EARTH, INC. Using nature’s rules to build sustainable profits

EARTH, INC.Using nature’s rules to build sustainable profits Look deep into nature, and then you will understand everythingbetter. - Albert Einstein Gregory Unruh Harvard University Press 2010

Value Chain (Unruh, 2010) Supporting Activities (HR, R&D, Infrastructure) Margin Inbound Logistics Operations Outbound Logistics Sales & Marketing Service Value-adding steps

The Value Chain in its Biospheric Context Natural Capital Manufacturing Post-consumer TAKE MAKE WASTE

Biosphere Rules • Materials Parsimony • Power Autonomy • Value Cycles • Sustainable Product Platforms • Function over Form

1. Materials Parsimony Minimize the types of materials used in products with a focus on materials that are life-friendly and economically recyclable. Business benefits of materials parsimony Biosphere rule Business benefit Materials parsimony Reduced supplier complexity Reduced production complexity Reduced toxics risk Volume purchase discounts Improved health and safety Improved worker productivity Improved product attributes Improved environmental performance`

1. Materials Parsimony Parsimonious materials palette Negative Screen TOXIC Positive Screen RECYCLABLE

2. Power Autonomy Maximize the power autonomy of products and processes so they can function on renewable energy Business benefits of power autonomy Biosphere rule Business benefit Power autonomy Reduced energy costs Reduced compliance costs Reduced processing costs Improved environmental performance Improved customer performance Optimized for renewable energy

2. Power Autonomy Renewable power generation Total power demand Power autonomy convergence point 100% fossil fuels The ‘Joe Ling’ efficiency curve* Y Renewable generation curve X Today Future Power autonomy factor= (X/X+Y) *Joe Ling, VP of 3M, initiator of eco-efficiency programs (3P: Pollution Prevention Pays - 1975)

3. Value Cycles Business benefits of value cycles Biosphere rule Business benefit Value cycles Input cost savings Reduced processing costs Reduced supplier risk Increased control over brand reputation Improved asset management Improved customer information Recover and reincarnate materials from end-of-use goods into new value-added products.

3. Value Cycles Product Product level Shallow-loop recycling Components level Deep-loop recycling Materials level Product manufacturing hierarchy

4. Sustainable Product Platforms Business benefits of sustainable product platforms Biosphere rule Business benefit Increasing product Compound above benefits through scale platforms Compound above benefits through scope Foundation to accumulate learning by doing Build robust cross-industry platform demand Leverage your value cycle as a product platform for scale, scope, and knowledge economies.

Platform Governance Spectrum Vertical integration Partnership Open-sourced Self-organizing coordination through market forces and open standards Example: Commodities (steel) Sole control of all platform elements Example: Shaw Industries (carpeting) Collaborative coordination of platform tasks Example: Coca-Cola, Patagonia

5. Function over Form Business benefits of function over form Biosphere rule Business benefit Function over form Generate ongoing revenue stream Greater customer knowledge Increased control over asset base Convergence into expanded offerings Fulfill customers’ needs in ways that sustain the value cycle

Accumulating knowledge economies Reverse logistics Process technologies Convert & Cool Blue Reentry 2.0 Materials PVC and Nylon Company side Customer side Tac-Tiles & Entropy Evergreen lease Installed base Functional relationship Functional value provision The Interface value cycle

EARTH, INC. Using nature’s rules to build sustainable profits