Trends

We can opt for clothes that are made in countries with stricter environmental regulations for manufacturing. We can choose natural and organic fibres that are produced without the use of harmful chemicals. Our choices need to be for more sustainable brands to enable the #NetZeroShift.

All in all, these are exciting times for the fashion industry. The fashion revolution is well underway, and every day we see new pioneers being born. Before you know it, sustainable fashion will no longer be just a trend but the new normal. Brands that distinguish themselves as ‘responsible’ and ‘sustainable’ will most likely gain the larger share of the millennial consumer’s wallet.

At the same time stakeholders need to actively engineer the conditions for strong ventures to emerge and succeed in order to future-proof a sustainable business model for the fashion industry. This includes addressing a financing opportunity of $20 billion to $30 billion per year until 2030. At the moment though, the funds that are being raised are a mere fraction of what is actually needed given the size and scope of the fashion sector. 2021 is likely to see fashion recovering from the aftermath of the pandemic, but more than ever the focus on a green recovery is likely to be paramount. However, to manage the transition towards a circular and low carbon based business model, vast sums of money are needed. These are now being enabled through sustainable finance.

Even before the pandemic began, the United Nations published research predicting potential labor shortages for economies worldwide. The pandemic has only hastened and exacerbated the situation. Today, we are in the midst of massive resignations in company after company and lack of staff to do even basic things.

The #SmartFactory is expected to solve some of these problems. It would use robots to solve labour shortages. A survey by ProShares in 2020 reported that 24% of manufacturers were incorporating smart manufacturing. This is expected to more than double by 2026. However the Smart Factory would need to deploy not just robots, it would need to bring in the principles of sustainability too. Also, even if ‘how you make things’ is standardised, ‘how you source’ and ‘how you ship’ would still have a significant impact on your carbon emissions.

This will be enabled by the new generation of customers who will demand corporate action against waste and brands that care not just for their profits but causes that create a better world. Reverse supply chains will become an integral part of business as companies integrate into the circular economy.

The period from 2022 to 2030 will therefore be about producing goods in different ways. As we get into the 5G world, machines will get smarter and quicker. #AI and #machinelearning will be able to anticipate, produce and deliver products based on demand.

On demand business models that bring production close to customers and are zero emission will begin to hold sway. #NetZeroShift #circulareconomy

The best materials, the most efficient manufacturing practices and oodles of carbon capture aren’t enough to undo the damage caused by shipping things around! Which is why the shipping industry needs to decarbonize.

Shipping currently contributes approximately 2-3% of global carbon emissions. Of the 14 trillion dollars spent each year on transportation, over 90% goes on journeys by sea. Carbon emissions could soon become a major criteria for trade deals and negotiations – impacting world trade.

The world’s largest container shipping line A.P. Moller-Maersk A/S has called for a $150-a-ton carbon tax on shipping fuel that would drive up the costs for an industry that delivers 80% of world trade. A.P. Moller-Maersk A/S says such a levy would help bridge the price gap between fossil fuels that vessels consume today and greener alternatives that are currently much more expensive. Fuel costs would effectively almost double if the measure were imposed today because of how carbon dioxide emissions are counted. Maersk’s call is in part a response to changing business behaviors. Almost half of the company’s top 200 customers have set targets to eliminate carbon dioxide emissions.

From a consumer perspective, being able to access reliable data about the carbon emissions on shipping could drive real change: Especially in things like food, where the carbon footprint of growing certain types of foods is large and in addition, shipping it across the world further adds to emissions. Locally grown, sustainably marketed products and brands will emerge when the costs of shipping ramp up. The challenge though, will be around managing customers, who are now used to buying food from all across the world. Further, companies are talking about radical transparency. The challenge of transparency is the supply of too much information.
If each one of us knew the carbon impact of everything we bought, from our clothes, to our car, to the food we eat, we could use that to inform our choices. Stock values, press, brand reputation, and bottom-line revenues will all be susceptible to this change.

Steel, is critical to the wind turbines, solar panels and electricity pylons needed to displace fossil fuels. At the same time the steel industry is a huge emitter of CO2. It is reliant on burning billions of tons of coal, with the industry emitting more carbon dioxide than cars, buses and motorbikes combined.

Nucor is a leading North American producer of merchant bar & rebar, engineered bar, structural steel, carbon steel plate, and sheet steel products and technologies thanks to an ongoing commitment to innovation.

Econiq™? is the world’s first net-zero carbon steel at scale, introduced to offer steel consumers emissions-free steel products to help meet their sustainability goals. The Econiq certification will cover all of Nucor’s steelmaking product line, the most comprehensive in the U.S. market.

