The Sustainability Scorecard

How to Implement and Profit from Unexpected Solutions

Urvashi Bhatnagar, Paul Anastas

• Publisher: Berrett-Koehler Publishers
• Year: 2022
• ISBN:
  9781523093809
• Edition: 1
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

Using a rigorous, straightforward scorecard as a guide, this book shows business leaders and innovators how to create breakthrough sustainable products and processes that are good for the planet, human health, and profits. Natural resource inputs to business operations are getting scarcer and more expensive, while climate-change-related economic shocks pose a risk to seamless operations and, more importantly, threaten business continuity. How can organizations integrate sustainable design in their overarching operations and align it with profitability and corporate strategy? Based on Paul Anastas's foundational Twelve Principles of Green Chemistry, the Sustainability Scorecard is the first scientifically rooted, data-driven methodology for creating inherently sustainable and profitable products and processes. By redesigning with sustainability as a key design element, firms open themselves to unexpected solutions, leapfrog innovations, and sources of value that simply don't occur when sustainability is leveraged purely as a risk-avoidance and compliance measure. Urvashi Bhatnagar and Anastas offer dozens of examples of how sustainable operations can yield benefits such as expanding market share, creating new service lines, and transforming supply-chain and sourcing models to drive the most consistent and highest long-term value. With this comprehensive framework, your firm will be able to identify truly innovative, inherently sustainable products as opposed to less bad products and processes that don't provide the exponential value that only breakthrough products can.

Chapter 1

Lies about Sustainability Courtesy of the Status Quo

The stone age didn’t end for lack of stones.

—Sheikh Zaki Yamani

In the late third century, the great Greek king Pyrrhus of Epirus, Italy (then part of Greece), defended a small town in southern Italy from an impending invasion by the Romans. Tarantum was small, but mighty, founded by the Spartans. During the period of Greek colonization, it flourished, becoming a cultural, economic, and military power. It was the birthplace of several important philosophers, statesmen, writers, and athletes of the time.

Meanwhile, Pyrrhus was known to be one of the most skilled generals of the time. Pyrrhus defended Tarantum well; however, the victory was accompanied by large military losses. It resulted in not only a significant depletion of Pyrrhus’s troops but also the loss of many of his skilled leaders. According to Greek philosopher and biographer Plutarch, Pyrrhus remarked, “If we are victorious in one more battle with the Romans, we shall be utterly ruined.” And so it came to pass.¹

Tarantum rose victorious; however, the forge was so significantly depleted thereafter that the city was unable to withstand further assault from the Romans, and it fell a few years later. Since then, the expression a Pyrrhic victory has come to mean an accomplishment accompanied by such heavy losses that the value of the win is negated by the outcome of the victory itself. In other words, one has waged a duel against oneself.² Sound familiar?

It’s easy enough to make the argument that the “advances” we have achieved in the last two hundred years represent a Pyrrhic victory for humankind. Our current-day economic activities are in direct conflict with human health and environmental viability. But is it true that technological and economic progress necessitates the destruction of our natural world? Or is that just one of the lies the status quo tells us to preserve itself?

The research certainly proves the status quo wrong.

According to the Yale Climate Connections Initiative, a 4.5-degree rise in global surface temperature (as opposed to a 2.1-degree rise that will be attained if the world meets net zero goals) will cost us $224 billion per year—three-quarters of which will be related to health impacts.³ More than a third of that $224 billion is attributed to an increase in heat-related deaths.⁴ Furthermore, an MIT study on infrastructural impacts of climate change found that “infrastructure expenditures may rise as much as 25 percent due to climate change alone” by 2090.⁵ What this tells us is that environmental considerations are truly not a barrier to economic progress—but ignoring them is.

Economists of the future will surely consider our focus on short-term gains at the expense of environmental and social factors and a lack of will to develop new and innovative sustainable solutions as a Pyrrhic victory. In the absence of bold solutions to create economic value along the triple bottom line (financial, environmental, and social), the losses incurred by organizations due to climate-related shocks will be so monumental that they will negate any value obtained from the victory itself.

There is a way of achieving the same high returns and scalability of our ventures without destroying our planet—the source of the resources on which our economic activities rely. We can achieve superior performance, convenience, efficiency, and profitability not in spite of a focus on sustainability but because of it. And if superior performance and profitability in sustainable products are possible, then perhaps the power to achieve global climate-change goals is also within our reach.

We fully believe that business leaders do not have to accept toxic consequences to our loved ones’ health as a by-product of their economic activities. In this chapter, we audit a mosaic of so-called successful firms, industry actions, and products, and suggest more sustainable alternatives in order to prove that green-based solutions can deliver higher performance than their traditional counterparts and perform better on financial metrics over the long term.

