GREEN ADVANTAGE CONSULTANTS

 

“Nature is a totally efficient, self-regenerating system.  If we discover the laws that govern the system and live synergistically within them, sustainability will follow and humankind will be a success.” – R. Buckminster Fuller

 

THE BIG PICTURE...

where we talk about the scientific reason for pursuing sustainability

To many, sustainability is an abstract concept. The global systems in which we operate are complex. The sheer scale of the issue at hand and the volume of information we’re all bombarded with makes it difficult to understand why, for example, the agricultural policy of one nation impacts the soil quality of a village thousands of miles away.

Yet on a basic level, sustainability is a simple concept: we live in a finite system and using resources without replenishing them, degrades and diminishes that system – a trend which ultimately leads to system collapse.

In the end, it is about our kids and grandkids, and the kind of world that we are going to leave to the ones we love.

What is our definition of sustainability?

Sustainability is that point is where resources are neither decreasing or increasing (yet), and demand is neither increasing nor decreasing (yet).  It is the zero point – net-zero water, net-zero energy, net-zero material flows, zero toxics, etc.  It is the circular economy.  Beyond it is a flourishing society and a safe and just space for humanity.

Green Advantage Consultants exists to help businesses and communities move to sustainability and beyond.

On December 7, 1972, the crew of Apollo 17 captured the above view of the circular Earth, reinforcing in humanity’s psyche the circularity of our cosmic home.  “The Blue Marble” was taken at a distance of about 29,000 kilometers (18,000 miles) from the surface. It is one of the most reproduced images in history.  It shows the earth as a round world (or, more accurately, a sphere, or to be even more precise, an oblate spheroid that is flattened at the poles and bulges in the middle).  Although it was known for a long time that the earth was round, this is one of the first times we got a glimpse of what the earth really looked like.

The geometric circularity of the planet reflects the cyclical nature of the natural systems that exist within it.  According to some sources, both root words – circle (circularity) and cycle (cyclical) – share a common derivation.  The Greek noun “kyklos” means circle.  Its transliteration into Latin is cyclus, which evolved into our English word “cycle.”

Nature, with her 3.8 billion years of innovative research and development has gotten pretty smart, and she found that best ways of doing things was in cycles – circles – the carbon cycle, nitrogen cycle, phosphorus cycle, hydrological cycle, and so on – to keep materials and energy flowing through the biosphere and available for use by the members of the biosphere (which, by the way, includes us).  This should give us a good idea that circular/cyclical flows are the way to go in our society and economy,  as they are in the environment.   Even the hexagon, one of the most common shapes of nature, is the closest thing to a circle that allows for zero wasted space in a structure, such as a bee’s honeycomb or the eyes of a dragonfly.

“When we look at what is truly sustainable, the only real model that has worked over long periods of time is the natural world.”

Janine Benyus / Co-founder, The Biomimicry Institute

The basic laws that govern nature, and by extension, our environmental-social-economic system are the laws of thermodynamics, and this is where we must start to gain an understanding of what needs to be done and what changes need to be made in order to place us on a course through the funnel of sustainability, and out the other side to a regenerating, flourishing planet.  These laws set limiting conditions for life. The first law says that energy is conserved; nothing disappears, its form simply changes (e.g. heat, movement). Another way of stating this is: “Energy cannot be created, or destroyed, only modified in form.” The implications of the second law are that matter and energy tend to disperse over time. For matter, this is referred to as “entropy.” Putting the different laws together and applying them to our system, the following conclusions can be reached:

  • All the matter that will ever exist on earth is here now (give or take a little bit).
  • Disorder increases in all closed systems and the Earth is a closed system with respect to matter. However, it is an open system with respect to energy since it receives energy from the sun.
  • The flow of energy from the sun creates structure and order from the disorder.

