Friday, 21 December 2012

Whoops (no) apocalypse

Despite the warnings of the doom-mongers, the end of the Mayan calendar didn't bring about the end of the World on 21st December 2012. So now what? Life goes on as usual, no doubt. But while the end of the World may not be imminent, we seem determined to live our lives as if there was no tomorrow.

We consume as though resources are limitless, burn fossil fuels without consideration of their effect on the climate and relentlessly pursue material wealth as if it was the only measure of a life well lived. And yet we know that our planet is finite and that nobody dies wishing they had spent more time at work or bought more stuff. We're supposedly Earth's most intelligent life-form, and yet to observe us objectively one would have to conclude that we had a collective death-wish.

Some academics put a different interpretation on the fact that the Mayan calendar ran out on this day - they posit that the end of the calendar marks the start of a new age of enlightenment. Sadly, that interpretation doesn't seem to be any more accurate. It seems increasingly inevitable that the human race will ultimately bring about its own downfall by undermining the ability of future generations to meet their needs.

So as we celebrate the face that the World didn't end today, let's try to start living as if we intended to stay here.

(My thanks to @penny_walker_sd for the tweet that sparked this train of thought)

Tuesday, 18 September 2012

The Great Recovery versus the death of hardware

Yesterday saw the launch of The Great Recovery, a joint venture project between the Royal Society of Arts and the Technology Strategy Board to promote the role of design in accelerating the transition towards a circular economy. Designers came armed with examples of super-easy to recycle circuit boards that can be disassembled simply by immersing them in warm water and alarming statistics about the amount of e-waste we ship back to China which already controls many of the resources needed to make it.

To me, the role of design in promoting resource-efficiency is obvious – if we design products to both consume fewer resources and make the materials easier to recover at the end of the product’s life, then sustainability becomes systemic and the circular economy is a natural consequence. And yet a totally different design philosophy is being adopted in the far east, where the electronics industry is engaged in a race to the bottom.

Many of our most prestigious technology brands have become massively wealthy by outsourcing manufacturing to China and Korea where labour is cheap and policymakers less interested in workers’ rights. Their focus is on building the products as cheaply as possible so that they can boost their profit margin to the maximum their brand value can justify. Innovations like design for recyclability have no place in this business model – anything that adds cost is ruthlessly excised in the drive to minimise production cost and maximise revenue. As a result, those countries have developed a high level of expertise in low-cost manufacturing of electronic goods that is now becoming a serious competitive threat to the vendors that instigated it.

One blogger visiting China this summer was shaken to find that even for a one-off purchase, with no haggling, he could acquire a perfectly reasonable tablet running Android Ice Cream Sandwich – with wifi, a camera and all the appropriate trimmings – for just $45. Little wonder, then, that he was moved to conclude that hardware is dead. It’s impossible to make a profit on hardware alone when it becomes so commoditised; the only way to make money is to sell something else and convince consumers to pay for the whole experience of which hardware is only a constituent part.

The implications of this for product designers are profound, because every designer works to a brief and clients have to ensure that their products or services are commercially viable. Given a situation where one country both controls many of the raw materials and has perfected the art of manufacturing a product for a price nobody can beat, it’s just possible that China’s domination of the electronics industry could become absolute. Meanwhile, technology vendors face some tough challenges and a catch-22 situation: reducing reliance on rare earths requires innovation in product design, which is hard to fund when the country that dominates the supply of those rare earths is driving price erosion that reduces margins to levels which mitigate against investment in R&D.

Despite this observation, I remain optimistic about the ability of the design community to propel us towards a circular economy. It certainly has the creativity and passion for the challenge. But vendors will have to adopt a long-term view that properly values the risks associated with strategic materials and resource scarcity, and be brave enough to make investments in design innovation that may take many years to pay back.

Tuesday, 11 September 2012

The ethics of conservation

A report published today lists, for the first time, the 100 species at the greatest risk of extinction, prompting a discussion on BBC Radio 4 this morning about whether or not species that offer no apparent benefit to mankind should be saved. If resources for conservation are limited, how should we prioritise? Is it right to focus on those plants and animals that have a positive influence on humankind, or does every living thing - including perhaps those that pose an actual threat, such as the malarial mosquito - deserve an equal chance of life?