Let’s start with the environment’s number one offender: plastics.

Lie 1: We Use Cheap Toxic Materials over Expensive Harmless Ones

No industry sector or product is as polarizing as plastics. According to the Plastics Industry Association, US plastics accounted for an estimated $432 billion in shipments and over nine hundred thousand jobs in 2017.⁶ In 1996, plastics accounted for approximately $275 billion in shipments, which at the time was a 55 percent increase since 1991.⁷ The most valuable features of plastics are their versatility and durability. Furthermore, the relative inertness of plastics lends to their being ideal candidates for everything from packaging and containers to drug delivery mechanisms. From a healthcare perspective, it is literally a lifesaving material. Yet the long-term accumulation of plastic polymers in our groundwater and environment is toxic. And the energy-intensive manufacturing process does the earth no favors either.

The plastics manufacturing process requires prolonged heating and cooling phases: heating to create the polymerization, and cooling to maximize the yield. If only the manufacturing process could occur at room temperature and pressure, it would minimize both the use of a significant amount of fossil fuel and the resulting pollution. Another green hurdle is that batch plastics are often created “off-specification.” This results in large volumes of one-use products—and a lot of waste.

What is it really that’s stopping us from introducing “greener” pathways for plastic production without compromising profitability?

After all, catalysts already exist that can reduce the pollution associated with plastic production by speeding up chemical reactions and lowering energy demands. Using them would make the industry not only more environmentally sustainable but also more cost-efficient. Further, real-time monitoring technology is currently available to prevent the production of potentially unviable plastics—less waste meets sustainability and profitability goals! And to reduce the toxicity of plastics on degradation, scientists have already developed a method to produce plastics from sugar and carbon dioxide rather than the carcinogenic benzene and toluene feedstocks that are currently used. Unlike their non-biodegradable counterparts, sugar- and carbon-based plastics break down to their component parts when exposed to the enzymes present in soil and can be combined without the high heat and pressure of traditional

Less-toxic products: check.

Lower-cost production: check.

If the solutions to some of these issues exist, why haven’t they been implemented yet? There are a few reasons for this:

▪ Lack of awareness of what is possible. It is probable that you’ve never heard of green chemistry. Are we correct? While green chemistry solutions have created profitability and significant success stories for most of the world’s leading organizations, the lack of mainstream information on the subject is a likely barrier to systematic implementation. After all, you can’t implement what you don’t know exists . . .

▪ Capital investment strategies typically align with solutions that are based on application-driven digital platforms. While this is certainly an important trend for several reasons, most of the world’s production processes are dependent on material and energy loops. This lack of focus on infrastructure, hardware, and other material and energy-loop considerations has likely limited the mainstreaming of green chemistry and green engineering solutions.

▪ Allocation of research and development. Traditionally, we find that investment dollars are concentrated in a few sectors globally, such as healthcare and the life sciences. By contrast, infrastructure, commodities, and manufacturing in general typically lack sophisticated research and development funding and capabilities.

But what if the plastics breakthrough was just a fluke? Surely there must be more than one industry in which sustainable products and processes are cheaper, demonstrate more profitable margins, and are also better for the environment. There is: cement.

Lie 2: Green Products Cost More for a Poorer Experience

A hallmark of civilization is the durability and flawlessness of its buildings, roads, and walkways. For millennia, cement has literally been the foundation of civilization. In the past century, Portland cement has become the global standard in cement use. If you’ve ever driven on a highway, strolled on a sidewalk, or entered a tall building, you have been on Portland cement. Unfortunately, Portland cement is extremely harmful for the environment.

The cement industry, along with the oil and gas industry, has been identified as a “carbon major” industry, with seven entities producing 13.21 percent of the world’s global annual carbon dioxide-equivalent emissions between 1854 and 2010.⁸ Cement production alone contributes 8 percent to the total carbon dioxide emissions in the world.⁹ Yet the material is here to stay. Researchers say it’s the key ingredient for satisfying global housing and modern infrastructure needs.¹⁰ In a McKinsey and Company analysis of the cement industry’s impact on the global carbon footprint, the analysts found that “the cement industry alone is responsible for about a quarter of all industry CO₂ emissions, and it also generates the most CO₂ emissions per dollar of revenue.”¹¹

Perhaps you are starting to see the pattern here, one that we hope to reverse with the Sustainability Scorecard. The world’s commitment to the status quo has allowed far too many unsustainable processes to remain undisrupted for literally centuries—for example, Portland cement; the Haber-Bosch process for the production of ammonia-based fertilizer, which we will discuss later; and the internal combustion engine used by Henry Ford that continues to demonstrate low fuel efficiency. Why? It certainly isn’t because of the unavailability of other, more sustainable options. Such as Ferrock™.

