Will climate change help clothing retailers hit a circular target?

One of the main challenges to the sustainability of our environment is consumerism. Fuelled by cheap credit, a key sector which relies and exploits this phenomenon is clothing retail.  This blog will argue that although some clothing retailers are proactively tackling some key sustainability issues, there is an elephant in the room - retailers want you to buy more of their clothes.  This, I'm afraid, is a nut which needs to be cracked before retailers can proudly talk about taking a leadership position on sustainability. And if they get this right, mindsets of consumers can change, and we might see a change in behaviours impacting other sectors too.  Re-writing a business model isn't easy (ok, as an incumbent, it's almost impossible), but in this case, climate change may be a useful nudge.

Sustainability for clothing retailers today

In a very simple model, we can look at clothing retailers as sitting between their upstream supply chain (making the clothes), and the consumers downstream (who buy lots of clothes):

A simplified 'value chain' for clothing retail

I've applied a simple 'RAG status' against each area to grossly generalise where the sector is progressing well, and where there's much more to do:

GREEN - Clothing Retail (own operations)

Leading clothing retailers have realised that resource efficiency is a good thing - for meeting regulation, reducing operational costs, and enhancing reputation.  This is fine, but is expected behaviour now, so meeting targets like the following are expected (by me!):

• Ongoing reductions in (scope 1 and 2) carbon footprint - e.g. emissions associated with running stores and fleets of owned transport; new (ok, not that new) technologies like LED lighting and store refit programmes should deliver ongoing savings - and there's a business case in cost savings there for the taking
• Zero waste to landfill.  Helped with proactive reuse and recycling, and as a last resort, waste-to-energy conversion
• Low-carbon stores - either as new build, or significant retrofit, but acknowledged to be challenging for some older estates
• On-site/near-site energy generation - PV, etc.
• Minimising net water use (use of water harvesting from roofs, etc.)

 AMBER - Supply Chain / manufacturing

The conditions of supply chains is frequently under the spotlight, and rightly so. NGOs have been incredibly effective in highlighting problems in developing countries to western consumers, and things are improving - take the 'Accord on Fire and Building Safety in Bangladesh' following the Rana Plaza disaster as a good example.  I don't think any retailer is complacent about this area, and acknowledges robust auditing through multiple layers of organisations is not watertight.  Typical targets include:

• workers' rights (hours, conditions, pay, etc.)
• pollution control in factories
• increased use of fair-trade /sustainably-sourced materials
• zero tolerance on child labour

If you're interested in this area, check out Honestby, who have taken supply chain transparency to a refreshing new level!

RED - Consumer

Some retailers are engaging with their consumers around sustainability, and helping shift behaviours, e.g. providing collection points for unwanted clothes.  But, for the vast majority of retailers, they're pretty keen on you buying as much as you can, each time you shop. The reality is that the business-as-usual metrics (or KPIs) retailers run their stores businesses on include:

• Sales per square foot of selling space
• Footfall (number of people going into stores)
• Average Basket size (number of items / value of items in typical transaction)

So, simply put, they want to maximise the value of every square foot of retailer space, by getting as many people through the door, and nudging them into buying as much as possible.  Doesn't sound too environmentally sustainable does it?  

Hang on a minute though, a clothing retailer might argue that they do take sustainability seriously (see green and amber areas above).  "...And sure, we like to sell lots of clothes, but then customers love buying and wearing our clothes, shareholders are happy, bonuses are paid out, we're proud of our Christmas ads, and we're better than the competition." Happy days... or is it?

Where does climate change fit into this?

Traditionally, clothing retail (in the UK) has relied on a couple of concepts around our seasons:

• Predictable seasonality
• That each repeat season, fashion trends will mean consumers want to replace items with the latest version (even if they don't necessarily need to)

Whether you believe there's a link between climate change and extreme weather, or whether climate change is caused by human action, there's no doubt that weather patterns are becoming more volatile, triggering various impacts for clothing retail:

• It is much more difficult to plan merchandising, e.g. should the Autumn/Winter range go into stores in September, October, November December, etc.?  And when should discounting start, when stock can't be shifted, e.g. what if there's a 'cold snap' in April after a mild March?
• Virgin cotton price volatility, as extreme weather impacts crop yields
• Global supply chains exposed when extreme weather impacts key logistics routes
• National deliveries to stores (or to homes) exposed to UK's weather, e.g. flooding
• Consumer appetite to visit the traditional High Street in poor weather (offset partly by online, of course)

This may or may not be a boardroom issue (I expect, as it's a gradual shift over many years, it may not be yet, but I expect we'll see more and more press releases like this one), but forward-thinking retailers might consider how the circular economy can help them adapt. Could we see a world where clothing retailers combine climate change mitigation and adaptation sustainability strategies?