The dilemma is challenging enough when applied only to animals and plants, but the choices we make could set a dangerous precedent for a resource-constrained future. Fast forward 50 years, to a population in excess of 10 billion trying to survive on a planet that can't produce enough food and water to nourish everybody. In a perfect world, we would adopt a collective approach that shares the Earth's resources equally among all its people. But humanity's record doesn't support such an optimistic outcome.

If we're prepared to let another species die out because it's not sufficiently useful to our particular species, can humanity be trusted not to do the same thing to a country or an ethnic group that doesn't contribute sufficiently to the economy of a resource-impoverished world?

Monday, 13 August 2012

The real Olympic legacy

Well, we did it. And what a boost to our collective confidence it has been to host an Olympic Games which managed to be at the same time both slick and idiosyncratic, both competitive and inclusive. The closing ceremony may have lacked the scale and the sentiment of the opening ceremony, but one moment last night seemed to encapsulate the spirit of London 2012 - the signing singers and their performance of Imagine. Never have Lennon's lyrics seemed more poignant, as the athletes gathered to celebrate the end of an event that embodied so many of the song's aspirations.

Over the last couple of weeks, we have welcomed athletes regardless of their nation, colour or creed in a show of global solidarity that celebrated their hard work, dedication and, in many events, their team spirit. Every one of the athletes was a positive role model, and every one was accorded the respect that he or she deserved. I couldn't help wondering whether the world would be a better, safer and happier place if it was governed by athletics coaches rather than politicians.

Perhaps it won't encourage our youngsters to get off their sofa and into their trainers, but inspiring a generation - as London 2012 set out to do - is not just about sport. Of course, the athletes' achievements are remarkable - but they weren't the only stars of the show. The volunteers who both delivered Danny Boyle's vision for the opening ceremony and acted as "games makers" - welcoming, directing and assisting athletes and spectators - demonstrated an altruism that seems to have been elusive in recent times.

So my hope for the Olympic legacy is that we hold on to those values that really made London 2012 an event of which we can be rightly proud: confidence, tolerance, respect and altruism. London in August 2012 seems a million miles from London in August 2011.

Wednesday, 8 August 2012

The ethics of employing prisoners

A solar energy company has come under fire for employing inmates from Prescoed open prison in its call centre in Wales. The scheme has attracted cricisim for two main reasons: the company pays the prisoners just £3 per day and it has also fired a significant number of workers since appointing the prisoners, inviting speculation that they were laid off to be replaced by cheap labour - an accusation the company has denied.

This issue may not be as clear cut as it first appears. On a recent Business Leaders tour, organised by the excellent Connect Reading, I heard how hard it is for former prisoners to find a job, which in turn leads to a higher risk of re-offending. So, in theory, anything that provides practical work experience and the opportunity to demonstrate that offenders can perform to the same standard as other workers should be a good thing. Is bussing prisoners into workplaces materially different to the kind of in-house programme run by Gordon Ramsay Behind Bars? Perhaps not - but for me, the core issue lies in the way prisoners are remunerated.

Just like offshoring jobs to developing countries, I feel that taking advantage of the opportunity to pay prisoners far less than the legal minimum wage is unacceptable. Especially in times of economic crisis, UK companies have a moral obligation to support their home labour force and invest in the domestic economy. Equally, I have some sympathy with the argument that work experience can help ex-offenders become productive and law-abiding members of society. So how to ensure that cheap prisoner labour doesn't erode the job prospects of regular workers?

One control already in place is a quota system - no more than 20% of a company's staff can be drawn from the prison community. But the fact that an upper limit is needed just seems to reinforce the notion that the main appeal to employers lies in the low cost of prisoner labour. So, what if the minimum wage legislation was applied to prisoners? While it might not be appropriate for those serving sentences to take home the same wage as a non-offender, the difference between what the employer pays and what the prisoner can keep could be contributed to a victim support fund.

This seems to me quite an elegant solution - it avoids the prison population becoming a source of cheap labour and it is likely to appeal to an entirely different segment of the business community. It moves the emphasis right away from low-cost labour and towards prisoner rehabilitation and it introduces a new element of social contribution - something that could sit quite comfortably with the CSR agenda of an ethical business.

