Why you should analyse environmental sustainability of the business model upfront – and how /from BioCircular.eu

Why you should analyse environmental sustainability of the business model upfront – and how

Would you start a business without making a business case? – or at least have a very good idea of the business model you are pursuing? – I wouldn’t! Here we look at the potential of using the Business Model Canvas for assessing the environmental sustainability of business ideas.

Today the Business Model Canvas has received quite some traction and is being used in many settings for getting a shared picture of a business concept or to discuss new approaches to the business model.

It is broadly recognised that new businesses should be “sustainable businesses”. Yet, it is very few teams that do an upfront assessment of the environmental sustainability prior to starting their endeavour. Some companies do a Life Cycle Assessment of a key product or product range. However, these evaluations are typically performed after the decision of moving ahead and a production is going on. Usually the findings will not impact the business model fundamentally, but lead to tweaks of a few parameters along the way.

Some of the ”progressive” financial investors have implemented a due diligence process in order to scrutinize the environmental and social impacts of a company before an investment is decided. However, this process is not challenging the business model, but is focusing on minimizing the impact on the environment in the production (emissions, energy consumption, etc.) or ensuring the health and safety of workers.

I am convinced that novel and much more sustainable (also economically) businesses would emerge, if the environmental implications of a business idea were to be taken into account in the planning phase.

What-if you actually considered the environmental sustainability up front and made it an integral part of choosing the right business model?

Sustainability works as a constraint that inspire us to seek creative solutions and can thus be a key driver of innovations. Innovating not only products or services, but also entire business models to create new ways of delivering and capturing value. This can serve as a new basis of competition altogether!

Some ideas would have benefitted from thinking environmental sustainable into the product or service from the start. E.g. the idea of adding micro-plastic beads to cosmetics or toothpaste, that enters the environment when you flush it into the sink. Or, would you design a new e-currency with a distributed accounting system, that requires an enormous amount of energy to run, exceeding that of countries? And that is even before the system has really taken off as a transactional currency, but still is more of an investment in itself.

Where to start if you are not familiar with environmental issues?

In general, the Business Model Canvas (BMC) provides an intuitive framework for developing a business model. It does not take long to grasp the concept and start playing around with the building blocks. If you are a small team, filling in the canvas provides a useful shared picture for discussing ideas. To dig deeper in your analysis or discussion of aspects, you would probably supplement the Business Model Canvas with other tools, such as SWOT or PESTEL understand your business proposition in a business context.

Now is the time for the next steps…

Environmental sustainability tools are still an emerging field, and there is not yet established methods out there to use. Nevertheless, there are some. If you are familiar with the Business Model Canvas – why not try some of the tools that work as add-ons to this? Below I will suggest a few that you could start with.

These tools help you address other bottom lines than the economic; the environmental and the social. It is adding to the complexity of developing the right business model, especially as the costs and benefits are measured in various other metrics than money.  Therefore, the tricky part comes when you need to balance the trade-offs and select the business model to pursue.

When you work with the Business Model Canvas, you should go through iterative loops of increased knowledge before you home in on the business model of your choice. As you refine your concept, you need to utilise other tools. Traditionally you would use Porter’s five forces, 4Ps, etc. to analyse various economic aspects. The method is the same here, but you will need additional tools for exploring the environmental aspects of your options.

The Triple Layer Business Model Canvas (TLBMC) is developed to be a practical tool for developing, visualizing, and communicating sustainable business model innovations. It consists of three canvases. The standard Business Model Canvas for economics, and two additional layers, one for environmental aspects, and the second for social. As with the standard Business Model Canvas, you can begin your exercise using an existing business as a starting point and from there explore possible innovations to the existing model and the potential impact of such innovations. The downside of the TLBMC is that the environmental layer is based on lifecycle assessment thinking and data. Thus, it relies on numbers, which you need to have access to or lookup in order to provide a convincing foundation. You can use it without numbers, but then the TLBMC tool provides no guidance as to how and what to consider.