The Circular Economy for clothing retailers

Lots has been written about the Circular Economy (I even had a go back in 2012 before the name was introduced), and I'm a huge fan of the concept.  For clothing it's so much more than recycling bins in stores though (albeit this helps highlight the huge problem of clothing going to landfill and nudge customer behaviour in the right direction).  It ideally needs to tackle business models and service design from the ground-up.  For clothing retailers, this is a real challenge of course, as it means moving away from selling as much new clothing as possible, to a model where revenue streams come from other routes.  But there are some notable examples which are demonstrating some real innovation:

• Mud Jeans have a groundbreaking business model, where their jeans are rented not bought
• Patagonia's eBay partnership  encourages buying their previously used garments
• Rentez-vous and their peer-to-peer fashion lending concept

There is also an increasing number of upcycling initiatives, which help provide a second life for what might otherwise be a waste stream going to landfill:

• Timberland are partnering with a tyre manufacturer
• Nike upcycling plastic bottles into football jerseys (video)

Note, there's a bit of a blur between whether these are clothing manufacturers who retail, or retailers who manufacture.  But it's quite insightful when thinking of corporate strategies that having control of manufacturing operations is a key enabler.

The way forward for clothing retail

So, we've identified that clothing retailers are doing some great work reducing the environmental impact of their own operations (and reducing costs), and that most are tackling the social and environmental challenges in their supply chains.  But we've also acknowledged that whilst the existing 'sell lots of new clothes' business model still pervades, a societal shift away from consumerism won't work.

We've also seen that climate change may introduce the need for adaptation as well as mitigation, so this introduces another nudge to think differently.

So, rather than the traditional retail metrics, and the set of sustainability metrics to minimise impacts on own operations, I'd like to see retailers challenge themselves with a new set of targets.  Here are some ideas to stimulate some thinking:

• 25% of clothing sales are for 'previously loved' clothes (with a % of proceeds to charity)
• 5% of floorspace is for clothing repairs/alterations/cleaning
• 50% of stock items (SKUs) are sold for at least three seasons/years
• 30% of stock items (SKUs) are manufactured from reclaimed yarn (or maybe a larger proportion of stock items are manufactured with a high proportion of reclaimed yarn)
• All new clothes are durably designed, so that they can come with a 12 month no quibble guarantee (could a stitched-in 'manufactured on mm/yyyy' label become a badge of honour?)
• You can rent infrequently used items, maybe a suit and tie, or a handbag, perhaps even hosting peer-to-peer sharing like rentez-vous
• Stores become a hub for the community - floorspace is offered for library, adult education, local clubs...

The business model needs to explore:

• Revenue diversification and driving brand loyalty through services (not new products)
• Increased vertical integration upstream with clothing manufacturing

Within the next two years, it would be great to see some/all of these concepts at least trialled in existing stores - there's a reputational prize for such an investment, even if the financial rewards aren't immediate.

A sign outside a store in Boston, US

Food packaging - time to reuse more?

Where I live, in England, our council provides a pretty comprehensive recycling service - food waste is taken weekly, and mixed recycling (glass, paper, plastics, etc.) every other week.  When I look at what I do have to put in the 'evil black bin', destined for landfill, the vast majority of this seems to be food packaging.  It's not a lot in volume terms at all, which is testament to my well-drilled household and the council facilities... but it's not zero.  Are there additional steps which either myself, my food retailer, or the food/packaging manufacturer/producer can do, to help me get closer to improve my 'food packaging footprint'?

Waste Hierarchy

The 'waste hierarchy' is not perfect (more on that in another post soon!), but serves a useful purpose for this blog:

Waste Hierarchy

It suggests that ideally, we'd prevent the use of packaging where possible, then minimise its use, then reuse, recycle, and eventually, if it can't be burned for energy, send to landfill.  

WRAP continue to provide the industry with a series of voluntary agreements which support a range of initiatives aligned to the waste hierarchy's philosophy, via the Courtauld Commitment.

The importance of packaging

Food packaging serves a number of purposes:

• protecting the food from physical damage (e.g. an egg box) 
• preventing contamination (e.g. vacuum-sealed meat packaging)
• storage (e.g. a yoghurt pot)
• convenience (e.g. bag of rice)

Without such packaging, we would see a significant increase in food waste throughout the supply chain, probably a larger sustainability problem than dealing with the end-packaging.  The classic example of this is the shrink-wrapped cucumber.