By introducing Econiq, Nucor is providing confidence for steel consumers to know they are purchasing the lowest greenhouse gas (GHG) emissions steel product available. A first of its kind at scale for the United States steel industry, Econiq will be available across Nucor’s steelmaking product lines, the broadest and most diversified offerings in the U.S. market. General Motors, will be Nucor’s first customer for Econiq beginning in the first quarter of 2022.

Nucor has been working on reducing emissions for some time now. In 2020, it was the 7th largest corporate buyer of renewable electricity in the U.S. through Virtual Power Purchase Agreements. Econiq is made using 100% renewable electricity (Scope 2), with Scope 1 emissions eliminated through the purchase of carbon offsets. The company is currently evaluating how to remove Scope 3 emissions.

The retailer has announced a strengthening in the environmental standards required by its 14,000 fresh produce growers, by implementing the LEAF Marque environmental assurance scheme across its entire global produce supply chain.

Tesco will ensure all UK growers are certified by the end of 2022 and will begin the process of certifying the rest of its global grower base from 2023, with the aim of completing the transformation by 2025. The scale of the roll-out is unprecedented among LEAF’s existing supply base.

The LEAF Marque, run by global farming organisation LEAF (Linking Environment And Farming), requires farms to take a whole business approach to delivering more sustainable, climate positive farming through:

• Resilient and diverse businesses
• Increased imple­men­ta­tion of regen­er­a­tive practices
• Improved pos­i­tive action for cli­mate change through energy efficiency and reduced car­bon footprints
• Improved soil man­age­ment to enhance soil qual­i­ty and soil health
• Improved imple­men­ta­tion of effec­tiveIPM solu­tions for crop health and protection
• Cir­cu­lar approaches to resource use and waste management
• Improved man­age­ment of water use and water quality
• Enriched diver­si­ty of native habi­tats and species

Tesco has reduced the materials used each year in its packaging by more than 2000 tonnes and recently launched reusable packaging service Loop in ten stores and new soft plastic recycling facilities across all large stores. Tesco and Faerch have developed a closed loop recycling solution that ensures the secondary plastic packaging used to transport and hold products on Tesco shelves is retained by the food packaging industry and recycled back into new food contact primary packaging.

Until recently, PET shelf ready packaging – widely used by UK supermarkets to transport products – was used once and downcycled into non-food applications. Now, through a new ‘tray to tray’ initiative, Tesco’s secondary PET will be collected by Faerch and through their advanced recycling process used to make new, food contact PET pots, tubs and trays.

Packaging for Tesco’s own brand cut fruit, selected yoghurts and meat will be guaranteed to contain 30% rPET that originated in Tesco stores. To achieve this, Tesco will require all its own brand and branded suppliers to use food contact approved PET for shelf ready packaging.

Spice giant McCormick & Company has partnered with the International Finance Corporation (IFC) and Citi to provide its herbs and spices suppliers with financial incentives linked to improvements in measures of social and environmental sustainability. The program has started with suppliers in Indonesia and Vietnam, and will soon be launched in other countries.

Under the initiative, suppliers can qualify for discounted rates on short-term working capital financing when they meet sustainability standards accepted by McCormick. Those standards include performance on labour conditions, health & safety practices, crop management, environmental impact, farmer resilience and women’s empowerment. The higher the supplier’s performance level in meeting these standards, the more they save.

The unique partnership leverages Citi’s global Supplier Finance platform and is part of IFC’s Global Trade Supplier Finance (GTSF) program – a $500 million multicurrency investment and advisory program established in 2010. GTSF provides short-term financing to small and midsized suppliers in emerging markets selling to large domestic buyers or exporting to international buyers, by discounting invoices once they are approved by the buyer. The financing rates can be linked to sustainability measures to minimize impacts on the environment and promote climate-resilient agriculture practices, while connecting smallholders to global markets.

This is why cleaning up our oceans and preventing flooding in cities has a common solution. Which is to clean up our rivers.

Finding new ways to address our environmental challenges is reliant on our ability to foster innovation to find ways of driving systemic change. To support such innovation and progress towards circularity, Huhtamaki, a global provider of sustainable packaging solutions for consumers, donated €600,000 to fund the development and piloting of a river waste collector, invented by the Finnish cleantech start-up RiverRecycle.

The collector is an integral part of RiverRecycle’s solution to solve marine waste, one of the biggest global challenges of today. With Huhtamaki’s CSR support, a prototype waste collector was built and tested in Finland. This was then transported to and assembled in Mumbai, where it is now operational and where it will be collecting waste from the Mithi River for the next 12 months.