Justice Secretary Kenneth Clarke has declared an intention to double the number of prisoners working full time, but this is apparently the first time that prisoners have been allowed to work outside prison premises. Now that the precedent has been set, it's important to ensure that prisoner outworking is put on a proper footing.

Thursday, 19 July 2012

From Products to Performance

At a recent Aldersgate Group panel session on the Circular Economy, hosted at BASE London,
Douwe Jan Joustra, Managing Partner of One Planet Architecture Institute, argued that “we do not have an energy problem”. The world has plenty of energy and nature has functioned for three billion years on solar-based energy systems, so “we have an intelligence problem that we are not able to get our energy systems up and running [and] solar based.”
Mr Joustra argued that instead of energy, the planet should focus on finite resources, given that “we will never get any new materials on this earth”, so shifting the economic system from a linear model to a circular one is paramount. The circular economy offers the opportunity for “a real systems innovation”. For example by changing the focus from product ownership to paying for performance: “do you want all the chemistry that you have in a television set or do you want to see the news?” In a circular economy, customers will pay for the service of a product, rather than the product itself.

This type of business model is not so controversial - it has been commonplace in some markets for decades. But the trick lies in converting more businesses to a performance-based model - and perhaps reviving it in some markets where it has fallen from favour. Just a few decades ago, it was almost unheard-of for a household to own a TV - all but the very wealthy rented them. Yet now, I can't think of a single businesses that routinely rents brown goods and most consumers don't even consider it. Outright purchase has become the norm, and if the purchase price is more than they can afford all at once, consumers sign a finance agreement or put it on their credit card. In fact, easy access to credit has done more to fuel consumerism than any other single innovation. Even the current economic conditions haven't changed our relationship with credit all that much.

There are some industries where the performance-based model is gaining ground - managed print or managed document services is one. Increasingly, companies are not buying printers and copiers but instead entering into a contract for the consumption of print and copies with a supplier that retains title the equipment which it maintains and manages for an agreed contract period. There is a good business case for this; it removes risk, offers tax advantages and provides management information on consumption which in turn can help to reduce print volumes, cutting both cost and environmental impact. Yet the attempt of Interface to introduce a similar service for office carpet - with equally compelling financial and environmental benefits - finally had to be abandoned because customers were not prepared to do anything other than purchase carpet outright.

As the saying goes, we can't solve our problems using the same level of thinking that created them. The concept of the Circular Economy provides opportunities to rethink business models, revisit ideas that were successful in the past and transfer business models from one market to another. And it starts with reframing the question "what do I want to buy?" as "what do I want to achieve?"

Wednesday, 11 July 2012

EPEAT exit bites back at Apple

Only yesterday, it was reported that Apple had withdrawn from the EPEAT eco-label, apparently because it didn't want to comply with the design for disassembly criteria in the EPEAT standard. It's gratifying to see how quickly that decision has begun to influence procurement decisions. Today, the city of San Francisco has dropped Apple as a supplier.

Environmental standards play a valuable role by excluding the worst performers and rewarding best practice. If public bodies pledge to buy only products that meet a credible standard, it encourages suppliers to manufacture to that standard in order to secure their share of a massive revenue opportunity. That in turn makes more environmentally preferable products readily available to private consumers and businesses. Their combined purchasing power makes public procurers a powerful agent for change - they have more influence over suppliers than any other single vertical market.

Apple makes aesthetically beautiful products that offer an excellent user experience, but its business model relies on exploitative offshore manufacturing, massive margins and forced upgrades. Its products are designed to minimise manufacturing costs to the bone and discourage repair. It may think that its massive brand equity and fierce customer loyalty puts it above the influence of policymakers and standards bodies, but enough organisations follow San Francisco's lead it may be forced to reassess its strategy. This could actually mark a tipping point in the ability of eco-labels to set product norms.

Monday, 9 July 2012

Fairtrade - like charity - should begin at home

I have been pondering the implications of the spat between the British dairy farmers and the supermarkets. For those who missed it, on BBC Radio 4's Today programme last week a spokesman for dairy farmers claimed that three of the large supermarkets have driven down they price they pay for milk to the point where it's no longer possible for the farmers to make a profit. Note that not all supermarkets are implicated: Tesco, Sainsburys and Waitrose are apparently playing fair. But there's more than a little irony - and perhaps even a smattering of double standards - in the list of those named and shamed.