There are already responsibilities placed on the food packaging producers to minimise packaging where possible, and progress is being made.  Personally, I'm still not convinced about Easter Eggs, with Sainsbury's trialling dedicated recycling facilities earlier this year.

Recycling packaging

I mentioned earlier that my council will happily take mixed recycling (it saves them - and therefore indirectly my council tax bill - on paying landfill tax), which means a lot of food packaging is recyclable:

• Plastic milk bottles
• Cans (baked beans, etc.)
• Card (egg boxes, frozen fish boxes, cereal, etc.)
• Tetra-pak cartons, e.g. fruit juices [not all councils support this yet]

Retailers are helping us, the consumer, understand more about what is recyclable, with much improved labeling, e.g. here's the range of labels which M&S use, based on WRAP's work.


Reusing packaging - the untapped opportunity?

Between prevention/minimisation of food packaging, and recycling is reuse... and this is where I wonder if more could be done?  So, before it enters the recycling loop, the packaging is reused as many times as practically, and cost effectively, as possible.

The British consumer is starting to get used to using less single-use carrier bags, with various initiatives taking-place, either:

• from the Regional Governments:
• in Wales, the 5p charge has seen usage reduce by 96%
• a 5p charge in Northern Ireland
• the recent announcement to introduce a 5p charge in Scotland
• The Queen's Speech on June 4th set to outline legislation to introduce a compulsory 5p charge for single-use carrier bags in England, from October 2015 - UPDATE 05/10 - now effective.
• from retailers:
• e.g. M&S charges 5p
• Sainsbury's offers Nectar points for re-use, and Tesco offer Green Clubcard points
• Selling 'bags for life', (some with free replacements)

This means more and more households are prepared to go shopping, taking a few bags with them...  But could we see a future, where consumers see some of their food packaging as being equally reusable?  There are three models to consider:

a.) Packaging for immediate refill at shop

In this model, rather than taking just their empty canvas bags to the shops, the consumer also takes some selective packaging, which they're happy to use as a receptacle for refilling at an in-store dispenser.  This could be the same packaging for the product, or another container.  It's a very similar concept to a trial which Asda ran for their fabric conditioner, in collaboration with WRAP.

b.) Packaging for return (then later reuse) at shop

This is where packaging is taken to a shop for re-use at a later date, by another consumer.  The packaging would need to be sterilised and checked, either on-site, or at a central location, much like there used to be a monetary rebate for bringing back glass bottles.

c.) Packaging for return as part of home delivery

Much like option 'b' above, as one's shopping is delivered at home, the van-driver is able to collect packaging, for cleaning and reuse, not for recycling.

Heinz Fridge Pack

Reusable Cereal Container (Source: Lakeland)

Egg Box (Sainsbury's)

Of course there are lots of practical considerations, e.g. contamination liabilities, spillage at 'disposal stations', needing to print updated 'use by' dates, and ensuring it's cost effective compared to simple recycling.  It's a classic piece of Service Design, but I expect the challenges are easier to overcome than the perceived barriers of self checkouts, which are now commonplace.  With the right incentives in-place (discounts, rebates, Nectar points, etc.), might this work?  

Finally, where a supervisor is required at a food dispensing station, would this provide an excuse for a conversation - great for some parts of society who are lonely and crave the social interaction, plus a good excuse to reinforce the brand?

Water, Water, Everywhere...?

After the torrential rain and subsequent floods which hit the UK a few months ago, it can be hard to dismiss that over the long-term, the South of the UK is one of the most water-stressed parts of Europe.  That basically means that we're using too much water (in our homes, business and in agriculture), than our normal freshwater supplies will allow.

Water is an incredibly cheap resource (relative to the benefits we derive from it), so it can be easy to dismiss its importance.  However, with climate change likely to cause an increase in extreme weather events, droughts may be become more common.  If we act now and start to change our behaviours, collectively, we can minimise the inconvenience of any problems in the future.

Use of hot water

Although water is relatively cheap, energy certainly isn't.  Surprisingly, many people haven't understood the link between their use of hot water, and their energy bills.  In fact, it is estimated that 17% of your energy bill may go towards heating water.  So for an average dual-fuel energy bill of £1264, £215 is for heating water.  So, having slightly shorter showers (and minimising baths), can make a real difference to your energy bills.

