Seamless Sustainability

Let’s all apply a growth mindset to the scalability conundrum of sustainable solutions?

The word ‘sustainability’ is everywhere and, occasionally, when a word is used in many ways by many people it might lose meaning, create confusion and/or its impact is diluted. I’m hoping this post will help reinvigorate your excitement for a future in which people, planet and ‘growth’ live in harmony.?

To do that let’s first address the word ‘growth’, when I talk about growth I do not mean that anything can grow infinitely. Some trees have to fall to allow others to grow, some will grow for 36, some for 360 and others for 3600 years. So rather when I use the word growth, think growth mindset; a process where the aim is to continuously improve. Improving something also means embracing trial and error (e.g. failure) and knowing that an ‘end’ product is never final.?

Let’s all look at the economy through the lens of how nature evolves over time (green economy?); it might not always be picture perfect yet all processes play their part in a bigger whole. We need both our public sector and business ecosystem to be more in sync with the planet, so why not accept our economy as a living organism that evolves like nature.?Be it in automotive, energy, FMCG or other industries, many new innovative solutions are being developed that replace, rethink or improve existing products and services to make sure sustainability is at the core (see end of post for examples!). Scaling at pace encounters several complications along the way, below I discuss two complications which you can have a direct effect on, be it as a consumer or as a stakeholder in business.?

It is no secret that sustainable innovation requires patience, dedication and commitment from multiple parties. Some solutions do not make it to the global stage, in part this is because spending time on Research and Development (R&D), or iteration, requires time and is capital intensive. Throwing millions at a process without short term results might easily be viewed as wasteful by the public (and managers in most businesses wouldn't dare to sign off on the boldest such investments). Besides, half finished products or solutions usually don't win popularity contests.

Allow me to explain why it isn’t wasteful and why we need money, time and support from a wide variety of stakeholders. We need to see more popularity of the process that leads us to a solution and not just the (successful) solution itself. Not least because a globally renowned brand like Tesla would have been unlikely to get to where it is today without the US government loan of $465 million it received in 2009.*

Affording a?Tesla?

When you finally do get to a point where sustainable solutions can scale, you might well end up with the brand status of a Tesla, Patagonia or Beyond Meat. With these and many other brands that are perceived sustainable a first complication arises due to their novelty and indeed the aim to ‘recoup’ the millions invested in R&D; affordability.?

“The strategic price you set for your offering must not only attract buyers in large numbers but also help you to retain them.” — W. Chan Kim

Let’s call it sustainable scalability complication no 1; seeing multiple competitors scaling to a point where novelty wears off and where we can drop far below premium price point levels. Tesla is unlikely to drop its prices overnight unless it enjoys a significant amount of competition.

As such Tesla remains in a price range far beyond affordability for the vast majority of us. Although board rooms at large automotive giants might well ridicule (or envy) its company valuation, one which goes beyond Buffet’s wildest imagination and of which even Elon Musk has admitted is ‘crazy’. It is well known that the automotive giants are trailing behind Tesla’s technology stack and catching up has a huge price tag attached to it. This means that until very recently (think post-emissions scandal), the focus on sustainability in R&D hasn’t been pursued boldly enough by incumbents. Sure R&D has always been an integral part of any automotive business, iterating on engine efficiency, safety, design and indeed sustainability among other parts of the production process. Yet it is well known that R&D is an expensive endeavour and a cost easily curtailed when a company's finances are under pressure.

Looking at an automotive giant like VW, whose R&D spend increased from ￡10.9bn (2016) to ￡14.3bn (2019), it states that R&D’s main focus in 2019 was on electrification. That said, it is difficult to make out how much of it will be attributed to the creation of a truly ground-breaking overhaul to make sustainability the norm across its entire vehicle portfolio. Incremental iterations are great and an increase in spend is encouraging yet the question remains is it bold enough? It remained to represent only 6.8% of revenues. To truly have an impact at an accelerated rate R&D spend solely on sustainability needs to increase significantly. Yet, especially now profits have decreased steeply during the pandemic, will it??

In the case of VW one of its mid market models, the ID3, remains at a €30k+price point. In part this is likely priced as such to recuperate on some of the cost of R&D, the other reason is more broadly addressed below (sustainable scalability complication no 2). In order for price points to drop below a point where all consumers can afford to close their own say-do gaps, variedly priced alternatives need to be introduced at every market level (and fast)!

