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Posts by Ramon Arratia

Sweden: tax breaks for repairing old goods

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A great way to tackle our ‘throwaway culture’. The Swedish Govt. is cutting VAT on fixing everything from bikes to washing machines.

Tax based repairsOne of the main blockers in the Circular Economy is that labour taxes are higher than product related taxes eg. import/export or raw material. Therefore throwing away is subsidised and more often it’s cheaper to buy a new gadget than to get it fixed. Sweden is taking the lead and trying to fix this issue.

The Swedish Govt. is cutting the VAT rate on repairs from 25% to 12%. They are also thinking how they could cut income tax related to the labour involved in repairs.

Let’s hope more countries follow…

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Arcadis – Sustainable Cities Index 2016

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The Arcadis Sustainable Cities Index has been published.

Sustainable Cities 2016

“Cities are under pressure from all angles; some pressures are easily forecasted while others are more difficult to predict. Balancing the immediate needs of today without compromising the demands of tomorrow is at the heart of sustainability, and of this report. The 2016 Arcadis Sustainable Cities Index ranks 100 global cities on three dimensions, or pillars, of sustainability: People, Planet and Profit. These represent social, environmental and economic sustainability to offer an indicative picture of the health and wealth of cities for the present and the future.

Well-established European cities dominate the top of the overall ranking making up 16 of the top 20 positions. They are joined by the advanced Asian cities of Singapore (in second place), Seoul (7th) and Hong Kong (16th) as well as Australia’s capital, Canberra (18th). Cities around the world are living at extremes, not balancing these pillars of sustainability. While taking the lead in some areas, cities often sit lower in one area of sustainability. How can cities do more to ensure that as they develop and implement strategies and policies to address the considerable challenges they face – from environmental to socio-economic – they do so in a way that puts people first and at the forefront of their sustainability?”

 

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Setting the pace: Northern England’s low carbon economy

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Low Carbon Economy - AGToday marks the launch of Aldersgate Group’s new report – Setting the pace: Northern England’s low carbon economy.

The Aldersgate Group is an alliance of leaders from business, politics and civil society that drives action for a sustainable economy.

The report spotlights a number of low carbon case studies in the North of England to demonstrate that low carbon investment can play a significant role in bolstering the Northern economy whilst helping the UK meet its carbon targets.

This report is part of their activities to influence the development of an ambitious environmental policy by the new government and in particular that of a detailed emissions reduction plan to meet the fifth carbon budget.

Businesses, communities and local authorities in the North of England are seizing the opportunity to develop a local low carbon economy, bringing much needed investment and jobs to the region. And there is signifcant potential for further growth.

“Climate change represents a major challenge to the UK, but developing the means to mitigate our carbon emissions and adapt to the effects of climate change presents an enormous commercial opportunity. In the North of England, low carbon investment has already had a significant impact on regional regeneration. It has created thousands of skilled jobs, developed local supply chains, encouraged innovation and produced clean energy generation. In 2013 there were already 136,000 people working in the low carbon economy in the North. 

This report makes the case for greater local government support and a clear national industrial strategy to strengthen the low carbon economy in the North, create further jobs in the sector and ultimately help the UK to meet its climate change targets on time and on budget. Case studies from across the North of England show that low carbon initiatives in sectors as diverse as manufacturing, energy infrastructure, biofuels, natural assets, smart heat, resource efficiency and offshore wind are doing just this and bringing knock-on benefits for their supply chains and the wider economy.”

 

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Sustainable House Day 2016

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Australia’s most environmentally progressive homes are on show at Sustainable House Day on Sunday 11 September 2016. Designed for anyone looking for inspiration, and ideas key to sustainable living.

If in Australia it’s the perfect chance to get a real-life look inside houses that have been designed, built or retro fitted. Millions of Australian continue to embrace renewable energy, recycling and other practices designed to lessen their impact on the environment.

Sustainable House Day 2Sustainable House Day Sustainable House Day 4 Sustainable House Day 1

Find out more via this coverage:

Sustainable House Day website

Sustainable House Day on Facebook

The Guardian

Recycled Interiors

Journages

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edie sustainability podcasts

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edie sustainability podcastsedie have published a series of podcasts on sustainability that are informative, fun and fascinating. If you haven’t subscribed you can do so here.