Water (and energy!) saving shower head

Free water-savings gadgets

Your local water company wants to help you save water (in fact they've had a duty to promote the efficient use of water for all their customers since February 1996), so most offer free water-saving gadgets.  Just click the relevant link below for your water company and select the freebies which are most relevant to your needs.

Sustainable Mobility

I always have mixed views when I see the latest statistics from the UK's Society of Motor Manufactures and Traders (SMMT), as I enjoy cars, but also care passionately about sustainability.  Is selling lots of new cars a good thing for the planet? And it's got me thinking about where the industry might be heading for the 'green motorist'.  What might motoring be like in the coming 10-20 years?

March 2014

By the end of Q1 2014, year-to-date registrations were up 13.7% to 688,122 units.  Superficially, this might look bad for sustainability, as more new cars are on the road, with purchases perhaps fueled by extra cash in the pockets from PPI payouts.  Of course, a large proportion of these cars are either bought as fleets, or using one of the range of car finance options available by dealers (nudging towards a different ownership model?).

The great news within these statistics is the ongoing path towards more efficient cars.  In fact, March 2014 was the biggest-ever month for alternatively-fueled vehicles as volumes reach 8,713 units, a growth of 63.8% on 2013.

CO2 emissions for new cars are 26% lower than a decade ago...

...and 67.2% of the market was below 130g/km, so paid no VED in the first year, compared with only 6.5% of registrations in March 2004.

So some really positive news about the improvement made over the last decade and being seen on the forecourts of Britain.  

So that's today.  What about tomorrow? Below I've outlined my thoughts about what might happen in the medium-term...

2015-2020

Tailpipe emission reductions will continue at-pace, driven by the EU regulation, and with the really encouraging sign that buyers are more and more conscious of the running costs of their vehicles (and therefore these criteria will be marketed more, creating a virtuous circle).  Manufacturers will continue to roll-out technologies across their fleet to drive down emissions, for example:

• Alternative and hybrid powertrains
• Turbocharging with smaller engines
• Variable valve technology and 'cylinder on demand'
• Auto start/stop
• Regenerative braking
• Improved aerodynamics
• Lightweighting of materials

Here's Audi's rundown of the technologies they are including within their range now (click to see larger):

Audi's sustainability innovations

Private car ownership will continue to dwindle, with the growth of car clubs and car sharing continuing, in both cities, and on high-density commuting routes.

The near ubiquity of sat-nav should reduce congestion.

And of course manufacturers will continue to introduce new innovations, which will find their way into high-end models.  A great example of this is Audi's integration with city-wide traffic lights management systems, helping the driver time their approach to traffic lights for when they are green:

Audi: traffic light integration

In the world of regulation, we'll be seeing more city-level initiatives to suppress emissions.  Paris has recently had to introduce alternate day travelling, and with London having recently faced very high pollution levels, it's only a matter of time when more is required there, albeit taxis being zero-emission capable from 2018 will help.

With the volatility and security of supply of many materials coming under the spotlight, there will be an even greater focus on the use of renewable materials, and ensuring that vehicles can be easily dismantled, with parts clearly identified at the end of their life for recycling (in fact, by 2015, in the EU, 85% of a car must be recyclable, and a further 10% suitable for energy recovery).

Finally, behind the scenes to the average driver, manufacturers will face greater pressure to be more environmentally aware in their facilities.  Carbon, waste and water usage will all be reduced.

2020s


From 2020, there may be a decade of opportunity where people will be able to enjoy independent motoring, without being as worried about the environmental impact.  Powertrain developments will have meant that it's much cheaper and cleaner to run a car (time will tell which combination of ultra-efficient diesel/petrol, fuel cell, electric, etc. will be optimal).

Private ownership of cars will have dwindled even further, with 'mobility solutions' meaning individuals can 'subscribe' to a service allowing them to choose suitable vehicles for different purposes, like Peugeot already run with their Mu Service and BMW is developing.

BMW i

2030+

From 2030 onwards, the age of the independent motorist will have almost disappeared.  Cars will be part of a mesh of inter-connected modules, driven automatically, without driver input required.  Sounds like science fiction, e.g. Minority Report, which showcased the Lexus 2054 concept?  Well, look at what Volvo have already been trialing, and inevitably, Google have been working on this too. [UPDATE MAY 2014: In fact, Google have announced they will develop their own driverless cars - perhaps 2030+ is too pessimistic!]

