On Monday and Tuesday at SB’19 Detroit, dozens of encouraging stories and divergent strategies emerged from the growing roster of companies on a mission to improve some of our most common products and services.
The state of circularity: Key updates on the progress toward circular business models
by Alison Ferolo
L-R: Dirk Voeste, Jarret Schlaff, Stephanie Devine, Mike Newman, Jay Hunsberger and Jo Confino
Encouraging stories and divergent strategies were shared by the startups and veteran players in this panel discussing the long and winding road toward circularity. Yet three themes pervaded each narrative:
Circularity is infringing on traditional business models,
Material innovation is a major hurdle, and
Scalability with profit takes time.
A circular bra brand and a local sneaker brand represented two startup perspectives. The Very Good Bra founder/CEO Stephanie Devine and Pingree Detroit, co-founder/CEO Jarret Schlaff spoke to the immense challenges of sourcing circular materials, while seeking a business model that sticks. Both CEOs shared that the higher purpose of their circular product drives them, but creating need in the marketplace has been, at times, quite daunting. Relying on crowdfunding and sincere purpose has garnered both brands some success, but they each struggle with access to materials fitting their product lifecycles — a challenge not exclusive to small-demand makers.
Representing the opposite end of the spectrum were BASF’s VP of Sustainability and Strategy, Dirk Voeste; and Sustana Fiber’s VP of North American Sales, Jay Hunsberger. With linear business models being cut out of the circular lifecycle, BASF and Sustana are recapturing the value chain by finding ingenious new sources of material. As Hunsberger noted, though built on recycling and recyclability, Sustana still competes with virgin paper. He spends a great deal of time educating brands on the possibilities of post-consumer, FDA-compliant paper fiber.
“I go to brands that care about the purpose first; they will be the thought leaders and they will understand that selling more offsets any cost increase. They will create demand and build awareness. By using brands willing to make that change, the circular product is integrated into the everyday.” — Jay Hunsberger, Sustana
Meanwhile, Returnity CEO Mike Newman echoed the startups’ hurdles, as well as the challenges faced by corporations. He explained the complexity of replacing an existing product that is ubiquitous, loved and working — in Returnity’s case, cardboard shipping boxes — with reuseable, recyclable shipping bags, and integrating this circular solution into the commerce stream with financial stability.
For all of the panelists, the challenges of a circular product have yet to outweigh the purpose of creating it. Each speaker noted that the efforts made by themselves and each other add up to a new system that is closer to a tipping point every day. As noted by moderator Jo Confino — Executive Editor Impact and Innovation at HuffPost — while it isn’t clear if circularity is the only answer, it is indeed, a key step toward a more sustainable, purpose-driven and brighter future.
SAP: Leveraging the power of technology and a broad ecosystem of innovators to catalyze systemic change
by Melissa Radiwon
SAP's Maggie Buggie
“After having my four-year-old and two-year-old, I have a different, deeper sense of urgency,” said Maggie Buggie, global head of innovation services and solutions at SAP. “We have to respond to create a different way of doing things.”
Buggie stressed that the way value is created and measured is changing. The best-run businesses are grounded in the greater good, manage resources effectively, plan for resource scarcity, and view consumption as a circular process.
SAP is undertaking several initiatives to change the way of doing things.
SAP Plastics Challenge. SAP gathered 170 change agents for The Plastics Cloud, where ideas and data on the plastics life cycle can be shared across the supply chain to initiate change.
SAP and Google Circular Economy Challenge. Utilizing Google Cloud and SAP tools, applicants submitted an idea for advancing a circular economy. Five finalists received mentorship, a technology package, and funding to advance their ideas. Winners included ideas touching on waste in commercial/industrial, food, battery, and textile categories.
SAP and Bumble Bee Foods Ocean to Table Initiative. Utilizing SAP blockchain, trace the route of yellow fin tuna from the ocean through the value chain to the consumer via a QR code on the package.
Buggie became emotional when she talked about how the best-run businesses make the world run better if they do it together.
“Run out in front and take a stand around these issues and take action — collective action,” Buggie said. “I use whatever power, ability, passion to drive change. We are the change we seek. We are the change agents.”
Designing for the Good Life means not recirculating the ‘bads’
by Melissa Radiwon
“We need a new language,” said William McDonough, chief executive at McDonough Innovation, at the start of his plenary session on Tuesday morning.
For the longest time, we were using the mantra of reduce, reuse, and recycle. Then it became reusable, recyclable and compostable. McDonough stressed that what is missing is recoverable.
He put a spotlight on the phrases we use for sustainability goals — zero waste, design for end of life – and asked why we strive for achieving “nothing” or the “end.”