Here is the link to my podcast on sustainability without the fluff.

The edie editorial team regularly bring the latest news, insights and inspiration from the world of sustainable business in a range of different topic podcasts.

“While George was away, senior reporter Matt paid a visit to the London showroom of the world’s largest carpet tile manufacturer, Interface, grabbing exclusive interviews with the firm’s co-innovation partner Jon Khoo and sustainability director Ramon Arratia (resulting news story here).

Then, Matt moved across the capital for an in-depth discussion with James Pitcher, corporate social responsibility director at the UK’s largest hotel, restaurant and coffee shop operator Whitbread. In this sustainability skills-focussed interview, Pitcher provides us with his top tips on communicating CSR initiatives with both internal and external stakeholders.

The usual podcast features complete this week’s episode, with Matt offering his top picks from his ‘green innovation of the week‘ feature series, and George analysing his stand-out ‘sustainability success story’ of the past seven days.”

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Time to look at product portfolios from the sustainability perspective?

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More and more companies are measuring the environmental impact of their products holistically, through life cycle analysis, and as a result many are making significant changes to the products they sell. There is also a movement towards measuring natural capital in order to have the full account of companies and products. These are great steps in the right direction towards product sustainability. But it’s one thing to make more socially and environmentally friendly products and services available; quite another to get customers to buy these instead of less sustainable options that are often cheaper or more familiar.

What’s the point in a company developing a AAA-rated eco-product that only sells in small quantities while its far more environmentally damaging B-rated product is still on the market and sells 50 times as many units?

It’s often been argued that as long as companies give consumers a choice, then it’s down to the consumers to make the ‘right’ decision. But experience tells us that we can’t rely on consumers to do this. Survey after survey demonstrates that consumers habitually claim they will take social and environmental issues into account when buying goods and services, but sales figures show that these good intentions are often forgotten by the time they get to the checkout.

The ‘ethical consumer’ does exist, but only in small numbers.

product portfolio from the sustainability perspective

This is why governments are increasingly stepping in to edit the choices that consumers are given, by creating rules of the game that favour a transition towards more sustainable products. Often this means cutting out the worst offenders in the market either by directly banning certain products or by setting a minimum standard – as with European measures on incandescent light bulbs or the REACH regulations on chemicals. However, such initiatives only cut out the end tail of the curve.

Governments can also facilitate the adoption of the best products, for example by committing to buy them in their public purchasing programmes. That increases the length of the tail at the other end. Even more interesting is when governments try to push the whole curve towards the right, for example by setting up tax incentives and penalties designed to promote the sale of more sustainable products. The bonus-malus tax on cars in France and the company car taxation scheme in the UK are examples of this. But sometimes just the creation of a legal requirement for labelling of the sustainability performance of products can do the trick. The EU labelling laws on white goods have been successfully pushing consumers towards AAA rated products for a long time.

We should not always, however, be waiting on governments to show the way.

It’s up to companies as well. Businesses that want to push the sustainability agenda cannot be content to delegate leadership to the government or consumers. After all, the ultimate sustainability brief of a company is to drive its entire portfolio towards its most sustainable products. The first step towards doing this is to introduce more sustainable products into a company’s portfolio, which can be a significant feat in itself for some types of products. But the next step is to manage that portfolio by editing consumer choice. That means removing more damaging products and services from the market while progressively convincing customers to buy the more sustainable ones. Unfortunately this idea of companies managing their entire portfolio is hardly heard in the current sustainability debate.

Who can push for portfolio management?

The most obvious actors who can push for portfolio management are the companies manufacturing and supplying products and services, and the retailers who sell them. Either party can lead the way. If retailers show little interest in changing what they sell, then supply companies can force them into it by default by managing their own portfolios and therefore changing what they are offering for sale. But if supply companies are dragging their heels, then retailers can galvanise them into action by refusing to stock certain products. Ideally both parties will take an active role in sustainable portfolio management, with retailers finding that companies are increasingly providing them only with products that have lower impacts, and retailers increasingly deciding to inform companies that they will not stock certain higher impact items.