The Sustainable Business Model Canvas developed by Threebility provides additional cells to the standard Business Model Canvas with guiding questions that make you consider some sustainability aspects. In addition to the extension of the original Business Model Canvas you can find supporting tools that allow you to consider different sustainability aspects of your business in more detail, e.g. the Sustainability Impact Canvas, a Product Ethics Canvas, Sustainability SWOT, and a balanced score card. It is a fine package; however, the tools do not have environmental sustainability in focus, and thus miss out considering environmental aspects in more detail. A key challenge with these tools (as in most sustainability frameworks) is that it is difficult to prioritize or rank the pros and cons that you elucidate through your efforts.

The Flourishing Business Canvas expands the 9 building blocks of the original Business Model Canvas to 16 questions that has a wider perspective on the organisation rephrasing the canvas and embedding it into the societal and environmental scene. The concept seems appealing but it is currently not easy to use as the ‘Flourishing Enterprise Innovation Toolkit’ allowing you to further elaborate on the questions is behind a pay-wall.

Other efforts

Several other organisations, projects and initiatives have developed modified Business Model Canvas templates to include sustainability aspects, often adding extra boxes within the canvas. However, even though these indicate that in order to build a sustainable business, you need to consider other elements, I fail to see that they truly assist your thinking to create environmental sustainable businesses.

alternative Business Model Canvas templates adding sustainability aspects into the overview. Found at https://rethinkbusiness.dk/ and https://www.case-ka.eu/wp/wp-content/uploads/2017/05/SustainableBusinessModelCanvas_highresolution.jp
Alternative Business Model Canvas templates adding sustainability aspects into the overview

Two alternative versions: The Sustainable Business Model Canvas with two extra blocks below. and The Sustainable Business Model Canvas with an additional block under distribution.

Conclusion: How to proceed adding environmental sustainability considerations in your business model development?

The above mentioned extensions to the Business Model Canvas may serve as tools to help users conceptualize, understand, and communicate the impact of a business model and thus assist in developing new and exciting sustainability-oriented innovative businesses.

However, only a couple of them really challenges your systems thinking, so that you truly consider environmental aspects in designing new business models. Among the extensions mentioned in this blog post, I would recommend giving the Triple Layer Business Model Canvas a go. It seem to be the best rooted approach, but may require some preparation in order to dig out data from a Life Cycle Assessment database or at least have established an overarching idea of the impact in different parts of a product life cycle and not only impacts within your business activity. In your efforts you could add e.g. the Sustainability Impact Canvas or balanced score card tool from Threebility.

I would of course also encourage you to learn more about the environmental elements that you should consider in developing a sustainable business, e.g. ecosystem services, systems thinking, Life Cycle thinking, Nature-based Solutions, cradle-to-cradle, bioeconomy principles, and circular economy principles.
– Concepts in which we at BioCircular.eu could offer some 101 for you to get a general idea about.

Good luck!

(Should you know of other add-ons, extensions or other relevant tools to supplement the original Business Model Canvas, then please do not hesitate to contact us)

nature-based solutions - benefits nature and society

Nature-based Solutions – a possible path to business

In recent years, businesses increasingly recognise that they rely on nature for ecosystem services that underpin their activities or would put them at risk if disappearing. Perhaps Nature-based Solutions could be a tool for developing future – truly sustainable – businesses? This text explores some of these opportunities. But first, what is Nature-based Solutions?

Working in the bioeconomy arena, I have been hearing about Nature-based Solutions for some years. Especially in the context of arriving at ”green solutions”, that are focused on developing climate smart solutions. However, it was only recently that I realized that, ‘Nature-based solutions’ is not just another way of saying ‘bio-based’ as opposed to ‘fossil-based’. ‘Nature-based Solutions’ is actually a concept that has been coined within fairly recently. Since around 2015 researchers, have pondered on how to actually define it, and operationalise it. The International Union for Conservation of Nature (IUCN), has made a great body of work and in the summer of 2020 published a global standard for Nature-based Solutions (which they abbreviate NbS). The ambition is that the standard can serve as a tool to design, verify, and upscale NbS.

There is not yet complete consensus about what Nature-Based solutions actually is. However, all revolve around the same overarching ideas. IUCN define Nature-based Solutions as:

“actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits”

Illustration from IUCN showing what Nature-based Solutions entail.