Morrisons was not a big surprise - it has a price-led brand strategy and makes no particular claims of leadership on either the environment or ethics. Asda is equally price-conscious, but given that its name is a contraction of Associated Diaries and it was originally farmer-owned, might be expected to defend farmers' interests. However, it's now wholly owned by Wal-Mart and the name is the only remnant of its heritage. Wal-Mart does make strong claims for its supply chain ethics. The big surprise for me was Co-op - with its strong and long-standing emphasis on fairtrade, I would have expected a fair deal for its suppliers at home as well as overseas.

Co-op has responded to the criticism with a commitment to increase the price paid to dairy famers from 1st August - a commendable move that is consistent with its brand values. It has also emphasised the other ways in which it supports farmers, like contributing to veterinary costs and funding efficiency and carbon reduction programmes. Morrisons has defended its milk pricing model and plans to stand by it, and Asda has remained silent.

Judging by the comments under The Grocer's story on this issue, many consumers intend to vote with their feet, switching their entire supermarket shop to stores whose policies they view as fairer. As a vital component of most people's diets, milk seems to have become the new yardstick used to judge price competitiveness in these economically-constrained times. But we shouldn't forget that livelihoods depend on the fair treatment of suppliers - perhaps the gross profit made by supermarkets is a more equitable metric for demonstrating the value for money they offer?

Tuesday, 3 July 2012

The paperless office?

I’m no apologist for the pro-paper lobby – as with most things, thoughtful use and moderation would be my recommendation – but I had to chuckle at these brief videos published by PaperBecause. While their intention is to ridicule the concept of a fully paperless office, they do provoke thought and discussion about how we can manage without paper and how reluctant staff might be to reduce their consumption. Too many employee engagement tools fail because they lack humour – that’s certainly not an accusation that could be applied here!

Have a look and make up your own mind – do you think you could use them in your organisation, or do they miss the mark?

New eCat from the EC

A new system has been introduced by The European Commission to replace its Green Store catalogue. The new Ecolabel Catalogue - "Ecat" for short - allows any consumer or business to search for sustainable products. The UK now has the third highest number of Ecolabel products licensed in the EU, so it should be relatively easy to find a domestic supplier. You can find Ecat here:

Thursday, 21 June 2012

Not paperless, but paper-less

Toshiba seems to have caused something of a furore with its announcement of a "National No-Print Day". Unsurprisingly the paper industry is particularly exercised about it, with campaigns from both the pro-paper lobby Two Sides and the Printing Industries of America trade assocation which is calling for a "No Toshiba" day. As with so many sustainability decisions, paper vs. electronic media is not an easy call and the right course of action is probably a compromise.

As pro-paper campaigns point out, timber for paper is a renewable resource and plantations assist with CO2 balance. Paper's carbon footprint peaks once it has been printed, whereas a digital document creates fresh emissions every time you read it due to the energy consumed by your computer or e-reader. PIA offers some compelling statistics about the relative impacts of paper and electronic media.

We need to re-think the way we engage with documents, and use different media depending on the expected life of the content. For information that is likely to be read once and not referred to again a digital medium is probably better - it's certainly not eco-efficient to print out emails to read them, for example. Even a document which has to be archived could originate and remain in digital form unless it is likely to be referred to frequently. But printed documents are perfect for pass-on readership or for material that is intended to be read and re-read. Libraries, although in decline, are an elegant way of ensuring that we gain maximum value from the resources used in making books, and the most serious flaw of e-readers is that they prevent us from lending titles to others.

The issue of document design and production is also key. Better use of typography and layout can reduce the number of sheets needed to produce a printed document and of course it should always be printed double-sided. Paper weight, inclusion of recycled content and use of images all have a part to play in controlling the environmental impact of printed material. And we mustn't lose sight of the fact that manufacturing paper doesn't just consume trees, it also uses water, chemicals, oil and energy - and those resources are still consumed to make recycled paper. Recycling paper is important, but not as critical as making sure we don't print unneccessarily.