Corporate portfolio management

If a company is serious about reducing its life cycle impacts, firstly it has to create products with lower impacts and secondly it needs to sell more of those products and less of those with a higher impact. Put simply, it must sell more of the good stuff and less of the bad. Sometimes the damaging effects of a product are clear and immediate. For example, a number of chemical companies, including Henkel, have adopted a socially responsible stance by removing ingredients such as toluene from adhesive products that can be misused by solvent abusers. And of course they then don’t then leave the ‘bad stuff’ on the market – that would defeat the purpose.

Taking such affirmative action usually protects a company’s reputation, prepares it for future legislation and can give them a commercial advantage in some markets. Of course it’s good if a company starts, in this way, to sell more sustainable products. But we need to understand how a business’s entire portfolio behaves. Even if sales of good products do very well, it’s no good if sales of bad products are continuing to increase at the same time.

A popular eco-products story has been GE’s ecoimagination – the drive to increase GE’s portfolio on technologies for sustainability, such as wind turbines or efficiency solutions for buildings. GE announced revenue goals for these technologies when it launched ecoimagination. But it also had goals for advancing the sales of other, less desirable technologies – such as piping materials for the oil and gas industries. So it’s not clear whether the average footprint of GE’s entire portfolio will decrease over time.

Another high profile eco-products story has been Philips’ Ecovision, under which they have set themselves a 2015 target of a 50% energy efficiency improvement for their average total product portfolio compared to 2009. This is a much better approach. Showing improvements in sustainability performance of the whole portfolio in this way will be a must for companies in the future. And it won’t be as difficult to achieve as at fist it might sound. At Interface Europe we managed to cut our average product carbon footprint by 27% in just four years from 2008 to 2012.

Retailer portfolio management

Any life cycle analysis carried out by a retailer will reveal that the biggest impacts of its activities are not in its own operations – the running of its stores – but in the embedded footprint of the goods and services it sells. A supermarket can make its lighting and its refrigeration as energy efficient as possible, but it’s the stuff that it puts on the shelves that makes the real difference. This means that to make any significant difference to environmental impacts, retailers must take on some accountability for what they are selling – by making sure they don’t sell the really bad stuff, by pushing their suppliers to give them more sustainable products, and by encouraging customers to buy them. The pre-requisite for this kind of portfolio management – or ‘choice editing’ – is for retailers to demand Environmental Product Declarations (EPDs) from their suppliers for each product they sell.

Because these EPDs are based on life cycle analyses, they allow products to be compared in a meaningful way. But you don’t need full EPDs to see the bigger picture. After all, it’s no good fiddling about at the margins to produce small gains when you can make much more significant progress at the core. According to Tesco, for instance, the carbon footprint of a class 1 carrot is 80g CO2 per 100g of serving, while the impact of a Scottish carrot is 84g. Who cares about that difference when the footprint of a 100g serving of beef is a massive 1,000g CO2? Surely Tesco should be trying to encourage people to eat less beef and more carrots?. And for that matter, shouldn’t they be helping us to shift from high fat, high sugar diets to healthier options? Those shifts should, arguably, should be at the core of a supermarket’s environmental and social responsibilities.

Choice editing can be easy

It’s actually very simple for retailers to begin choice editing. The UK do-it-yourself retailer B&Q has seen this, and it has already begun to edit its product portfolio on sustainability grounds. For example, after life cycle analyses showed the extreme energy inefficiency of patio heaters, it simply took the decision not to sell them any longer. It may have lost some short–term income by withdrawing patio heaters, but it also gained many plaudits. However, in the words of the UK Sustainable Development Council, choice editing is not just about cutting out unnecessarily damaging products; it’s also about ‘getting real sustainable choices on the shelves’.

Providing such choices doesn’t have to be about bringing completely new products to the customer – it can be about making sure the best products are the only ones available. A number of UK supermarkets now stock 100% fairtrade bananas, so customers who want to buy bananas have no choice but to buy fairtrade. The same happened over a number of years with FSC-certified wood, to the point where it has now it’s become European law to stock only such material.

There are plenty of other areas where retailers can show strong, positive leadership. What excuse is there, for instance, for a retailer to be selling anything other than electrical appliances with A+++ energy efficiency ratings? If Walmart decided only to stock the most energy efficient A+++ appliances tomorrow, imagine what difference that would make to the thinking of manufacturers who are its suppliers – and to Walmart’s overall footprint. It would also make it easier for governments to ban all rating categories but the most efficient ones.

