initiatives are critical, and they're already having a huge success in reducing society's impact on the earth.  But it's always worth taking a step back, and just wondering if lurking beyond a corner is an unintended consequence...

03 March 2014

The failure of planning to fail

Benjamin Franklin is attributed with saying "If you fail to plan, you are planning to fail".  And although planning to fail seems counter-intuitive, it is exactly what a large number of today's business models are based on.  It's known as 'Planned Obsolescence', and it's all about designing products to have a limited lifespan.  Think of a tablet/mobile phone with a battery you can't replace, or the latest fashion, which the owner will only want to be seen wearing for a very short period of time.  Eradicating planned obsolescence would be a significant step towards a more environmentally sustainable economy, but is it achievable?

There is a terrific documentary which I watched a year or so ago, whilst staying in Finland to photograph the Northern Lights. It's well worth a watch, but I've also included some of the key historical points below, with my additional thoughts:

A brief history of Planned Obsolescence

As early as the 1920s, manufacturers realised they should be able to sell more products if they design them to fail prematurely.  The most prolific example was a cartel called Phoebus, involving the major lightbulb manufacturers (perhaps slightly embarrassing for Philips and GE who are now sustainability pioneers!).  They collectively agreed to design lightbulbs with a lifetime limited to only 1000 hours, ensuring repeat purchasers from consumers.  A publication called "Printer's Ink" in 1928 articulated the phenomenon as "...any manufacturer of a quality product will tell you that the article which refuses to wear out is a tragedy of business.”

Roll time forward a little and in the US, in the 1930s, the depression had hit, and there was a desperate need to stimulate the economy, and reduce unemployment. Bernard London proposed making planned obsolescence a legal requirement in the US.  This proposal wasn't taken forward.

In the 1950s, as the economy in the US boomed, there were additional pressures to introduce planned obsolescence, and consumerism was born.  Brooks Stevens popularised the term 'planned obsolescence', as "instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary". Coupled with cheap credit and clever marketing, it became highly desirable to have the latest products, even if they weren't needed.  The transition from a 'Make do and mend' to a 'throwaway society' had been born.

Today of course, whole segments of the economy rely on selling cheap products to consumers, or marketing the latest disposable fashions.  If they are not explicitly designing products to fail, they are psychologically nudging consumers to want a newer version.  In a world with finite resources, this simply isn't sustainable anymore.

Clothing: from Style Obsolescence to secondary durable markets

Sustainability professionals aren't about to stop fashion seasons ('fast fashion'), but if the products are designed to be durable, there are plenty of options in secondary markets, or extending their lifetime:

Either clothing manufacturers directly, or perhaps retailers if they can survive, will need to develop business models which derive additional revenues from durable clothing.  This might include:

  • Providing a wardrobe service, renting-out clothing for key events (an extension to the wedding suit hire services)
  • Charge a small fee for a repair and cleaning service, perhaps partnering with local dry-cleaners to provide this
  • Take-back 'previously loved' clothing, to resell (perhaps sharing proceeds with the owner and a charity)
  • Nudge marketing away from the short-term fashion of a garment, to its longevity

Electronics/electricals: from Technical Obsolescence to repairs and upgrades

New models of products can bring huge innovations to consumers, e.g. new features, and improved performance.  But that doesn't always mean that the old product needs to be thrown-away.  Why not:

  • Embrace the growing movement for people to repair products themselves, with the help of the likes of iFixit?
  • Continue to develop new functions via software, rather than hardware, e.g. App Stores via a smart phone
  • Design products to support physical upgrades, e.g. Phonebloks
  • Embrace new business models where products are not sold, but rented-out by the manufacturer, deriving revenues from regular monthly payments, but including service within the price

Where do we go from here?

As the costs of raw materials either creep upwards or have volatile movements, manufacturers will start to explore some alternative business models, using the momentum of the 'Circular Economy' movement to develop collaborations; and in competitive sectors, some will succeed by differentiating themselves with an explicitly sustainable message.  But with entrenched interests in the incumbent business models and its associated marketing messages, it may be that regulation will have to play a role in order to create the required step-change.