The European Commission has pushed for Nature-Based Solutions (abbreviated NBS) for some years, and with the biodiversity strategy from 2020, the Green Deal and Horizon Europe (the research and innovation Framework 2021-2027), the European Commission envision NBS to play a major role in the societal transition in Europe. They define Nature-Based Solutions as:

inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions. – Hence, nature-based solutions must benefit biodiversity and support the delivery of a range of ecosystem services.

As I understand it, both definitions say that nature-based solutions deliver benefits for both nature and society within a solution. Thus, nature-based solutions are not an off-set strategy, but are actions that on one side provide tangible and measurable benefits for biodiversity and/or ecosystems and on the other provide some benefits to humans.

The differences in the definitions are somehow reflecting divergent views on the balance between the benefits. Should the nature-based solutions focus primarily on benefits for people, society or businesses or should they focus on contributions to halt biodiversity loss, ecosystem restoration and integrity?

It can be viewed as a spectrum, and solutions at the endpoints provide benefits either to nature or to society and basically is solely “do no harm” to the other. Depending on the definition, the span to the right-hand side considered nature-based solutions, will vary.

Nature-based solutions should be integrated solutions providing benefits for both biodiversity/ecosystems and society. How much a solution benefit either of the two, is key in determining if a solutions is actually a nature-based solution. (own graphic)

Examples of Nature-based solutions

In the European Union the European Commission engaged experts to conduct an analysis of nature-based solutions that had been implemented as part of EU funded projects.  

These examples include renaturing landfill sites, restoration of catchments and coastal landscapes, making green roofs and walls in urban areas, increase cycle and pedestrian green routes, using tree planting in cities for shade, cooling and relaxation. Other examples from various organisations often include focus on the climate mitigation effects as well as restoration.

The colour is green – but what is the benefit for biodiversity or the ecosystems?
– A green solution is not always a nature-based solution.

Why a green solution is not necessarily also a nature-based solution

Case: The case of green roofs – it might and it might not be a true nature-based solution

A group of trees, a field of grass, or other nice and green looking areas seem to be obvious cases of nature-based solutions.

However, just because the result looks green, it does not make it a nature-based solution by default!

In a research paper (Eggermont et al, 2015) the researchers provide an example:

Green roofs and other green surfaces in urban areas might have positive climate impact but if the green roof or wall is covered by only very few species of plants, that doesn’t belong to the area, then it is very limited, how much the area is contributing to the local biodiversity. E.g. if insects are not able to feed on the plants or get nectar from the flowers. Introduced plant species might also spread uncontrolled to adjacent parks or other green areas and thus outcompete the natural flora. If the seeds were all coming from only a few strains then the genetic diversity is low, and the plants might have low tolerance to drought or diseases. Should an event hit the area, they all suffer.

Thus on city level, the variety across rooftops becomes important to ensure the resilience and diversity in the implemented solution and thus the benefit for nature.

Case: re-forestation looks green, but may not be a true nature-based solution

Reforestation initiatives have been established as a climate change mitigation effort, that capture carbon and also provide biomass for bioenergy. However, Center for International Forestry Research (CIFOR) sees the decades-long afforestation policy in Chile running from 1974 to 2012 as a case of a poorly designed tree-planting initiative. It has resulted in widespread tree plantations for valuable commodities and replaced native forests, causing a loss of biodiversity and natural carbon sinks. So, the new forests may look green, and they do capture CO2, but they are not providing additional benefits for nature.

How can nature-based solutions be a business?

Perspectives for businesses
Many businesses depend on ecosystem services in their activities, either directly or through inputs that depend on ecosystems. Also, many businesses have impacts on nature through e.g. emissions, water, energy, land-use or waste-streams.

A large variety of ecosystem services can be enhanced by Nature-based Solutions. And I believe there is still much to gain by using the NBS framework for developing new solutions, not only for the benefit of society, but also for businesses. NBS business model is still in its infancy and examples need to be showcased. There are challenges in developing a NBS business, some of which are pointed at below.

Business challenge: The benefits of Ecosystem services and biodiversity are often free
You are right in thinking, that it can be a challenge to come up with NBS concepts that would be a economic viable business in itself. And there are several reasons, one of which is that ecosystem  services are often seen as externalities and usually not paid for. This means that you do not pay to utilize ecosystem services in your business. E.g. the apple plantation does not pay for the bees to pollinate the apple-blossom (at least not in Europe). So, a plantation owner would often forget about this benefit. On the other hand, if the owners are aware that this is a key ecosystem service on which the business rely, they might want to minimize risk by e.g. ensuring a nice variety of flowers among the apple trees that keep the insects happy their entire growth season and lifecycle.