But portfolio management is also about what you don’t yet sell. If supermarkets have expanded to adjacent markets such as mobile phone contracts or motor insurance, then surely they can expand into products that are solutions to social or environmental challenges? IKEA, for instance, has just become the first large retail chain to start selling solar panels – with the express purpose of trying to transform consumers’ attitudes to energy (as well as making money). With the same aims in mind, Sainsbury’s is providing loft and cavity wall insulation to customers, as well as solar panel installations.

Asset portfolio management

Portfolio management isn’t just about products and retailers; they are just the most obvious examples. A similar model can be applied to services, and indeed investment and asset management. Many asset managers already edit their investment portfolios by avoiding controversial investments in companies that manufacture cluster munitions, for example. Apart from specific ethical investors, the list of ‘no go’ areas remains pretty limited for most mainstream investors, but this model could be extended to a less black and white approach, actively promoting more sustainable investments and choosing not to invest in less sustainable activities. For assets such as property, for instance, the environmental options are very clear.

Where do we go from here?

None of this is rocket science – we just need the willpower. But it does mean changing mindsets: moving away from measuring performance at corporate level to measuring the company’s entire portfolio on a life cycle analysis basis. And it means shifting from the idea of producing a few high-profile green products designed to catch the public’s eye and towards mainstreaming of those green products. It also means taking on the moral responsibility of trying to influence the behaviour of consumers.

To help us on our way, we must remember that this kind of portfolio management already goes on all the time. Companies change their product ranges continually; they drop old models and bring in new ones. Department stores choose to put 15 different types of kettle on sale, not the full range of 515 available to them. So the only radical thing about sustainability portfolio management is the ‘sustainability’ part. That’s what we need to get to grips with, and the quicker we do so, the more dramatic will be the results.

Of course there are some potential pitfalls, but these are not insurmountable. If retailers or manufacturers are earning lots of money by selling or making higher impact products, then they need to be careful about how they make the switch. When Iceland, the UK frozen food retailer, tried to move overnight to selling organic food, large numbers of its customers walked away – and it had to reverse its decision. But the lesson here is not that portfolio management doesn’t work – it’s that it has to be carefully managed. Companies and retailers should know their customers and introduce changes over a period of time, helping to educate them about what they’re doing and using all the marketing resources at their disposal.

Key to all this will be transparency of environmental performance, which will help consumers choose products on sustainability factors. People used to buy light bulbs based on wattage; now, increasingly, they are buying them on energy performance. That switch has been achieved by good labelling and by good education. Some of changes will be driven by regulation, others by B2B demand, some by companies and retailers themselves, competing against each other. But the sustainability movement as a whole needs to push in that direction. It provides fertile ground on which to compete, and that is what companies love.

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Sustainability without the Fluff – Event Invitation

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Ramón Arratia invites you to the Event: Sustainability Without the Fluff

Monday August 1st from 12:30 to 2 pm at our Showroom in London. (lunch at 1230, discussion starts at 1pm sharp)

Join the discussion on:

* How to embed sustainability into your company

* Why a business case is more interesting when it goes beyond reputation, brand and internal engagement

* How to achieve higher margins, expand to adjacent markets and set barriers to entry

* Why product redesign can have a positive impact on the environment

* Different ways to extract value from sustainability

* How achieving a 98% carbon reduction is possible

* The circular economy in practice: what works and what is fluff.

RSVP: showroom@interface.com | 020 7490 3960

Ramon Arratia_05

Ramon Arratia is a sustainability director with 17 years of practical experience in corporate positions at multinational companies such as Interface, Vodafone and Ericsson. He was named by The Guardian newspaper as one of the world’s top sustainable business tweeters. He is a strong advocate of product sustainability through his popular blog (interfacecutthefluff) and gives 50 speeches a year on the subject. He campaigns for stronger and more efficient European regulation based on product standards, for revisiting corporate sustainability reporting and for many years he led the ‘Cut the Fluff’ campaign against labels, certificates, partial truths, marketing claims and all the components of the old sustainability beauty contest.