Volvo: Autonomous driving in traffic queues

A prototype of a Google driverless car

Maybe, each 'train' of vehicles will optimise the use of the available powertrains within each module, to drastically reduce overall consumption, perhaps with wireless charging from under the road?  And of course, road accidents will be reduced, making journeys quicker and safer.

Wireless charging a Rolls Royce

So, a fascinating and optimistic transition as we move from independent motoring to sustainable mobility in the coming years...

James Lovelock - "A Rough Guide to the Future"

This evening, I was lucky enough to watch James Lovelock be interviewed at Conway Hall, by John Gray.  He was launching his new book, "A Rough Ride to the Future ", which I'll read when I get a chance, and add my thoughts to this blog entry.

James is over Ninety years young now, but the audience could hardly tell, as he sat in a particularly challenging chair, and brought to life some of the key themes of his book so passionately.

James Lovelock being interviewed by John Gray

Of course, the audience were aware that James is well-recognised as being a leading thinker in Earth being a self-regulating system, with the 'Gaia Theory'. And he didn't disagree when it was suggested that some of the latest thinking around climate change, and the need to balance mitigation with adaptation, were ideas he's been a forefather of.  Here's a very quick skip through some of the other ideas which caught my attention as I listened - hopefully I haven't misrepresented him...

Anthropocene

The anthropocene is an era of time (which we're in currently), when "mankind began to exert a noticeable effect on the living environment (a definition which has been extended to include "changes to the Earth's atmosphere and surface sufficiently great to be discernible by observers viewing the Earth from space".  James suggests that us Brits started it all off, when Thomas Newcomen invented the steam engine back in 1712.

Concurrently to the anthropocene, James also recognises an accelerated evolution, leaving Darwinian timescales, and piggy-backing off things like Moore's Law - the doubling of computing power roughly every two years. Humankind can turn the sun's energy into information and rather than be alarmist about how this could lead to robots taking over from humans, he suggests that much like his own pacemaker, computing will supplement humans, either in an isolated fashion, or perhaps as a shared consciousness (I think Twitter is already doing this).

Cities

James looked to nature and saw inspiration in "...social insects like ants, bees and wasps."  He went on to reference the perfectly controlled micro-climate of a termite mound in Australia. Relating that to human-scale, he then considered Singapore, a city which is highly successful, surrounded by fertile land, yet averages 12 degrees higher than the Earth's average.  He ponders whether human's sustainable future will be found in gravitating towards cities.

Geoengineering

Although geo-engineering has its detractors, and certainly it's important to understand the longer-term unintended consequences of actions, James was supportive of certain measures needing to be utilised as the climate worsens. In particular, he supported giant aerosols spraying fine seawater mist from cargo ships, to help clouds form, wherever they were required.  However, the political barriers may be harder to overcome than the engineering ones, as humans are fundamentally a tribal species with allegiances to our own nations.

Nuclear

Controversially perhaps, James is a supporter of Nuclear power and thought that it was "... given to society as an incredible gift..".  The challenge was that it was misused initially, and thinks that society still feels guilty about it.  When questioned about radioactive waste by an audience member, he suggested we should look across the English Channel, where the French burn their waste.

Oceans

James acknowledged that climate scientists had "got it wrong", assuming that the linear relationship between atmospheric carbon and temperature still held in the anthropocene. He argues that climate science is more complex due to the pollutants in the atmosphere which reflect the sun's rays (e.g. aerosols), and also the incredible importance of our oceans - an area of almost 2/3 the Earth's surface, but hardly understood at all.

Science vs. Inventors

As well as being an eminent scientist, with over 200 scientific papers published, he sees himself as 50% an inventor.  And that we shouldn't underestimate the potential breakthroughs that inventions may bring, perhaps even without understanding the science.  Just think of Faraday...

In wrapping-up with audience questions, when asked what James considered 'progress' to be, he suggested that, given the sun has a worse case of global warming than Earth, it is simply "...measured by success in an ever worsening environment."

Hearing an optimist speak about such serious issues is refreshing - climate science can often seem like a doomsday scenario, so fans of human ingenuity like James should be given a louder voice.  And it certainly helps put in perspective the day-to-day challenges of corporate and political sustainability and helps reflect on the (even) bigger picture.

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.

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.

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?

Renewables

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...

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:

• Charity shops
• M&S's Schwopping initiative
• peer-to-peer wardrobe sharing like Rentez-vous
• Patagonia's proactive support for repairing clothing
• Leasing clothes, like at Mud Jeans

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.