What goes around comes around

Environmental regulations and growing awareness among customers of green issues have presented not only fresh challenges, but also new opportunities for companies ready to seize them, writes Simon Brooke

Regulations, such as the EU’s WEEE directive on electrical equipment, mean that what is termed “closed loop” or “take back” is now moving beyond parts of the electronics sector and a few niche green products into the manufacturing mainstream.

Here, in order to reduce waste and carbon emissions, manufacturers are taking responsibility for the whole lifecycle of a product.

For example, Interface, a manufacturer of carpet tiles operates a take-back scheme for its products called ReEntry. Wherever possible, Interface collects these products from customers at end-of-life and either reuses them or recycles them using new technology that can separate each component of the carpet tile to achieve like-for-like recycling.

Banner Business Services had been providing secure document destruction for Revenue & Customs (HMRC) when both organisations decided to extend the process. “The vision was that could we take the recovered paper and manufacture it into a 100-per-cent recycled paper that could be used by HMRC end users and further close the recycling loop,” says Richard Costin, Banner Business Services managing director.

Suppliers are leasing expensive materials to building operators, ready to take them back when the components are no longer needed

In January 2010, the first production of closed-loop 100-per-cent recycled copier paper was fully audited by an independent third party organisation. The closed-loop solution is now being used by all central government departments, as well as private-sector businesses, including Virgin Media and McDonald’s.

“Until now, companies have been dealing primarily with carbon emissions under their own control, referred to as Sustainability 1.0,” says Dr Jean-Yves Cherruault, head of environmental accounting at Sustain, a carbon reduction consultancy, which has worked with Tesco on the lifecycle of its clothing.

“Now we’re seeing organisations moving to address the emissions that are outside their direct control, in other words within the supply chain, as a way of managing risk, referred to as Sustainability 2.0,” he says. “The latest trends are the extension of issues from energy and carbon to water, waste and closed-loop recycling. As part of Sustainability 2.0, we’re seeing sustainability matters more and more integrated into core business processes.”

One of the most significant changes is occurring in construction and building maintenance, says Dr David Telford, of sustainable engineering consultancy hurleypalmerflatt. The concept of “producer responsibility” is becoming part of the construction and building maintenance business model.

The sector is now taking a deeper, more integrated approach to constructing, running and refurbishing buildings. “Now that property prices are not constantly rising, as they once were, builders have to think about how to design buildings so that they maintain their value in the long term,” he says. This means ensuring that new buildings are flexible and adaptable for future requirements.

New buildings are, therefore, not only cheaper to run, but also their design allows the expensive and non-renewable raw materials they contain, such as copper, lead and zinc, to be easily removed and recycled on demolition or refurbishment. “This is particularly important with data centres, for instance, where new technology means that services can be out of date after just seven years or so,” says Dr Telford.

Moving forward, instead of selling these expensive materials as part of the building, the suppliers are leasing them to building operators, ready to take them back when the components are no longer needed.

“It works in the same way that companies already lease desks and carpets,” he says, “and it helps operators handle outgoings because leasing involves smaller, regular payments, reducing the capital required, while suppliers retain ownership of the raw materials necessary for their products.

In a similar way to this lifecycle product management business model, companies are now reaching back along the manufacturing and supply chain to make the products they use and sell more sustainable. Last year, for instance, the John Lewis Foundation, which provides support for communities where its suppliers operate, set up an education project to improve the livelihoods of cotton farmers in Morbi, in Gujarat, western India.

The three-year programme, carried out in conjunction with sustainable cotton company Cotton Connect, will also teach 1,500 cotton farmers and their families about more sustainable methods of farming cotton. (It can take more than 20,000 litres of water to produce 1kg of cotton, equivalent to a single T-shirt, according to WWF). In this project, around 6,000 metric tonnes of cotton fibre will be produced for use in John Lewis’s tufted bath mat range.

As well as suppliers, companies need to rethink their business strategies fundamentally and to bring customers into the process, rather than regarding “green” as a marketing add-on, says Mark Varney, director of sustainable business at Corporate Culture, a sustainable behaviour change agency whose clients include Unilever, Pfizer, Astra Zeneca and Anglian Water.

“The problem with a lot of green advertising is that it’s either promoting a company’s green credentials or trying to sell products, rather than focusing on behaviour change,” he says.

Mr Varney points to Marks & Spencer’s Shwop initiative whereby customers are encouraged to drop off old clothes in the store for recycling, even if they were not originally from M&S. “Encouraging customers to recycle instead of buy-buy-buy is a wonderful example of a new, embracing approach that doesn’t directly drive market share, but rather encourages sustainable growth in the long term,” he says.

He also cites clothing company Patagonia, which is now actively encouraging consumers to buy fewer of its new clothes. The premise being that its output is of such good quality that you need much less of it. “Patagonia intends to influence its consumer behaviour to help lower the environmental strain from ever growing consumption levels and throw-away culture,” says Mr Varney.