Guaranteeing pollinating insects are around helps the plantation, but it might also benefit the neighbouring farmers or plantations. Even though they benefit, it is difficult to sell the service to them, or have them pay a share of the cost. 

As biodiversity and ecosystem services often are unpaid benefits, and often not restricted to a smaller area with a single owner, it makes it difficult to realise the business case. However, as for the case of green roofing, going from a roof to a city of level perspective opens up for selling a range of plants or grouped into ‘mini-habitats’ that can benefit various organisms.

Businesses providing nature-based solutions in the making

Here is what I would consider an example of a nature-based business:

Case: Production of mussels for clean water

Along the Danish coasts there is a lot of nutrients in the water. Partly due to the run-off of fertilizer from farmland. A concept has been developed to farm mussels in these waters. Not with the purpose of producing mussels for meals but as a way of removing nutrients from the water, as a ‘cleaning service’. If the purpose is removal of as much biomass as possible, then the producer will not ensure the mussels have ample of space to develop into a large fleshy size, and thus remove growth from the lines during the growing period, etc. It is still experimental, and not yet a viable business.

production of mussels can enhance a coastal ecosystem, remove nutrients from the water and provide food feed
Production of mussels can enhance a coastal ecosystem, remove nutrients from the water as well as providing food and feed.

The largest of the mussels can be harvested for food, but there is still no valuable products to be made from the rest of the mussels of odd sizes. However, if the agriculture farmers had to pay a fee for the nutrient removal it would be economically feasible and thus be a perfect example of a NBS business. The mussels filters microalgae out of the water, the microalgae thrive with the high nutrient load. Removing the microalgae makes the water clearer. This improves the conditions for bottom living algae and plants and improves the oxygen levels in the water. All of which also benefit fish and other animals in the coastal zone. The production is taking place in rural/coastal areas and would benefit the local employment and local economy.

The transition into a bio-based future will probably lead to good ideas for how to use the shells and meat of the smaller mussels, and I predict that we will see this type of mussel farming in the future.

Other ecosystem services or resources could become a business

Fresh water is increasingly a scarce resource. However, rainwater is often seen as a problem and is expensive to pipe out of urban areas. Thus new businesses might probably emerge that can utilise rainwater to ensure clean water for business activities, drinking, bathing etc., within city boundaries as well as securing clean water flowing into natural systems.

With a little creativity, I am sure other new innovative businesses can be develop that not only “do-no-harm” to nature, but actually is economically profitable, benefit people while also improving the situation for nature.

Why we cannot increase our dependence on nature – even by a modest 2 % per year…

The other day, I read an almost 100 year old article in one of the first Danish scout magazines. It was fun to read about the issues they were dealing with in establishing the scout movement, and how well perceived it was in the entire society. From a ‘BioCircular’ point of view, there was an interesting article of how scouts learned tracks and signs in nature in Denmark. It was striking to read the description of all the mammals and birds of prey that you ‘typically’ would encounter back then. Many of which are now, very rare or gone altogether from our landscapes. Changes has happened; however, as it is not in my lifetime, I do not have the baseline for comparing changes to nature over the 100 years period.

After the pandemic of COVID-19, everybody got a fair understanding of what exponential growth means. As the virus spread globally during March 2020 there was a doubling time of approximate 6 days in the registered number of cases. With that pace, it was clear that exponential growth that initially seem harmless rapidly can turn into significant numbers. Going from 10 to 80 cases might be a challenge for a large hospital in four doubling times (approximately 4 weeks) – however, going from 80 to 1,280 cases (in another four weeks) is a catastrophe.

The tricky thing about exponential growth is that it often seems insignificant in the beginning, except when doubling time is days or weeks, then, we as humans, are able to perceive, the change as substantial. When the doubling time is years or decades, then changes occur so slowly that we adapt without being conscious or do not realise it, as it would require comparison between generations. While COVID-19 spread fast, the degradation of natural systems are happing at a much slower pace. In order to grasp how different many ecosystems are today, we either need to interview old people and hear their description, or turn to data or narratives in old written records. In both cases we are limited in getting good facts about the status more than 100 years old.

