From World Changing:
Factor 10 and Sustainable Business
Sustainability Sundays
Gil Friend is a systems ecologist and business strategist, and is the CEO of Natural Logic, an environmentally-focused strategy, design and management consultancy. He writes a regular blog on issues of business and the environment. Gil has agreed to write occasional essays on sustainable business for our Sustainability Sunday feature, and we are happy to add his voice and perspectives to our site. Take it away, Gil:
The legendary Prof. Dr. Friedrich Schmidt-Bleek was unable to leave Europe to keynote the Pacific Industrial and Business Association annual Silicon Valley Environmental Management Conference this week, so Ed Quevedo of WSP Environmental ably pinch hit a discussion about "Factor Ten" -- and offered an important "heads up" to the participating companies.Schmidt-Bleek heads the Factor Ten Institute, and coined the MIPS (material input per service) unit at the Wuppertahl Insitute in the early 1990s.
I first encountered this work in the book Factor Four -- subtitled “Doubling Wealth, Halving Resource Use -- by Wuppertahl’s Ernst von Weizsäcker with Amory and Hunter Lovins. Schmidt-Bleek decided that wasn’t good enough, and declared, as Quevedo put it, "that because of the extraordinary inefficiency of industrial society, we need to become ten times more efficient in everything we do."
The root cause for the growing ecological crisis, notes the Factor 10 website, is the massive and frequently indiscriminate use of natural resources, including energy carriers, land and water:
On the average, more than 30 tons of non-renewable natural resources are invested today for every ton of goods, with increasing tendency. [...] On the average, citizens of OECD Member states consume some 20 times more non-renewable resources than the Vietnamese.
Governments have taken up the Factor 10 challenge, in a way that is changing European business – and that will helpfully change business worldwide. Three data points:
- Austria put Factor 10 into long-term environmental plan in 1995.
- Japan put Factor 8 into its long-term financial plan in 1997.
- Three committees are developing EU level policies to drive F10.
Quevedo: "Once the EU clock starts, we see typically see regulations in five to seven years. We talked in 1993 about product takeback, and now we see that coming into practice. We talked in 1995 about chemical regulation with an FDA-like approval process, and now we see REACH. Now people are talking about taxing natural resource use. This is major emerging business opportunity, but the regulators will catch us if we don’t do it on our own."
What to do? Current environmental policies cannot lead to sustainability, because they essentially address only the output-side of the economy. The key, instead, is dramatic dematerialization -- or as Bucky Fuller called it half a century ago, ephemeralization -- a radical improvement in resource productivity.
In order to approach ecological sustainability, the resource productivity in western countries has to be increased by at least a Factor 10, compared to today. A demateralization of this magnitude will also dampen the energy demand by ca. 80%, opening completely new vistas for de-carbonization and for supplying sufficient energy to the 2 billion poor of this world.
The only question is whether this change will be driven by succeeding waves of EU regulations -- which will continue to push businesses this way, “I guarantee it!” -- or whether companies climb into the design innovation drivers seat. The other only question is whether the US will once again will surrender major market share to global competitors, or apply its innovation engines and seize the day.