In my view, a No-Print Day is no bad thing as a means of drawing attention to the need to be mindful about printing, and the pro-paper and pro-printing organisations may be over-reacting. Like Earth Hour, Buy Nothing Day and so many other events the value is in making people think twice about habitual behaviours which may no longer be appropriate in a resource-constrained world.

Tuesday, 19 June 2012

Cradle to cradle paper

An innovative project by Banner Business Supplies closes the loop on office paper by supplying copier paper manufactured from a customer's own waste paper. Banner collects waste paper from the office (both confidential and general waste), securely shreds and de-inks it and transforms it back into blank paper for delivery back to the office it came from.

According to Banner, Closed Loop Paper uses 50% less water, 60% less energy causes 70% less air pollution than virgin paper. The process uses no bleach and the manufacturing process is fully audited. It's an impressive service - but it does depend on the customer having sufficient volume of waste paper to make the process viable. Closed Loop Paper was developed in response to demand from HMRC and currently processes around 25,000 tonnes per year.

As more organisations try to reduce their reliance on hard copy, I can foresee issues caused by the declining supplies of paper from single customers. But this concept would work really well across a whole business park or even a town or city, creating local employment opportunities as well as reducing transport impacts by recycling paper as close as possible to where the waste originates.

Friday, 8 June 2012

Why we need to stop talking about climate change

Today's scariest headline screams "The World as We Know It Is About to End, Say Some Really Frightened Scientists". Alarmist, perhaps - but it hasn't drawn the fire of the climate change deniers to anything like the extent we are used to. That may be because the study that prompted it was compiled by biologists, not climate scientists. Thanks to its focus on fossil fuels, the issue of climate change has become highly contentious, with the ranks of the oil industry and others mobilised - and well funded - to defend their livelihoods. And because it relies on projections that have no precedent, the theory of anthropomorphic global warming is vulnerable.

More robust, however, is the theory of carrying capacity. There are numerous, well-documented examples of both animal and human populations that have collapsed because they outstripped the carrying capacity of a bounded environment. We only have one planet, and no immediate prospect of colonising another. Therefore it follows with chilling logic that if our population - and its rate of consumption of finite resources - continues to increase there will come a point where there are no longer sufficient resources to sustain it.

Even for those who buy in to the science, climate change is a difficult concept to engage with. But every household already has to embrace the concept of living within its particular limits and every business has to balance the books. Economic sustainability is a good proxy for environmental sustainability and thanks to the economic crisis we're all too familiar with what happens when we live beyond our means financially. Transpose that understanding and we may just have a chance of  securing the future of humanity.

Friday, 1 June 2012

Leveraging the learning from awards

In many ways, awards can be somewhat arbitrary affairs. It's disingenuous to claim that they acknowledge the true leaders; in truth they reward only the best of those who firstly decided to enter and secondly have the skills to write a compelling submission. But they still provide a useful barometer of the innovation that is ocurring around an issue or industry sector, and their real value lies in encouraging the upstarts and showcasing best practice from which others can learn.

The Guardian Sustainable Business Awards has made this explicit with the launch of its Best Practice Exchange, where the shortlisted entries have just been published. These awards, although only in their second year, have quickly gained credibility based partly on the reputation of Guardian Sustainable Business and partly on their meticulous judging process. In fact, the judging and subsequent ceremony involved so many sustainability leaders that host Jo Confino was unsure whether it was prudent for them all to assemble in the same venue.

For those who strive for continuous improvement in sustainability, the Best Practice Exchange provides an opportunity to benchmark against the achievements of their peers and to hear the views of some of the standout entrants.

Thursday, 31 May 2012

Bristol's Big Green Week

Aside from the fact that its organisers clearly have no idea how many days there are in a week (!), this looks like an entirely admirable event. Imagine, if you will, 9 days of environment ideas, art and culture - at the very least it's an appealing antidote to the hand-wringing and doom-mongering that surrounds Rio+20. Bristol's Big Green Week is the UK's first ever international festival devoted to inspiring and empowering people to act on sustainability. Its action packed programme includes lectures, markets, parties, playgrounds, performances, debates, films, acts of worship, workshops and interactive exhibits - something for everyone, in fact. It even has a fringe.

Just one word of caution - there's so much going on that if you print the entire 7.5MB, 25 page pdf file of the programme you'll consume the equivalent of a reasonably-sized seedling, so save it or download the handy app. Go, enjoy and be the change you want to see!

