Top 5 Takeaways
In Nov 2019 one of my favorite bands – Coldplay – released its new album Everyday Life, they also made an announcement that they will not be touring to promote their new album given the increasing concerns on environmental impact on concerts. This was followed up in Dec 2019 with Greta Thunberg deservedly earned the recognition of Time Person of the Year 2019 – which signed off a year where Environment and Climate took the much-needed center stage especially with the increasing lack of political consensus to tackle the rapidly deteriorating environment and lack of urgent action.
Within our Sustainability and Circular Resource Economy Practise, we stress that the Future of Sustainability will be shaped by three key elements: Sustainability & Circular Resource Economy, Risk & Resilience and Digital Transformation. The key driver of Sustainability will be shaped by the 17 Sustainability Development Goals(SDGs) and our Thought Leadership focuses on 4 key SDGs – #6-Clean Water & Sanitation, #11 – Sustainable Cities and Communities, #12 Responsible Consumption and Production and #13 – Climate Action.
In Dec 2019, we contributed for a piece published by Aquatech Group in which we enlisted our top 5 predictions for 2020 for the global water industry (https://www.aquatechtrade.com/news/article/water-trends-2020/) – in that we predicted the top 2 to be Climate Action – Net Zero Initiatives and Sustainability Roadmap to 2030. With regards to Climate Action – it stated: “industrial, commercial and retail too will get onboard in rolling out initiatives and services in reducing emissions both within their supply chains, operations and customers”. As for Sustainability Roadmap – it stated: “2020 is set to become a year of re-calibration to equip themselves with the necessary technology & services as we witness a crescendo of action aimed at realizing the vision of sustainability”.
World Economic Forum(WEF) 2020 has become a watershed moment for both recalibration and cross-stakeholder action in catalyzing much-needed push in reaching Sustainability Development Goals with the Circular Resource Economy Model to utilize resources in a regenerative and restorative manner begin to contribute to the process of Climate Action.
Here are my 5 Key Takeaways from WEF 2020 in the context of Sustainability and Circular Resource Economy:
1. System thinking and stakeholder capitalism gain momentum with WEF 2020 themed “Stakeholders for a Cohesive and Sustainable World”: A key event leading up to the WEF Summit has been the publication of the report on the global risks. One of the key findings of The Global Risks Report 2020 was that the Top 5 Risks for 2020 were all environment and sustainability-related – for the very first time. This can clearly be a watershed moment for the global movement for sustainability and the circular economy and the focus on stakeholder capitalism drives the need for collaboration and partnership across industry value chains supported by the research, business and financial community. One of the key highlights of WEF 2020 was also the letter by Larry Fink – Chairman and CEO of BlackRock to his clients announced transformative initiatives focussed around sustainability as it will become the basis both for its investment approach as well as making sustainability a key element in forming portfolios as well as managing risk. Part of the transformative initiative was to exit investments with a high-risk on the sustainability index.
2. Digital steps up from enabler to leader in climate action: In the lead-up to WEF 2019 a paper was published by the WEF titled – Forth Industrial Revolution: Beacons of Technology and Innovation in Manufacturing. The paper analyzed the findings from digital transformation projects at 16 sites across the world that had implemented Manufacturing 4.0 technologies. The results highlighted expected gains in competitiveness, productivity and energy efficiency – which also translated to a significant reduction in waste of resources and emissions. At WEF 2020, one of the biggest announcements was by Microsoft that they would go beyond carbon neutral to carbon negative by 2030 – which sets a new benchmark in terms of corporate goals in the context of climate action.
3. Digitalization in Resource Management Revolution and Recyclable Resource Monetisation – Over the last couple of year, we have witnessed an exponential increase in activity across stakeholders on the topic of plastic waste management leading to the formation of alliances such the WEF’s Global Plastic Action Partnership (GPAP). At WEF 2020, SAP announced that it had joined the GPAP and also launched its upgrade of the Plastics Cloud, which is used by businesses aiming to shift away from single-use plastics with a key focus being on setting up better customer experience as well as driving a change of circularity. Digitalization in the resource management revolution is driving change especially in key areas such as tackling food waste – with an alarming statistic – one-third of food produced ends up as waste. The Kitro AI food bin utilizes the visuals from the camera fitted in the bin and the AI process to record and analyze what was not being eaten and thrown away. The solution claims to reduce food waste by about 40%. Smart packaging is also witnessing rapid developments and WEF 2020 witnessed the Interactive IML Packaging by P&G in partnership with Digimarc and Talkin Things, Holygrail. Smart Packaging will have a key role in enabling better sorting, which is a key bottleneck in recycling.
One of the milestone announcements at WEF 2020 with regards to packaging was by Nestle with sets the ball rolling for Recyclable Resource Monetization as it will pay a premium for recycled plastics. Nestle plans to invest in the better sourcing of its recycled plastic for its packaging with an additional objective of having all its packaging recyclable by 2025. It will certainly be encouraging to see similar approaches for aluminum packaging which is currently witnessing significant bottlenecks with its recycling rates slumping both in Europe and North America with increasing stockpiling of used beverage can bales and falling prices.
4. Supply Chain Sustainability to drive Resource +ve – Following on from the path-breaking and trend-setting announcement of Microsoft going beyond carbon neutral to carbon positive – Starbucks set a new sustainability benchmark with a goal of being resource +ve. It has a 5 point strategy that covers eco-friendly stores, investment in managing waste(including food waste) both at its Starbucks stores as well as adjoining communities, expanding plant-based options, shift from single-use to recyclable packaging and investment in innovative agriculture. A key target with respect to its supply chain sustainability is to reduce carbon emissions in Starbucks direct stores and supply chains by 50% by 2030. The cornerstone to its resource +ve strategy will involve storing more carbon than it emits as well as supplying more clean and freshwater than it uses.
5. Demand-side management will be crucial in addressing Day Zero: A couple of years ago, the city of Cape Town faced the grim prospect of running out of water by March 2018 – referred to as Day Zero. In my article for the Anniversary Addition of the Smart Water and Waste World in Oct 2019 on the 5 Point Agenda for the Water Sector in India – I highlighted the importance of demand-side management such as water conservation at the household level to play a crucial role for ensuring a sustainable supply of water. At WEF 2020, Procter & Gamble highlighted one of its key initiatives of “The 50L Home Affiliate” program, which aims to have per capita water use to the sustainable level of 50 L per person per day compared the current levels of around 150 L per person per day in most cities. It was great to see the panel attended by companies with different roles in the water value chain such as Suez and Jacobs as well as the Minister of Finance from the State of Punjab.
Recognizing and promoting best practices of Sustainability is another aspect that will accelerate the pace of change. In the 2020 Global 100 Sustainability Ranking Results published by Corporate Knights – it was great to see many of our clients such as Neste, Enel, Osram and Outotec in the Top 20.
The decade of 2020 to 2030 is set to be the “Decade of Sustainability” and Frost & Sullivan’s Sustainability & Circular Resource Economy Practise aims to influence, shape, define and support its clients in their sustainability agenda with a focus on the SDG’s and in particular SDG’s #6- universal access to drinking water and sanitation, #12- responsible production and consumption and #13-climate action.