The Natural Step (TNS) developed four system conditions that lay out the principles for a sustainable society.  Behind the framework there is a science-based understanding of the complex adaptive system that is our world, and is based on study of ecosystems, laws of nature (including thermodynamics, conservation laws, laws of gravity, biogeochemical cycles, photosynthesis, systems thinking, flows of resources and wastes), social systems, social institutions (including trust and fundamental human needs), and psychology.  The system conditions, or principles of sustainability, are as follows:

In a sustainable society, nature is not subject to systematically increasing…

  • …concentrations of substances extracted from the Earth’s crust,
  • …concentrations of substances produced by society,
  • …degradation by physical means

And, in that society…

  • …people are not subject to structural obstacles to health, influence, competence, impartiality, and meaning-making.

So now that we have established the system conditions, or principles, for sustainability, how does it fit into our human system?  There are two primary ways of representing the relationships between the environment, society, and the economy.  The first, and more common, is the “Triple Bottom Line.”  However, the Triple Bottom Line is an illusory concept, often shown as a Venn diagram.  It depicts the areas of economy, environment, and society as separate realms with some overlap, wherein lies sustainability (sometimes referred to as “weak sustainability”).  However, the inverse of this that there are areas of each that do not intersect and act independently of the others.  Nothing could be further from the truth.

The second, and more accurate and realistic, depiction is a whole-systems view called “strong sustainability.”  It is shown as nested circles, where the economy is shown as a subsystem of society, and society is wholly contained within the environment.

 

We can see the truth of this when we examine the different forms of capital that are available to the economy and necessary for a successful business model: financial, manufactured, intellectual, human, social and relational, and natural.  Of these, four flow from outside the economic sphere.  Intellectual, human, and social and relational capital all arise from society.  Natural capital, of course, can only be derived from the environment.  Manufactured capital partly arises from society in the form of infrastructure provided to the economy (e.g., such as transportation networks, energy grids, water systems, Internet networks), and other systems.  The other two, financial and (part of) manufactured capital, are only made possible by the other types of capital.

Recently, a new paradigm of economics has been developed by a British economist, Dr. Kate Raworth, and is termed “Doughnut Economics.”  Despite the name, this system is primarily based on ecological and social limitations and the use of the economy as a tool to create “a safe and just space for humanity” between an ecological ceiling, beyond which we risk significant harm to ourselves from planetary overshoot of limits, and a social foundation below which nobody should be allowed to fall lest they risk their health, court income poverty, etc.  The environmental ceiling consists of nine planetary boundaries, beyond which lie unacceptable environmental degradation and potential tipping points in Earth systems.  The nine planetary boundaries are climate change, ocean acidification, chemical pollution, nitrogen and phosphorus loading, freshwater withdrawals, land conversion, biodiversity loss, air pollution, and ozone layer depletion (four of which are currently calculated to be in overshoot status).  The social foundation consists of the twelve top social priorities below which lie unacceptable human deprivation such as hunger, ill-health, and income poverty.

So where are we today?  The existing reality is also known as business-as-usual and the linear economy.  It is comprised of three simple elements: take – make- waste.  As a society, we take stuff from the Earth, we make different stuff out of it, and then we stuff it back into the biosphere, hoping that we never have to see it again. We extract metals, minerals, and other resources from the Earth, and transform them into products, most of which get discarded within six months of usage.

Unfortunately, as the linear economy continues to be business-as-usual, where business converts natural capital into money as fast as possible, life-supporting resources are decreasing, and the demand for these resources is increasing.  This problem is illustrated by the funnel concept created by The Natural Step, which defines sustainable development as a strategic mission to eliminate society’s unsustainable systemic errors and avoid crashing into the wall of the funnel.  The walls of the funnel represent the decreasing resources and increasing demand, and sustainability is found at the neck of the funnel, with revitalization and regeneration on the other side.   We need to somehow navigate our way through the funnel and out the other side.

According to the Ellen MacArthur Foundation, we face sharp volatility increases across the global economy and proliferating signs of resource depletion (as shown in the funnel framework), and the call for a new economic model is getting louder.  While companies have done fairly well at improving resource efficiency and exploring new forms of energy, less thought has been given to systematically designing out material leakage and disposal and designing in circular concepts.  Again, according to the MacArthur Foundation,

 

“A circular economy is an industrial system that is restorative or regenerative by intention and design. It replaces the ‘end-of-life’ concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse, and aims for the elimination of waste through the superior design of materials, products, systems, and, within this, business models.”