What if instead of emitting carbon dioxide, cement could absorb it? Ferrock, developed and patented by Dr. David Stone in 2014, does exactly this.

As a PhD student at the University of Arizona, Stone was working on an experiment to prevent iron from rusting when he serendipitously stumbled on the discovery of a material that seemed to bubble and froth. He thought the project was a waste, but when he returned the next day, he found that the material had turned into hard stone. He had developed a carbon-negative material that could substitute for Portland cement.

Ferrock presents several advantages over its predecessor. Steel dust (a nonrecyclable by-product of steel production) and silica, which can be collected from landfills, are part of the entirely “green” chemical process used in its production. The cement also has higher compressive strength than Portland cement, better crack resistance, higher tolerance to extreme heat (an important feature in a hotter world), and lower production costs at high scale. The secret of this material may be its proportions of calcium and silicate, which “enhance the strength of the material, reduce material volume and cut the emissions associated with concrete by more than half.”¹²

To test these claims, four graduate students at the University of Southern California conducted a life-cycle analysis of Ferrock. They concluded that the manufacturing process is much less energy intensive than for Portland cement because it does not require any heat to catalyze the curing process.¹³ (Conversely, the manufacturing process of Portland cement requires subjecting limestone to 2,800 degrees Fahrenheit.) The end result is a net-negative carbon output and a cement-like product that increases in hardness as it absorbs carbon.

Another material study compared the environmental impacts of ordinary Portland cement and Ferrock focusing especially on factors such as the products’ water use, energy consumption, and contribution to carbon pollution.¹⁴ By substituting ordinary Portland cement with Ferrock in varying proportions in concrete, scientists are trying to find the optimum ratio of replacement that yields desired results in terms of both strength (compressive, split tensile, and flexural tested) and sustainability. In all the test results, the addition of Ferrock not only produced a significant increase in strength but also outperformed on sustainability factors.

To test widespread integration of this product as a cement replacement, IronKast, David Stone’s firm, has received grants from the Environmental Protection Agency (EPA) to assist with the Tohono O’odham Community College’s (TOCC) Tribal Eco Ambassador Program.¹⁵ The Tohono O’odham nation is a Native American tribe in the Sonora desert in Arizona. The TOCC’s Tribal Eco Ambassador Program is a partnership between the EPA and the American Indian Higher Education Consortium, linking tribal college university professors and students with EPA scientists to solve the environmental problems most important to their communities.¹⁶ It has led to the construction of Ferrock building blocks manufactured from local recycled glass and steel for sidewalks and ramps. In fact, the community college’s patio was entirely constructed with Ferrock, utilizing fifty thousand glass bottles and several tons of steel dust that would have been dumped in the community landfill.

But Ferrock is not the only “green” cement that performs better and costs less to produce. Another firm, Solidia, has made early strides with carbon-negative cement by replacing a key ingredient, limestone, with another synthetic. Not only is it cheaper and faster to produce than traditional cement, it is also carbon negative, producing 70 percent less in emissions during its life cycle.¹⁷ Interestingly for the cement industry, which is facing increasing pressure from investors and governments to decarbonize, the biggest hurdle to mainstream adoption of these sustainable cements is the threat to traditional cement plants.¹⁸ Decommissioning them would eventually render them as distressed assets on financial statements. Distressed assets, in particular, are an outcome that operations and financial professionals are eager to avoid due to the implication that the capital invested in the produced goods cannot be recovered, and will be recorded as a loss on financial statements. Here the challenge of overcoming shut-down economics is the primary barrier to scaling. Innovation that is more efficient and higher performing than existing solutions threatens to shut down the economics of an entire industry. In this case, what is likely to be more practical in terms of a business application are drop-in solutions that can reduce the overall carbon-intensive nature of cement rather than a solution that would outright render existing practices obsolete.

The Status Quo Preserves Itself

Consider some of the twenty-first-century absurdities we live with today—things that individuals fifty to one hundred years from now will look back on and remark with correct judgment as our absurdities and obscenities: toxic preservatives in baby food, fertilizers, and cleaning products; air pollution from unfiltered vehicle emissions; and microplastics, to name a few. These things are so blatantly flawed in thought that it taxes our imagination to see why they are considered acceptable in today’s climate.

Now think about the processes that produce some of the most common products today. Some of the most embedded and seemingly innocuous products are created from toxic processes that have remained undisrupted for decades, and in many cases centuries. Like plastics. Like cement.

Why do we put up with them?

Our status quo bias, our irrational preferen...