I have read old descriptions of fish catch data in European water, hunting kills for fur in Greenland and the efforts of building railways and establishing farming in Kenya and the conflicts and encounters with the wildlife in those situations. Reading these today, you are amazed and cannot fathom, that it was descriptions of reality. Each person and each generation sets its own baseline for comparison. So, a change might be noticed, but as you experience a gradual change, you reset your internal base line and do not recognize the decadal change. When thinking back, you might actually recall major change in some areas compared to your childhood. Green spots that have now been developed into farming areas, roads that have been constructed or buildings put up. And that is in your life time alone…

Our society really began using natural resources about 150 years ago. Here you see depletion of a resources with a 2% growth rate per year.
Some countries have growth rates of about 7% per year. Here you see depletion of a resources with that rate.

In the above graphics you can see how fast an area would change with a 2% and 7% growth rate per year. In the beginning you see a small use and some change, and before the last doubling time, there is still 50% of the resource left. 3 doubling times before full use, only 1/8th (12 percent) has been used, and you would probably not be worried that the resource will eventual be depleted! For all our non-renewable resources, even a tiny, yet consistent increase in resource use will eventually lead to depletion.

For our biological resources, it is not as rapid depletion as depicted in the graphic. For two reasons: one, there is a continued replenishment of the resources, so that the use of the resource is to some degree counteracted from renewal – new photosynthesis production or new off-springs of organisms. The other reason is that when a resource becomes scarce, it is more difficult to find, capture, harvest or kill the remaining. Thus, a small fraction will probably survive for a longer period of time. And that is actually what we see in e.g. the numbers of a lot of game, from which there is some kind of data or estimate of previous abundance. Lions in East Africa are a good example. We still think there is an reasonably sized population of lions left, and if you go on safari in the region you stand a good chance to meet them. In my life-time, and coming to the region in the past 30 years, I have no impression that there is less – though IUCN estimate a decline of about 59% in the region. Totally, the lion population is down to about 20,000 individuals. Compared to estimates of 200,000 a hundred years ago, it is only a fraction.

What I can observe though, is that settlements are creeping in on the habitats of the lions. More houses, more cattle and goats, more farming is fenced off right at the borders of the national parks. Thus, the free movement in the larger ecosystem in which the park served as a safe-heaven has changed. Here the land is now cultivated, and only the park remains of the original ecosystem and even the park is often encroached by grazing life stock. Small changes, but added up, the have significant impact on the lions possibility to roam and live their lives. If the changes continue to grow with the same pace, the lions are confined to fragmented park areas only, and only kept in healthy genetic condition through breeding programmes.

We need to have these perspectives in mind, when discussing a transition to a new bio-based society. We can succeed and are capable of developing a fundamental new way of living, where we a sustainable in the way we utilize resources. It is a huge challenge, and it will require a lot of new thinking:
a) developing new artificial ecosystems that are somewhat decoupled from natural systems;
b) ensure that we set aside a good chunk of space for nature to unfold itself (not in our picture, but allowing it to develop as climate and other factors change);
c) only utilize the agreed amount and do not encroach the resources bit by bit;
d) do out best to develop truly sustainable business models through systems thinking.

Sustainable Goal Tower: all SDGs are NOT equal. Our society rely on a range of ecosystem services, which we need to ensure are functioning, in order for our our societies to exist. This fundament neet to be ensured.

The difficulty of systems thinking in green investments decisions

What do you think of, when hearing that we need green/sustainable solutions and thus green/sustainable investments?

I bet that you are considering the need for reducing the CO2 emissions
– and you are right.

Through the long series of IPCC reports showing the impact of climate change, and the series of high level political (COP) meetings, many countries in the world have recognized, and agreed to, reducing greenhouse gas emissions.
However, green solutions are much more than that. Our human society rely heavily on natural resources and depend on well-functioning ecosystems. Thus, when deciding on environmental sustainable solutions, we need to consider a wider range of aspects in addition to CO2.