Ramon has an MBA from Warwick Business School, a MSC in Quality and Environment from Spain and a degree in chemistry. This mixture of business and technical education has given him a privileged perspective to understand both the geeks (LCA practitioners, academics, engineers) and the geezers (marketing, PR, sales, sustainability consultants).

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Interface Global reduces its own GHG emissions by 92% (98% in Europe)

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I am very proud to present the following numbers:

At Interface Global we have reduced our own GHG emissions by 92% (98% in Europe) by a combination of halving our energy use (45% globally, 54% in Europe) and then using renewable electricity and renewable gas. Today getting to 100% renewable electricity is possible, access to biogas a bit more challenging but all serious companies should aim at 100% green energy. That’s why we have joined the RE 100. Yes, they don’t focus on gas yet but there are an increasing number of companies switching to 100% renewable electricity.

One of the indicators Im very fond of is achieving 50% of all our raw materials from recycled and bio sources. This includes making yarn from discarded fishing nets ormaking latex from recycled PVB from car windscreens. For every raw material there is an alternative which is recycled or low impact biobased. Our goal is to scavenge waste foremother industries and treat it as food for our products. We are now investing in flexile manufacturing, that is lines that are flexible enough to handle different recycled or bio sources. We hope we can get much closer to 100% by 2020. A big challenge.

That brings me to the idea of taking ownership of the embodied carbon from our products. Companies should not only decrease their own emissions but also decrease the emissions of their products’ carbon. In our case, it’s mostly embodied carbon from all the supply chain processes. In only 7 years, we have been able to decrease that entire chain embodied carbon by 31% globally (39% in Europe). Product design is the key in doing this. The same you can design a car so that it’s more efficient in the use phase, you can design a kg of cement or a m2 of carpet so that it’s more embodied carbon efficient.

2015 Global EcoMetrics Highlights

  • GHG emissions per unit of production is down 92 % since 1996
  • Energy use per unit of production is down 45 % since 1996
  • Renewable energy is 84 % of total energy use at manufacturing sites
  • Recycled and biobased materials now make up 50 % of total raw materials use
  • Water intake per unit of production is down 87 % since 1996
  • GHG emissions of entire supply chain and own production of our carpet is down 31 % on average since 2008

2015 European EcoMetrics Highlights

  • GHG emissions per unit of production is down 98 % since 1996
  • Energy use per unit of production is down 54 % since 1996
  • Renewable energy is 95 % of total energy use at manufacturing sites
  • Recycled and biobased materials now make up 50 % of total raw materials use
  • Water intake per unit of production is down 98 % since 1996 
  • No waste to landfill
  • GHG emissions of entire supply chain and own production of our carpet is down 39 % on average since 2008

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Germany’s success on renewable energy

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Last year, European renewable energy production was ahead of nuclear power at 29% vs 27%  and 26% of coal. Electricity generation from renewable energy sources had grown substantially between 2010 and 2013, growth between 2014 and 2015 was moderate according to the Agora Energiewende policy institute.

Germany, world’s 4th largest economy has generated 90% of its power needs from renewable energy last Sunday, May 8th. That’s huge. According to Agora Energiewend ‘ graphic, a German think-tank and policy laboratory, at 11 am local time the total output of German’s renewable power, wind, solar, hydropower and biomass has reached 55 gigawatts. 

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Considering that Germany is Europe’s biggest economical power, this demonstrates that wind and solar energy can keep the pace with the demands of this society. But also, we cannot forget that Germany is not exactly the king in sun. Other countries have much more capacity to produce, yet still not until long ago Germany was world’s leader on solar energy.

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The secret to Gemany’s success in renewable energy are the individuals. Smart policies have pushed people and businesses to the renewable market, and in 2012 individuals owned more that a 3rd of Germany’s renewable energy capacity. 

Still, Germany gets most of its power from fossil fuels. On average, renewables supply a 30% of it’s needs. Sunday’s peak resulted from a combination of reduced demand, abundance of wind and sunshine. But this does not make it less important. It still is a huge proportion generated. 

The European Union has resolved to reduce greenhouse gas emissions by a minimum of 40% below the 1990 levels and raise the renewables share in final energy consumption up to 27%. To reach these targets, the share of renewable energy sources in the electricity sector must rise significantly in the next few years and we must reduce / decline coal-based power substantially. 

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