McDonough highlighted several projects that beyond zero and provide a net positive:
- Oberlin College's Lewis Center produces more energy than it uses.
- Ford's River Rouge plant in Michigan has the largest green/living roof.
- Herman Miller's Mirra Chair was designed with ease of disassembly and recycling, and its Greenhouse factory in Michigan pays its own capital expenses.
- Method dryer sheets are made of biodegradable biological nutrient paper.
McDonough’s newest initiative is Plastic Recovery: Land and Sea (PRLS), which is focused on reducing and preventing ocean plastic pollution at the source and creating valuable materials.
“Goods and services, not ‘bads’ and services,” McDonough said. “If we just recycle stuff that wasn’t meant for recycling, we are recirculating ‘bads.’”
Dignity through identity: Blockchain creating economic identities for underserved communities
By Mandy McNeill
BanQu founder Ashish Gadnis
Next, the lively Ashish Gadnis — founder of BanQu — shared his journey visiting Congo and witnessing the forces keeping small farmers from obtaining a credit history. Although a farmer may have been successfully selling her product for years, these transactions have put her at a disadvantage; with cash transactions there is no record, and she has no power to ensure fair wages — in essence, Gadnis says, “She’s invisible in that supply chain.” The farmer owns no history of her business and therefore cannot conduct simple economic transactions, such as open a bank account or request a loan. In addition, there is little incentive for the middlemen to whom she sells her product to offer a fair wage when she cannot prove the prejudice.
BanQu solves these problems through blockchain. By offering a permanent copy of the transaction to everyone in the supply chain, the brand can be assured that its product is fair to the last mile.
By ensuring that those performing the work are actually being paid a fair price, this becomes highly relevant for women farmers.
“I’m a big believer that if you want to eliminate poverty, we need to eradicate gender inequality.” — Ashish Gadnis
Female farmers are often the most marginalized in supply chains; BanQu’s software allows them to be empowered with their own economic identity, opening a myriad of doors for them.
So, why would a brand choose to do this? Aside from the obvious humanitarian implications, brands gain immense insight into their supply chain with the possibility for better forecasting and a myriad of possibilities for gathering data. In addition, customers are pushing for this type of transparency from their brands. BanQu is offering an innovatively simple service that can give both customers and brands insight into the supply chain, while also empowering the last mile.
Feminizing the left side of the brain for optimal business, social performance
By Hope Freedman
Next, inventor, designer quantum physicist and GirlApproved founder Heidi Dangelmaier, PhD took to the stage wearing denim overalls. She considers denim overalls “on brand” — maybe because the first bib overalls were created in the 1700s solely for working men, but became a women’s fashion trend in the 1900s — suggesting that masculine and feminine perceptions can co-exist harmoniously.
Dangelmaier exuberantly presented the case that companies have been approaching processes and problems utilizing only the left side of human brains, and asserted that we need to use both sides of our brains to find different, better solutions.
Grounded in historical context, Dangelmaier explained that the reason the world seems to be imploding right now can be understood in this way: Several thousand years ago, all of human innovation was developed in a logical way. With scientific methods, we have institutionalized “logic” as the only access to solutions. However, the right brain is subjective, personal and intuitive. All animals have a left and right brain – or “brains” — and both sides of the brain are essential to use to perform, understand and relate optimally.
She introduced the notion that the logical left brain created many of today’s problems, and that humans need a “right brain intervention,” because we can’t solve problems with the same intelligence that created the problem, even going so far as to say, “The right brain is life force data — the right brain data is living intelligence and what drives our potential.”
Dangelmaier asked rhetorically: ‘How does an acorn know to become a tree?’ She replied that natural systems navigate their own expansion. She evangelized “human technology” that relates to actual intelligence and intuition, asserting that modern science uses the left side of the brain — and “everything we use in advertising, marketing and AI mirrors the left brain.”
Dangelmaier’s theory also encompasses her “96” concept — where 96 percent is the decision-making and actions going on in the right brain, and the remaining 4 percent is the proportion of the left brain that models nature.
She asserts that the technology and laws of nature, as well as foundational beliefs and tools, have come from male-oriented ways of thinking, using the left side of the brain. She encouraged the use of right brain thinking by raising this provocative question: Do girls perceive different patterns than men?
At the culmination of 12 years of experiments, Dangelmaier announced the launch that day of a GirlApproved educational initiative with the concept, “96 — Get Your Brain Schooled.” Through its work, GirlApproved leverages the feminine science of invention and design — in essence the genetic and biological range in women. Women typically sense something but are not able to explain, aside from an emotional reaction. One goal of this GirlApproved initiative is to forge a new way for men and women to understand each other and start excelling together, using both left and right sides of the brain. Dangelmaier pointed out that this also has a positive economic effect.