We have forgotten that sustainable and green is much more than CO2

Our way of life creates many challenges for the systems of our planet, at least if we want it to be habitable for centuries to come. Especially for the last 20 years, it has been recognized that the use of fossil fuels has several problems – it is a finite resource, and the usage creates waste products, one of which is CO2. Initially, ‘going green’ meant addressing a range of other problems using finite or limited resources (e.g. freshwater and rainforest timber) as well as pollution originating from human activities. The Brundtland report (Our Common Future) from 1987 truly got the global attention focused on’ sustainable development’. In the report it states that development, poverty and population growth “ … all place unprecedented pressures on the planet’s lands, waters, forests, and other natural resources”. The Commission focused on “… population, food security, the loss of species and genetic resources, energy, industry, and human settlements – realizing that all of these are connected and cannot be treated in isolation one from another”. As the quotes imply, this means that sustainable solutions require that we consider all the natural systems and resources.

This representation of the Sustainable Development Goals show that the economy and society is based on the foundation of the biosphere. Illustration: Azote for Stockholm Resilience Centre, Stockholm University

In this text I will not dwell in examples showing the degradation of the living systems on earth. If you watch Animal Planet, National Geographic, Discovery Channel or similar shows, you know well enough what I am talking about.

It is time to come return to the mindset: that we need sustainable and green solutions that consider a broad span of environmental impacts of human activities. Most natural resources and services are finite or in limited supply on our planet. The Planetary Boundaries paper (Rockström et al, 2009) highlighted some important supplies, and the economist Kate Raworth elaborated on this and developed the Doughnut economy concept introducing a ‘safe and just operating space’ of utilizing the resources for humanity while acknowledging the limited availability and ensuring availability for the needs of natural systems.

The problem of single factor optimisation in business

In the old days, developing a business was all about creating new products and services to serve an ever-increasing group of customers. Or strived towards optimising efficiency, productivity or performance of the business with a single end-goal in sight: profit.
However, such a narrow-sighted optimisation easily created adverse effect on other parts of a system. Optimising own production result in additional waste or pollution in other parts of the supply chain, society or nature. And these consequences were in the past not considered. Over time, this became apparent in relation to e.g. pollution and labour working conditions. Eventually, as pollution affected people and society, it was regulated. Nowadays, there is e.g. a focus on preventing hazardous substances in reaching our fresh water supplies.

The COP meetings have resulted in an agreement to minimize greenhouse gases and the ambition by EU to reach climate neutrality by 2050 is a clear goal. Businesses and other institutions are now taking up this challenge and preparing for a transition optimising on this parameter. However, it is extremely important that we as a society in this transition phase do not repeat old mistakes: Optimising on a single parameter!

Systems thinking is exactly that: to consider problem solving in the context of the overall system and not by fixing the immediate problem at hand with one of the components

The CO2 focus, and climate impact of products and services is all well and fine. However, only as one aspect out of many environmental issues to be considered when developing green businesses or investing green. That makes the task of evaluating potential impacts very complex to handle. Decision-making is much more difficult when you need to weigh different options and make trade-offs, as a solution cannot be optimal on all parameters. The essential point is that there are some things, that you cannot trade off. In the development of a new products using alternative resources it may be difficult to sense what the impact will be, and thus if using the alternatives is at all a better solution. Systems thinking is exactly that: to consider problem solving in the context of the overall system and not by fixing the immediate problem at hand with one of the components. To ensure unintended consequences, a holistic view, looking at the relationships among components and other systems is required.

The devious thing called sustainability

Sustainability in short is about planet, people and profit. Many businesses have adopted the CSR and triple bottom-line ideas, which is fine. In the recent years, the Sustainable Development Goals (SDGs) have gained momentum, and there is a broad recognition in businesses and society that we need to do something. Many of the SDGs are centered around developing societies to ensure human health and well-being, and though important, we need to acknowledge that our society is based on resources and ecosystem services that are provided to us by the planet. We can use these resources, but we cannot negotiate or off-set overuse. We can only stop using natural resources, try to protect or seek to restore the natural systems and the resources. Integrity of the natural systems are the fundament for many of our basic needs such as food, protection from landslides or coastal degradation. This means that usage of a wide range of natural resources needs to be considered in society and in production of products and services. The sustainability issues of people and profit are not on equal terms with those of the planet. This does not mean that people and economy are not important. They truly are. However, development of society and industries are the domain of people and we can discuss and debate, and through policies underpin the direction. Whereas certain activities impacting nature and the earth systems, are simply non-negotiable. Environmental sustainability is therefore essential and thus at the base of the SDGs in the depicted graphic from Stockholm Resilience Center.