Wednesday, 30 May 2012

Ray Anderson - A True Pioneer

At last night's Guardian Sustainable Business Awards, I was delighted to see Ray Anderson of Interface honoured with a posthumous Outstanding Achievement Award. Ray was one of the best-known pioneers of sustainable business and his influence was certainly a factor in getting sustainability onto corporate agendas. So what made him so successful? In the citation, reference was made to Ray's charm, courage and truthfulness, but accepting the award on his behalf Interface's John Bradford added a fourth vital ingredient: competitiveness.

There is no doubting Ray's genuine motivation to stop his business robbing future generations of the right to a bright future but in my view what made him so influential was that he understood the power of sustainability for competitive advantage. He knew that by doing right, Interface could also perform better as a business, thereby shifting the focus of the green debate from the sandal wearers to the suits. His book, Confessions of a Radical Industrialist, should be essential reading for all executives. His contribution will not be forgotten.

Wednesday, 16 May 2012

Down to Zero

Today The Prince of Wales’s UK Corporate Leaders Group on Climate Change (UK CLG) launched a new initiative in partnership with BIS. Called Down to Zero, the project champions Joint Public Private Low Carbon Procurement Compacts as a way of forcing the pace of transition to a low carbon economy.

Initially, the project has been restricted to three specific areas: transport, biomethane for heat and power, and catering. But the aim of the initiative is to convince potential suppliers that there is demand for low carbon goods and services and to provide a blueprint for a new model of collaborative procurement that can be applied to progressively reduce carbon emissions.

According to Vince Cable, Secretary of State for Business, Innovation and Skills, the project addresses a paradox that is holding back the commercialisation of low-carbon technologies: because low-carbon products and services are not available – or not available at realistic cost, - customers don’t specify them. And because there is no apparent demand, suppliers don’t invest in low-carbon innovation.

This may well be the case, and UK CLG is right to address it, but it’s by no means the whole problem. Sophisticated technologies often carry a higher price tag but pay back quickly by consuming less, requiring less maintenance or increasing productivity. Until public sector procurement professionals are measured and rewarded on cost and carbon savings across the product lifecycle, instead of cost savings at the point of purchase, they will continue to buy the products with the lowest capital cost. And this puts at a disadvantage the innovative suppliers that invest in the development of low-carbon solutions and need to recover that investment. The e-auctions used for the final stage of the tender process perpetuate this problem and it's hard to see how lifecycle costs could be integrated. 

The Down to Zero project will fail if it doesn’t also embed the concept of whole life costing, factoring both direct and indirect lifecycle costs into the procurement process right up to the point the contract is awarded.

Monday, 7 May 2012

A good week to go green?

Looks like the 2nd week in May could be the best week of the year to begin the process of greening your business. Three great initiatives coincide today, here's how you can find out more about them:

Green Office Week - now in its 4th year, Green Office Week is the brainchild of Avery labels and offers fun and simple ideas to make your office greener, based on a different theme for each working day. You can find out more at

Walk to Work Week - does what it says on the tin! Living Streets, Walk to Work Week encourages people to get to work on foot, and is part of the month-long Great British Walking Challenge.

7 Days to Sustainability - a free programme from Planet Positive, 7 Days to Sustainability is designed to help SMEs green their business and doesn't just apply to this particular week although it was launched today.

Campaigns like these can provide a great kick-start to organisations that are just starting out on their sustainability journey, and they also provide a boost for those for those who have programmes in place by offering free tools and resources that can help with employee engagement. Kudos to all three organisations involved.

Monday, 6 February 2012

A new direction for the Prince's Mayday Network

Business in the Community set up The Prince's Mayday Network in 2007, calling upon UK companies to embark on the journey to a more sustainable future. The network now has over 3,800 members. What started as a journey encouraging and supporting companies to measure and reduce environmental impacts, has begun to look at the transformational change required of companies to secure a truly sustainable future. For the next stage of the journey they will work with other Business in the Community campaigns to compel UK business to transform itself to meet the UK contribution to the '9 billion challenge'.

You can find more details here:

Tuesday, 31 January 2012

Does forgoing bonuses really serve taxpayers' interests?