Is this the dawning of the age of biomaterials?
by Alison Ferolo
Image credit: Braskem
On Tuesday, an afternoon discussion around biomaterials opened avenues of communication and challenged panel speakers on infrastructure. Each panelist conveyed their specific approaches to alternative materials and that the industry is really just getting started.
As Damien Perriman, SVP of Specialty Products at Genomatica, noted, the advancements in biomaterials inspired by nature are outgrowing the constructs of ‘chemistry’ and the field is on the precipice of becoming an entirely new industry. To get there, all the panelists agreed the conversation with consumers must include more education, a point Dimitri Deheyn — Marine Biologist, Ecotoxicologist and Biomimicry Researcher at the Scripps Institution of Oceanography, UC San Diego — expanded on. Deheyn, sees a great shift in the ways academia and industry collaborate, with each becoming more educated on the other’s approach, challenges and abilities. The new level of communication between research institutions and industry has opened the field to create solutions for problems — such as microplastics — in addition to pure material advancement.
Speaking to the need for collaboration, Renee Henze, Global Marketing Director at DuPont Biomaterials, noted that to hit the trifecta of change (high-performance, scalable and beneficial), there is no one-size-fits-all solution. At this point in the journey, it is not a competitive space, and we should be racing to the top concurrently — moving the needle through both renewable and recyclable, biodegradable materials.
With a drop-in solution, Joe Jankowski, Commercial Manager of Green PE North America at Braskem, noted that bio-resins such as his company’s Green PE (polyethylene) do not disrupt the supply chain or manufacturing process, making an easy case for manufacturers to change their packaging. However, Jankowski went on to say that this approach is only one part of the solution; and said risk, open sourcing and collaboration that includes smaller innovators is truly the way forward for biomaterial advancement.
As the discussion opened to questions, there was one sticking point that had yet to be answered: How are your companies addressing infrastructure needed to get the intended results from your biomaterial products? Asked in several ways by the audience, it was clear that while the strides in biomaterials are highly respected, when the collection and waste streams cannot support them in the intended and beneficial ways, the innovation is still too far advanced for real-world application.
Perriman acknowledged that there needs to be more asking of those questions and more curiosity around the collection streams to expedite infrastructure changes. Educating the consumer about recycling in general, then adding the layers of education necessary to understand how biomaterials fit into that process, was universally agreed upon by the panelists. While who that responsibility falls to and how it is communicated was not addressed, Henze pointed out that although DuPont is not actively working to develop the needed infrastructure, it is focused on designing materials fitting into existing streams. Similarly, Seventh Generation’s detergent bottle made with Braskem’s Green PE is fully recyclable curbside.
As academic research and industry continue to overlap in the biomaterials space, the possibilities for an entirely new approach are on the horizon.
AI, automation, gene editing and unintended consequences
By Alison Ferolo
L-R: John Frey, Lina Constantinovici, Scientific American's Curtis Brainard, Roy Singh and Mitchell Toomey
“We need an OSHA for ethics. We need an OSHA for the thought risk that comes along with these things” noted Mitchell Toomey, Director of Sustainability at BASF, during a thought-provoking keynote panel on avoiding unintended consequences of scaling AI, automation and gene editing in business. The points of regulation, accountability and predictability were expanded upon as the conversation wove interdisciplinary expert perspectives into a cohesive view of the AI landscape.
John Frey, Senior Technologist for IT Efficiency and Sustainability at Hewlett Packard Enterprise, spoke to the holistic education of new degree programs such as Texas A&M’s Center for Innovation, where ethics training is a foundational aspect of the engineering and entrepreneurial discipline. Embedding diversity and dignity into programs is a key facet; doing so helps to ensure a future where multiple perspectives and voices converge to advance AI and machine learning.
Having a broad enough set of perspectives when evaluating a technology, is essential noted Lina Constantinovici, founder of Innovation 4.4. When specialists from only one field look for a solution, the possible approaches and answers are quite limited. Unintended consequences arise from a lack of diverse perspectives. Citing a new initiative among top-tier universities addressing the issues of ethics and diversity in business leadership, Constantinovici stipulated the more diversity going into AI, the more unbiased the results.
Regarding the future as a whole, Bain & Company partner Roy Singh believes the future belongs to those who understand AI and machine learning — not just the coding, but what the technology can do and how to manage it. The next generation’s understanding of AI will have a deep grasp of the interdependence of the systems, and that knowledge will mitigate failures and the risk of unintended consequences.
Predicting those consequences, and thereby avoiding them, is possible when diversity, ethics and accountability are equal parts of the conversation. Innovations of this nature need foundations built on the human characteristics of empathy and creative communication to reach the potential of AI.