So, what is environmental sustainable?

It is agreed that the consumption of fossil-fuel should be stopped and limit the usage of fossil resources to extremely low levels and only for necessary products or services. An airplane that is 10% better in fuel consumption is thus not ’sustainable’ though it might be better than its predecessor. Truly sustainable solutions would not have impact on natural systems, to an extend that is more than the systems can cope with and manage to regenerate to maintain the planetary homeostasis.

In the case of the fuel consumption of the airplane, we do in principle have enough renewable energy available for our societal needs, we just need to learn how to capture and control it (store and distribute it from production sites to where it is needed). So in the long run, we should be able to solve the energy needs by other means than fossil fuels.

A range of resources and ecosystem services are in limited availability or degrading through usage. It is difficult to get an overview of all the possible consequences that human activities cause on the natural systems. The planetary boundaries paper pointed at some of these suchs as freshwater use, land-system change, biochemical flows, ozone depletion, acidification. Many of which are incorporated in the life cycle assessment (LCA) framework where there are also more impact categories. They include eutrophication, ecotoxicity, non-living resource use (fossil and mineral), living resource use (e.g. fishing or wood logging), noise, and pathogens.

Life Cycle Analysis (LCA) is an ISO-standardised methodology for quantifying environmental impacts of products or services in a life cycle perspective, i.e. from extraction of the raw materials, to manufacturing and use, as well as recycling or final disposal. Over the past decades, LCA has been widely used for products to ensure as low environmental impacts as possible.

There is hardly any human activity not affecting the environment, and fortunately for us, the earth systems are resilient and can cope with some disturbance. Humanity may need to agree what the best usage is and make priorities that goes beyond enterprise level. But the discussion of potentially looking at ‘absolute sustainability’ is another story …

What to consider when evaluating new green solutions and business opportunities from an investor perspective?

As described previously green is much more than CO2 – it is all the environmental implications that business activities generate. It would be great to have a single tool to systematically consider other environmental sustainability criteria than the mitigation of climate change. In this, systems thinking is needed to ensure that solutions do not have unintended consequences for other parts of the earth systems. However, there are no recommended or established environmental sustainability methodologies though some concepts exists that can assist (e.g. life cycle thinking and the concept of ecosystem services) and by looking at progress towards the environmental parts of the Sustainable Developments Goals.

In general, a good business case will show how the initial costs will be recouped, and the business will grow. Ideally, the business will scale and obtain some economies of scale and perhaps expand to other countries. These characteristics may still be valid for new green business opportunities – but they may also contradict. The two major characteristics – scale and place – need also to be taken into account in terms of environmental sustainability.

the principle of defining the limits for possible locations for a green solution, is something that is too often forgotten

There are several factors to take into consideration when dealing with natural ecosystems. First of all, we need to be aware that all ecosystems are not alike, and thus no single solutions will work everywhere – the place that you decide to run your business matters.

E.g. if you want to produce tomatoes, you would prefer a sunny site with plenty of water. This will not solve the need for food in a desert area, and if you want energy from the sun, it would not work well in wintertime in polar regions… It sounds obvious, however, it puts limits to the growth potential of a tomato or sun-energy business, and the principle of defining the limits for possible locations for a green solution, is something that is too often forgotten.

The scale is another issue. Many new businesses aim to produce bio-based products. This is great. As long as there is enough biomass to begin with. Often the biomass is scattered over a larger area. This will require a lot of transportation to collect the material into the central processing plant – or – to develop a mobile plant or cheap smaller processing units that can be widely distributed.

If you miss out on these considerations it can have wide consequences. The resent Danish strategy to build large-scale facilities using biomass from trees for heat an electricity production, has shown to be a failure. Using trees to cover societal energy needs does not work on national scale. The increase of large facilities has led to an increased demand for wood that surpasses the possible supply from Danish forests. Thus, Denmark is increasingly dependent on import of wood pellets from other countries. As plants has also been built in other countries the inflated demand is now effecting the global supply of wood for other uses and encouraging a unsustainable level of logging in some countries.