I can't help thinking that the furore over the bonus awarded to Stephen Hester, Royal Bank of Scotland chief executive, rather misses the point. Bowing to mounting pressure from many sectors of society, he finally agreed on Sunday night that he would not pick up the almost £1m of shares to which his contract entitled him. His chairman, Sir Philip Hampton, had previously waived his own bonus, no doubt adding to the pressure on Mr Hester.

It's clear that the bonus culture in the banking sector has spiralled out of control, leading to remuneration schemes that are ludicrously high. But that is the state of the industry, and one token gesture won't change it. Singling out RBS as an institution largely under state ownership only risks damaging its ability to compete for the brightest and best business brains to steer it back to prosperity and repay the investment UK taxpayers made to bail it out.

Mr Hester's bonus - like Sir Philip's - is payable in shares, whose value will be directly affected by the way  they manage the business. With the bonus in place, top executives would benefit directly and personally from rebuilding the share price so that the return to taxpayers is maximised. How then are the taxpayers served by declining the bonus? And if he's tempted away by the riches offered by non-government backed institutions, how will RBS attract a talented replacement?

Such ad hoc measures won't achieve the fundamental change required to rebalance the way we reward our bankers and they could seriously endanger the recovery of RBS.

Tuesday, 24 January 2012

Why Wasteful Design still Dominates, Despite Alternatives

Of all the innovations of the computer age, the laser printer is probably the most inherently wasteful. This ubiquitous device is the product of a business model that seeks to maximise long-term revenue from the sale of premium priced consumables – often referred to as a “razor and blade” model.

It doesn’t have to be this way. There’s no technological reason for all that is mechanically clever about the device to be contained in a disposable cartridge; it’s a commercially-driven decision. But the need to justify the price premium charged for the cartridges has resulted in a complex product design that builds in redundancy.

A cartridge refurbishment industry has grown up to take advantage of the residual value in used toner cartridges, but it admits to only being able to return to the market 20-30% of the cartridges sold each year. And cartridges can’t be refurbished indefinitely: their components are not designed for extended use so print quality and reliability can be compromised. In the UK alone, it’s estimated that 47 million laser cartridges go to landfill every year, taking many thousands of tonnes of plastics and metals out of the economy.

As far back as 1992, Kyocera developed a very different proposition: long-life components that would last for 300,000 pages, resulting in a printer that was effectively cartridge-free. Not surprisingly, this resource-efficient approach also resulted in significantly lower running costs, too. In a world increasingly sensitised to resource scarcity, you might have expected this to become the dominant technology. But more than 90% of laser printers are still cartridge-based.

Kyocera has to work hard to erode the market domination of the conventional printer vendors for a number of reasons. The disappointing fact is, that for all the rhetoric about best value and sustainable procurement, most buying decisions – especially in public sector – are still determined by the initial price. Green credentials and low cost of ownership will get you on the shortlist, but the final decision usually comes down to who is prepared to discount the upfront cost by the largest percentage – and, in the printer industry, that favours the conventional vendors who know they can make up any loss on the hardware through a lifetime of revenue from cartridges.

This approach makes it difficult to gain acceptance for a more resource-efficient solution that might cost a little more up front, but will more than compensate in terms of reduced operating costs. And the challenge is further compounded by the division of budget responsibility in most organisations; different people hold responsibility for hardware, consumables and energy, so the full use-phase costs are rarely fully understood, let alone emissions, waste or resource efficiency.

And finally, the product-centric procurement approach taken by most large organisations, especially in the public sector, makes it difficult to propose innovative service-based solutions. If a vendor receives a tender for 500 devices of a certain size and speed then they have to respond on that basis, even if they know that by supplying a managed print services instead of just shipping hardware they could deliver a solution that would not only be more resource efficient but also cost less over the life of the contract. And given the scale of the current economic challenge, that’s doubly frustrating.

What I’d like to see is whole life costing – including both direct and indirect operating costs – applied to procurement decisions in place of the ticket price, and tenders written on the basis of the desired outcome – in cost saving or waste reduction – rather than around a product specification. This would encourage more vendors to innovate for resource-efficiency throughout the entire product lifecycle and reward those whose products and services achieve the greatest improvements in resource efficiency.

This post first appeared on The Green Alliance's Green Living blog