To make things better, make better things
Ask people about environment and economy, and many feel the two are opposites. So compromise is necessary: ‘It’d be nice to have both, but…’
It’s no surprise. The last generation lived through times when the environmental movement pointed at the problem with a familiar graphic (but no solution): a set of scales – dollar signs on one side, planet on the other. It’s a simple belief that runs throughout our society and is even taught in schools to children, who grow up to pass on this narrative.
There are a lot of issues with this. First it’s incompatible with our linear, volume-based economy. We buy things, and economic vitality is measured on just how much we buy. So from an economist’s or politician’s point of view, a “buying less” society triggers all sorts of alarm bells. From a citizen’s perspective, buying something slightly less bad just delays the inevitable, it doesn’t change the system. The few who do this are driven to do this by a sense of duty. Or ‘doing your bit’, as the marketing says, somewhat disingenuously.
But if it’s about changing the world, consider that the world-changing force that propelled Apple, a tiny garage startup into a multibillion global empire with products in pockets all over the world, wasn’t driven by 100 million consumers ‘doing their bit’ – the finance provided by iPhone users to facilitate that global shift in material resources, energy and time wasn’t driven by duty.
Our company also shares a belief in basic demand and supply economics. Two equal products of different price will result in the lower price item beating the higher. There is therefore a big conflict. According to the accepted narrative, sustainability will succeed if we do our bit – whether it stands any chance even if we do our bit is a question that is too conveniently and too frequently omitted. Because merely ‘less bad’ products, which are generally more expensive than ‘business as usual’ ones, are not an inspiring proposition, and will sooner or later see even the most motivated militants give up on them.
Yet fortunately some companies have seemingly defied these fundamental laws by designing products and businesses that are more ecologically sound and ethical than ever before, whilst making even more profit, unlocking higher growth and offering lower prices.
The circular economy is their secret – good design from the outset, positive impact factored in as a business strategy. Revealing it answers how some modern businesses have evolved, or engineered resilience in a time where material prices, credit and the wider economy are unstable.
Here’s a simple example. At Rapanui, material costs weigh a lot on the balance sheet. When we were designing a waterproof jacket recently, it would cost us £10 an item for recycled material, or £4 for virgin poly (free-falling oil prices, anyone?). So there’s a clear economic case for not recycling anything, not least as it costs us nothing as a company for our consumers to throw it in the bin later, since the linear model does not put a price on externalities
However, there is another, unlinked cost – the customer reactivation rate – a clever word for marketing. To convince Geoff to buy that jacket, it’ll cost us about £15 in marketing, staffing and consumables. But if we choose the recycled option, it would be possible to re-use the jacket material, so instead of marketing to him to buy a new one later, we can just pay Geoff to send it back when he’s done. The product is cheaper for him and although it costs us a little more in material, we save substantially on reactivation, and the whole product life cycle is cheaper for us, and Geoff.
A more ecologically sound product, a lower price for the customer and a more profitable business, through better design and better marketing.
So the circular economy is clearly a powerful thought. Our business is one of a growing few that have taken this thought into the business, and every KPI we have points to a clear economic case for the circular economy. Giving businesses a competitive edge today isn’t limited to the textbook or think tank. With these subtle communication and product design choices, we’ve become part of a group of companies that can outcompete business as usual, proving that getting the best of both worlds is possible.