While developing the use of biomass for energy production really makes sense in places where there is a surplus of otherwise unused biomass – e.g. producing biogas from seaweed collected along the shores in certain coastal areas. It will probably never go beyond being a sustainable solution in small scale and very specific locations.

So, what to do? – Analyse the environmental sustainability before investing

Before investing in a new green solution it is necessary to analyse the wider implications on the natural systems. At BioCircular we are focusing on this. We wish to develop the considerations above into a framework that allow for analysing the potential of new solutions – not the economic viability of the business plan, not the implications for society or worker health – but the environmental sustainability.

The advantages of doing such an analysis up front are many:
First of all, is the business solution truly green and environmental sustainable and not only fixing a single problem? This is key for the trustworthiness of the business and the accountability of investors. The risk of bad publicity is high, if detrimental environmental consequences have been overlooked.
Secondly, knowing the limits for scalability sets a cap for the investment – or allow for adaptation of the business model to overcome the limitations before proceeding too far into developing the business.
Third, a truly sustainable solution ensures the risk of future rules and regulations impacting the business is low and thus warrants a viable business in the long run (at least from an environmental perspective).

If you wish to start think about sustainability in your business model, and are familiar with the Business Model Canvas then I suggest to have a look at this blogpost describing a few of the available sustainability tools that adds onto the Business Model Canvas.

wbcsd - CEO guide to the circular bioeconomy

Circular bioeconomy inspiration for the CEO

The principles that should be utilised in developing businesses based on the circular bioeconomy concept has huge potential in transforming our world, so that the planet is habitable for people and nature.

We as humans have relied on bioeconomy since the begining of trade, however, it has not always been circular and sustainable – especially in recent decades. Thus the World Business Council for Sustainable Development (WBCSD) ‘CEO Guide to the Circular Bioeconomy’ is a nice short document to serve as inspiration for introducing the thoughts in todays businesses. find it at the WBCSD website

Conference – towards a circular bioeconomy

BioCircular participated in a very interesting conference on issues towards a circular bio-economy that was jointly organised by three research projects, CYCLE, BioSmart and SusValueWaste, all funded by the BIONÆR programme of the Research Council of Norway.

Circular bioeconomy is now on the agenda

Conference in circular bioeconomy

In the conference it became clear that bioeconomy encompases many things depending on the sector or research discipline you are coming from. But it also showed that there are many promissing solutions – many of which are mental – in order to get a sustainable society.

The value of nature

For someone who loves nature it can be difficult to accept discussing the value of an ecosystem only in the context of the current utilization of the resources by humans. It is implied – and a purpose of sustainability – that a sustainable use of ecosystem resources means maintaining healthy systems – also for possible future use. Dennis Lisbjerg wrote an article in the online magazine Habitat published by Danish Zoological Society.

 

value of nature

You can also download the entire magazine including the article from the Danish Zoological Society website: http://dzs.dk/habitat-8/

Do you know what bioeconomy is? take a look here

 

What is bioeconomy?

In 2013 Dennis wrote an article on Bioeconomy in the online magazine Habitat, published by Danish Zoological Society. It provided some indications of the perspectives for a bioeconomy.

You can find the article here.

what is bioeconomy

 

Since the bioeconomy strategy was adopted in EU, a lot of research and innovation effort has been put into developing new methods and products. It is great to see the creativity and to learn that even large companies are now considering bioresources and the circular thinking.

The fundament is still the ecosystems and the living resources that lives within. and it is a challenge to ensure a sustainable utilisation of nature, and to develop a frame for making cost-benefit analysis of irreversible changes that we consider doing. Read more on The value of nature.

coffee to produce mushrooms

mushrooms grown on coffee

Beyond Coffee in Copenhagen has started producing Oyster mushrooms on used coffee grounds. It is a great concept and a nice example of the many solutions to find clever ways of reusing biomass that is otherwise wasted. See more at http://www.beyondcoffee.dk/

We wish the guys the best of luck with the venture …