Sun shine…

One answer to the question ‘is it enough’? Can be found when looking at Sono Motors , the car it is developing has solar panels in its body combining plug-in and regenerative technologies. The process of developing this car hasn’t been without hurdles and has taken several years, indeed in 2019 if it were not for the €50 million euros of crowdfunding the team would have had to pull the plug. Similar to a company like the electric two wheeler startup Etergo?, which sadly went into administration in 2020, institutional investors steered clear because of the deep pockets of incumbents. However, as highlighted above those incumbents are as of yet too ‘slow’ in bringing affordable and sustainable alternatives to market.

In itself this is a broader issue, leading us to to sustainable scalability complication no 2?

Society celebrating failure in order to?succeed

A car like the Sion , besides it being celebrated by society’s sustainability champions might also receive a lot of public critique. Perhaps it is innate scepticism due to stories of greenwashing; do we truly believe for-profit entities have our best interests at heart? Another reason might be our digital society induced attention span deficit, there is a lot to take in when it comes to these sustainable solutions development processes. Dismissing something is easier when you don’t have all the facts. Besides, many want ready made and seamless solutions, not complicated stories of what might be one.

The process to produce this car takes years and while it is being developed it needs to market itself to prove market worth, mainly to gain traction with investors and other parties. A sometimes vicious cycle as our collective imagination might not render an end product that is wildly successful, rather we point out flaws and dismiss its market viability (in some cases too soon). Hence, public opinion also needs shifting; sustainability can scale faster if all parties, including wider societal stakeholders, embrace the fact failure and flaws are part of the process. Fail, but fail fast (growth mindset) will mean scaling journeys can accelerate. Public opinion, indeed our collective emotive mindset, often drives investment and multi-stakeholder action. Similarly it drives inaction where action might be needed!

So how do we collectively stay optimistic while seeing failure around us? Incumbents, governments and disruptors working together on Public Relations (PR) might help bring this about. Being in competition with each other is good yet lifting the competition especially when the planet is at stake is ground-breaking. A very bold example of a PR stunt could be for VW to come out and support a disruptor like Sono Motors with a significant charitable grant.

In conclusion, the majority of us need to normalise that sustainable alternatives shouldn’t cost more and indeed producers need to make sure that all is done to be able to reach the point where price is no longer a factor in choice for the many. Secondly, let’s not aim (nor wait) for Sono to become the next Tesla or a giant like Volkswagen, let’s embrace failure to bring sustainability as standard across all market levels for all products and services. We don’t need a few sustainability unicorns or giants, we need many, many sustainability champions, and let’s cheer those who fail for their efforts. Allowing the entire economy to morph into a healthy competitive environment in which all activities are conducted in harmony with people and planet.?

Just a few fantastic disruptors championing sustainability in their respective industry beyond Sono Motors;?

• H2GO (clean, reliable power from renewable sources that meets decarbonisation targets fast)
• Notpla (evolutionary material made from seaweed and plants. It biodegrades in weeks, naturally)?
• Toraphene (Graphene is blended with biopolymers to produce Toraphene, a plastic alternative)
• Recycling Technologies (recycling single-use and other previously non-recyclable plastics)
• Carbon Gold (Biochar is a very pure, high-carbon form of charcoal that improves the structure, aeration, water-holding capacity and nutrient retention of soils; 1 tonne of biochar in the ground is the equivalent of 3 tonnes of carbon dioxide permanently sequestered from the atmosphere!)
• Pavegen (energy generating tiles which simultaneously help pavements become part of the smart city)?
• Orbital Marine (a unique floating platform is moored via anchors in powerful tidal stream or river currents. Underwater rotors capture the dense flowing energy)
• Witt Energy (power generated from motion)?
• Hycube (self-produced energy storage solution for consumers)?
• Yayzy (an app that helps you track and offset your carbon footprint automatically)
• Magway (A zero-emissions -e-commerce- delivery system)

*= Mazzucato, Mission Economy, page 53 (2021)

?= Money and time that has gone into developing the electric two-wheeler (Etergo) hasn’t gone to complete waste as Ola Electric (part of Ola) bought the IP and is now building a factory to produce at scale.