The market
The global environmental goods and services (EGS) sector is estimated to reach the astronomical sum of $635 billion in 2010, representing an impressive 45% growth over the past five years. By 2020, it could reach $1 trillion. EGS-related consulting services account for approximately 5% of the total, or $32.7 billion today, ranging from advice on renewable energy, waste reduction, eco-design, carbon trading, and life cycle assessments (LCAs). The market is expected to reach $45 billion by 2015, representing a huge opportunity for employment and entrepreneurship. Currently, the EU, the US, and Japan are estimated to account for 94% of the global market. While British companies appear to hold a strong position among EU players, Scandinavian consultancies are thriving thanks to decades of pioneering environmental policies in their country and a strong demand for technological innovations. French law stipulates that, from 2011, all products sold in France must have an Environmental Product Declaration (EPD), which will boost the revenue of environmental consultancies, particularly those specializing in Life Cycle Assessment (LCA). LCA consulting offers a comprehensive method for calculating environmental impact. This supports purchasing decisions and allows consumers to link environmental outcomes to their purchasing intentions. It is expected that more EU members will pursue the same strategy as France. This will stimulate even stronger growth in the development of consultancies. Companies like ERM, RPS, Environ, and WSP have emerged in the last decade, each boasting over 1,000 experts on staff and dozens of offices worldwide. The UK alone has over 600 environmental consultancy firms, with at least 75 having branches outside the British Isles. The UK—one of the few countries to have compiled detailed statistics on this rapidly growing industry—estimates that in 2009, its firms participated in over 242,000 global contracts, with more than 60% originating outside the UK.
Innovation
The business model for environmental products and services has been limited to containing the negative effects of production and consumption. The standard jargon speaks of mitigation, protection, and reduction. It is necessary to move from "doing less harm" to "doing more good." This is a major breakthrough, because any attempt at preservation is unlikely to regenerate, and any mitigation strategy is unlikely to improve. It is in this context that a new portfolio of environmental services is needed, one that identifies opportunities for innovation by utilizing available resources. When Professor Luigi Bistagnino, Dean of the School of Industrial Design at the Faculty of Architecture of the Politecnico di Torino (Italy), embarked on an undergraduate program to teach eco-design, he refused to adopt the simplistic "steal less" approach. Professor Bistagnino argued that while we never appreciate someone who promises to fly less, we do award environmental prizes to companies that pollute less. The students were very impressed by the logic that flying less equates to polluting less, as both continue to fly and pollute. This approach paves the way for a fundamental shift in industrial design and allows for the emergence of new business models. This simple assessment led Mr. Bistagnino to create a new type of LCA (Life Cycle Assessment), starting with a performance evaluation based on traditional input/output tables that list all the elements needed to produce a product or service and quantify all the results, including waste streams. This is part of a traditional ISO 14000 certification. However, Mr. Bistagnino teaches his students that all outputs left unused must now find an input, thus creating the input/output tables. This provides a creative platform for hundreds of business ideas. As the design students delved into the materials and numbers, they realized that a large amount of valuable waste is simply being wasted. These assessments led to a rethinking of how multi-layered packaging, ball bearings, and even the city's wastewater are managed.
The first cash flow
The first company to benefit from this new type of LCA (Life Cycle Assessment) concerns the use of glass versus plastic. Traditional LCA favors plastic containers because they are lighter, therefore less energy-intensive, and thus generate fewer greenhouse gases. Consequently, plastic packaging for liquids has gained a dominant market share worldwide compared to glass packaging and multi-layer systems. However, following the logic presented at the Politecnico di Torino, glass can be recycled into glass foam, and this construction material eliminates the need for additional insulation, the use of flame retardants, and the application of fungicides and water repellents. The higher energy expenditure for beverage containers is more than offset by the savings in chemicals and construction materials thanks to the multifunctionality of glass foam, which, moreover, requires CO2 in its production process. The situation improves further when the energy needed to froth the glass is supplied by methane from the landfill, where most of the glass is deposited for a fee. This not only changes the conclusions of the LCA, which clearly favors glass over plastic, but also alters the very foundations of the economic model: being paid to use waste, utilizing locally available energy without the need for storage or transportation. This is a completely new competitive model reminiscent of the Blue Economy: use what you have. Unsurprisingly, three successful industrial investments have already been made in this area.
The opportunity
If environmental consulting firms worldwide are willing to move beyond current assessments and strategic advice, then it will be possible to put our production and consumption system on the path to sustainability. Consulting firms can shift from reducing carbon footprints and costs to identifying new opportunities, making high-quality products less expensive, generating multiple revenue streams and benefits beyond the bottom line. While Professor Bistagnino has only a few hundred undergraduate students, a group of two dozen master's students have graduated. By the beginning of 2011, the first doctorates will be awarded, creating a pool of highly qualified consultants capable of designing production systems that are competitive in terms of quality, price, and environmental performance, thereby contributing to social development. It is hoped that by 2020, the first 200,000 contracts will have been awarded, generating thousands of jobs beyond the current landscape of environmental consulting services. These new consulting firms go beyond simply exploiting low labor costs somewhere in the world, pushing the supply chain even further into price concessions, reaching deeper into the developing world for cheap inputs. These ecosystem designers will enable businesses to perform better through the creative use of available resources, inspired by how ecosystems cascade nutrients, materials, and energy.