– Ellen MacArthur Foundation

 

Such an economy is based on a few simple principles. First, at its core, a circular economy aims to ‘design out’ waste. Waste does not exist—products are designed and optimized for a cycle of disassembly and reuse. The tight component and product cycles define the circular economy and set it apart from disposal and even recycling where large amounts of embedded energy and labor are lost. Secondly, circularity introduces a strict differentiation between consumable and durable components of a product. Unlike today, consumables in the circular economy are largely made of biological ingredients or ‘nutrients’ that are at least non-toxic and possibly even beneficial, and can be safely returned to the biosphere— directly or in a cascade of consecutive uses. Durables such as engines or computers, on the other hand, are made of technical nutrients unsuitable for the biosphere, like metals and most plastics. These are designed from the start for reuse. Thirdly, the energy required to fuel this cycle should be renewable by nature, again to decrease resource dependence and increase system resilience (e.g., to oil shocks).

 

“You never change things by fighting the existing reality.  To change something, build a new model that makes the existing model obsolete.” – R. Buckminster Fuller

 

SMART BUSINESS...

where we talk about why you should pursue sustainability

Sustainability is smart…smart business!  Businesses that are smart enough to develop and implement sustainability strategies will gain the Green Advantage – making more green by being green.  

For decades, most business leaders would say their corporate mission was to maximize profits for shareholders and owners – the primary success metric for businesses around the world.  In theory, the value of an asset (in this case, a business) is the present value of its future earnings. This means that there should more of a long-term focus, a focus on the future, and not just on today’s profits.  A business that values continued existence into the future must focus on both short-term profit and long-term value.

Business begins with value creation. It is the purpose of the institution: to create and deliver value in an efficient enough way that it will generate profit after cost.  In other words, the purpose of a business is to create value (through work), sell or trade it to customers, and capture some of that value as profit.  Value is created, changed, or destroyed by an organization through its business model. The Business Model Background Paper for the Integrated Reporting (IR) initiative (www.integratedreporting.org) defines the term business model as “the chosen system of inputs, business activities, outputs and outcomes that aims to create value over the short, medium and long term.”1 Therefore, within the context of IR, the process of value creation is explained as follows:

“Value is created through an organization’s business model, which takes inputs from the capitals and transforms them through business activities and interactions to produce outputs and outcomes that, over the short, medium and long term, create or destroy value for the organization, its stakeholders, society and the environment.”

The capitals from which the business model takes inputs are identified in the Capitals Background Paper for IR as financial, manufactured, intellectual, human, social and relationship, and natural capital

  • “Financial capital includes the pool of funds that is available to an organization for use in the production of goods or the provision of services, and is obtained through financing, such as debt, equity, or grants, or generated through operations or investments.
  • Manufactured capital includes manufactured physical objects (as distinct from natural physical objects) that are available to an organization for use in the production of goods or the provision of services, including buildings, equipment, and infrastructure (such as roads, ports, bridges and waste and water treatment plants). Manufactured capital is often created by one or more other organizations, but also includes assets manufactured by the organization when they are retained for its own use.
  • Intellectual capital includes organizational, knowledge-based intangibles, including intellectual property, such as patents, copyrights, software, rights
    and licenses; “organizational capital” such as tacit knowledge, systems, procedures and protocols; and intangibles associated with the brand and reputation that an organization has developed.
  • Human capital includes people’s competencies, capabilities and experience, and their motivations to innovate, including their alignment with and support for an organization’s governance framework and risk management approach, and ethical values such as recognition of human rights; ability to understand, develop and implement an organization’s strategy; and loyalties and motivations for improving processes, goods and services, including their ability to lead, manage and collaborate.
  • Social and relationship capital includes the institutions and relationships established within and between each community, group of stakeholders and other networks (and an ability to share information) to enhance individual and collective well-being. Social and relationship capital includes shared norms, and common values and behaviors; key relationships, and the trust and willingness to engage that an organization has developed and strives to build and protect with customers, suppliers, business partners, and other external stakeholders; and an organization’s social license to operate.
  • Natural capital includes all renewable and nonrenewable environmental stocks that provide goods and services that support the current and future prosperity of an organization. It includes air, water, land, forests and minerals, biodiversity, and ecosystem health.