The Mithi River project is run by a global partnership between UNTIL (now known as UN Global Pulse), VTT Technical Research Centre of Finland Ltd, RiverRecycle and Earth5R, an India-based citizen-led environmental movement.

When we speak of success, it invariably means scale because scale brings lower costs and higher profit.
Scalability is about capacity and capability. When a business needs to grow, companies first build internal capacity to handle scale i.e. if you want to increase your retail business, you create more warehousing space, increase the channels of reaching your customers and look at sourcing more products. Next, the company needs to build capability i.e. help your people handle a larger, complex operation by giving them necessary training and tools such as software that can manage inventory and sales and hardware to support it. Technology makes it easier and less expensive to scale a business. You can gain huge economies of scale and more throughput, with less labour, if you invest wisely in technology. Scaling a business means setting the stage to enable and support growth in your company.

• Scaling #ESG isn’t quite as simple.
• ESG isn’t a single process
• ESG isn’t a technology
• ESG isn’t a campaign

So when someone in leadership at a board meeting says, “How do we scale this?” Ask them, “How?”.
While you can certainly scale initiatives like managing waste, building circularity in products and managing water, ESG is much more.

ESG is about transformative change at the core of your company’s products and services, how the business runs, how it interacts with customers, technology and suppliers and how the business accounts for the impacts on the environment. However the two constructs of capacity and capability are still very important, albeit in different ways. For ESG related changes to hold sway the organization needs to have the capacity to change and capable leadership to enable it. These can be enabled through experience journeys.

Companies don’t change because top leadership wants it, they change because people believe that the change will make things better. Hence with the end goal in mind organizations need to create customer journeys, employee journeys and supplier journeys for the #ESG #NetZero Shift.

INVEST vs DIVEST

Money goes where it gets the highest return, the markets function on that premise. Equities and bonds are priced keeping in mind the risk potential. The risk premium for green investing vs others will decide whether an investment needs to be made or not. India needs over USD 400 billion in capital investment which could save over 100 GW of energy and 1.1 billion tonne of greenhouse gasses between 2015 and 2030,

PURPOSE

Corporate disclosures on their own or brand purpose wont reduce emissions unless business models change.

FUNDAMENTAL RESEARCH

51 billion tonnes of CO2 needs to be removed from the atmosphere. It won’t happen without reliable access to clean energy, sustainable aviation fuel, green steel and cement or a substitute material. Companies in fundamental research will move the needle for a NetZero world.
Brand purpose is a statement of intent, corporate disclosures are about what you did in the past year, innovation is about how you are designing the world. In the past few decades we designed products because we could and created campaigns that propagated a genuine or manufactured need. Now we need to design products and innovations because of the existential crisis we find ourselves in.

STEADY + SCALABLE

Changing the way we make things and grow things is not a quick software fix. It requires change at a fundamental level and reliability so that it can be scaled up. The speed of the digital economy may not be replicable when it comes to fundamental research. However digital can certainly speed things up once the fundamentals are clear.
“The digital economy has fooled us in terms of how quickly things can change, because you don’t need the reliability and scale, and therefore the capital and the regulations.” Bill Gates

CARBON PRICE

Why does a Rs 1 plastic pen exist? Why do we have Rs 100 polyester t shirts? – The price of both these products doesn’t account for the polluting impact they will ultimately have. Unless we account for the cost of carbon, we will continue to do business as usual. #climatechange #circulareconomy.

Methane emissions occur at gas wells, pipelines, refineries, and power plants, but also landfills and cattle fields. While they dissipate faster than carbon dioxide, they have a greater proportional impact on global warming.

Efforts to mitigate (reduce) CH4 and CO2 emissions are complicated by inconsistencies between estimates derived from atmospheric measurements, greenhouse gas inventories, and self-reporting programs. Contributing to these discrepancies are a relatively small number of industrial facilities that emit anomalously high amounts of greenhouse gases, often in an unpredictable and intermittent fashion. Multiple research studies by many teams have provided compelling evidence of “heavy-tail” distributions in CH4 emissions in most economic sectors. In other words, a small fraction of equipment within a region can contribute disproportionately to the region’s total emissions.

@Carbon Mapper, is launching two new satellites that will track these emissions from orbit. Governments around the world have been working to put in place standards to reduce methane leaks and meet climate goals, but it is difficult to move what you can’t measure. That’s where Carbon Mapper comes in-it will crunch satellite data to produce usable insight for regulators, industries, and the public at large.

The Carbon Mapper project demonstrates new models for government to work with private companies and achieve their goals in space. The effort is a unique public-private partnership between several non-profits, the state of California, the US national Jet Propulsion Laboratory, and two universities.