The capitals represent stocks from which value is released when the capitals are combined, transformed, and leveraged through an organization’s business activities and interactions in order to produce outputs and outcomes that represent value creation or value destruction for stakeholders depending on their interests and perspectives. However, the use of these flows should not be taken to imply that the stocks should be drawn down in the process.  On the contrary, the stock should be maintained or increased, like the corollary concept of principal and interest.  We should only be using the interest on the stocks of available capital.  The concept of maintaining or increasing the stocks – the principal, in financial terms – is sustainability.

The actions of the business model upon the various forms of capital has both positive and negative impacts on the business, society and the environment, in both short- and long-term time scales.  Value creation for the business is obvious, but the estimation of overall value creation for society is more problematic, and relates to dependencies between the company, communities, stakeholders, supply chains, and the environment.

In addition to the flows of capital upon which the business depends to build value, there are also external pressures on the business model.   The business model does not exist in a vacuum.  Michael Porter, a well-known Harvard professor known for his theories on economics and business strategy, recognized that there are five primary forces that make up the competitive environment, and which can erode profitability: industry rivalry, the threat of new entrants, the threat of substitutes, bargaining power of suppliers, and bargaining power of buyers. Generic competitive advantage strategies based on cost and product differentiation have been used to achieve lasting competitive advantage in the face of the Five Forces.  Porter’s concept of “sustainable competitive advantage” has been considered to be the “holy grail” of strategy since 1979, in a world considered to be characterized by a relatively stable state of affairs (business-as-usual), where small changes are made in order to stay ahead of the competition and maintain advantage.  It is usually characterized by a consistent output produced from consistent inputs, and a dependable situation, where businesses are reluctant to take risks and invest in change.

Unfortunately, the world is not “usual” anymore.  Many things are changing, and the speed of change is faster than ever before.  Given this, what is the value of using old assumptions to inform future scenarios? If we only use reference scenarios that include social, technological, and policy norms that have already happened, we may miss the changes that will significantly alter the trajectory of the future system.  Business is now anything but usual, much less predictable. The world is changing at unprecedented rates. Investments in innovation and efficiency are no longer a luxury to ensure greater returns.

According to the theory of transient competitive advantage (Rita Gunther McGrath, The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, 2013), business needs to move away from the heavy reliance on a single strategic framework and tool which advocates that the purpose of strategy is to achieve sustainable competitive advantage.  According to McGrath, competitive advantage is not a necessary and sufficient proposition anymore because it is transient, and requires firms to ride the waves of competitive advantage in order to survive in a fast-changing economy.

Doing things differently means innovation, and sustainability is innovative itself. Innovation is crucial to the long-term success of a company.  Companies that do not innovate will quickly be bypassed by those who and will lose their competitive advantage and possibly their business. So what can drive business toward this sweet spot of intersection between our interest in sustainability and their business interests?  We argue that the development and implementation of a sustainability strategy is a significant form of innovation, capable of achieving most, if not all, of these core business benefits.

  • increase revenue flow
  • reduce costs
  • improve customer’s ROI
  • set yourself apart from the competition (product differentiation)
  • serve the customer mission
  • underpromise and overdeliver
  • reduce risk
  • build your brand
  • increase resiliency
  • attract, retain, and engage employees

In summary, a little math…Sustainability is innovative…innovative is smart business…therefore, by the transitive property, sustainability is smart business!  Sustainability can help you achieve The Green Advantage, wherein a business creates value for itself and its stakeholders by committing to a strategy of sustainability that can achieve such benefits as cost reduction, product differentiation, risk reduction, brand enhancement, and employee attraction and retention.

 

“The reward for being a good problem solver is to be heaped with more and more difficult problems to solve.” – R. Buckminster Fuller

 

WHAT WE CAN DO FOR YOU...

and how it can help you to build value in your company by becoming more sustainable

CREATE A VISION

We help clients build a vision of future-fitness, corporate sustainability and their company’s role in the circular economy.

DEVELOP AWARENESS

We assist in developing the awareness companies need to make and execute the decision to move in that direction.

BUILD MOTIVATION

We help provide the motivation, in the form of the business case and the recognition that sustainability builds value, to make the move.

PROVIDE RESOURCES

We provide resources to assist in developing and executing a company-specific strategy for navigating into a sustainable future.

 

“Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference.” – Robert Frost

 

OUR STORY...

where we talk about our background and why we are doing this

Mr. Eric Harrington, P.E.

Green Advantage Consultants is a boutique sustainability consultancy based in Detroit, but rooted in the green hills of East Tennessee and North Carolina, and in traditional environmental engineering work. This is my motto:

“Sustainability is smart…smart business…smart community!”

What do I do? I help small-medium-enterprise manufacturers in the Detroit area prepare for the future by designing smart, sustainable solutions to business problems.

How do I do this? I work with clients to create awareness of sustainability issues, build the motivation to move in the right direction, and to generate the resources necessary to make the journey to sustainability within the context of our economy, society, and environment.

The story of Green Advantage Consultants is a tale of two roads, both of which were roads “less traveled by.”  The idea for what eventually became Green Advantage Consultants was conceived on the first road, while employed in an industry that might be voted “Most Unlikely to be Sustainable” – the Federal nuclear weapons industry.  While working  as a mainstream environmental process design engineer, happily designing industrial wastewater treatment facilities and hazardous waste management systems, and doing a little pollution prevention work along the way, I was fortunate enough to be able to attend a national DOE Pollution Prevention Conference, where it happened that two of the speakers were Gunter Pauli (head of the Zero Emissions Research Institute, and is a leading expert in the area of industrial ecology) and the late Ray Anderson (founder and chairman of Interface Inc., which became a pioneer of sustainability when Anderson publicly committed the company to sustainability through its “Mission Zero” program).  Anderson chose “the road less traveled” when he realized that the technologies of his companies and all others were plundering the earth of its resources, and that this should not and could not go on ad infinitum (for more history, please read the book Mid-Course Correction by Ray Anderson).  Just as Anderson’s original inspiration to set his company on that course was (in his words) “like a spear in the chest,” the words I heard during those presentations had a similar effect, and told me that I needed to go beyond pollution prevention, and reach for sustainability.  Pollution prevention and environmental process engineering were great, but sustainability offered much more potential.

After searching for opportunities in the field for some time, the two roads intersected.  I had the opportunity to work for, of all companies, Interface – in their fabrics division, leading their green chemistry efforts and eventually their corporate sustainability strategy after a divestiture.  What seemed like a dream job was unfortunately derailed by the Great Depression of 2008-2009.  It did, however, engender a great interest in chemicals contained in products, processes, and plants, and the hazards associated with those materials, and how we can pursue safer and healthier replacements.

Fast forward a few years, and in 2012, Green Advantage Consultants was founded as a boutique sustainability consultancy, with an initial concentration in the chemicals and toxics area.  Later on, an additional concentration in the water and wastewater area (harkening back to an earlier career phase where the design of industrial wastewater systems was featured) was added.  However, no area of sustainability is safe from our attentions.

This road has made all the difference, and I believe it will make a difference in businesses all over.  My clients have ranged from the Cradle to Cradle Products Innovation Institute (non-profit) to Washington State state government) to AlixPartners (global consulting firm) to NuCraft (furniture manufacturing).

Ray Anderson, Interface Founder and CEO

GET IN TOUCH...

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