In this issue, we continue with Part 2 of the inaugural Earth Day Forum titled “The Business of Sustainability” where game-changing entrepreneurs, impact investors and sustainability thought-leaders across the globe convened to share invaluable insights in their areas of expertise. The Green Monday team conducted an in-depth interview with Richard Brubaker who provided the picture of the looming crises facing China and the world. We also sat down with Oliver Niedermaier and Albert Lam to learn how corporations shouldering social and environmental responsibilities can transform the apparel and mobility industries.
Richard Brubaker, Founder, Collective Responsibility
Richard Brubaker has spent the last 10 years in Asia, overseeing the development and execution of more than 200 projects focused on solving the challenges facing Asia. Based in Shanghai, he has witnessed firsthand the explosive economic growth in China and its dire consequences. Therefore he sees the urgency to engage, inspire and equip stakeholders to take their first step towards a more sustainable future.
Richard admits outright that he is not a polar bear/solar panel environmentalist, but he plays his part by studying how cities function and coming up with solutions mainly for corporates. As a Visiting Professor of Sustainability at the China Europe International School, he also guides his students who are going to take up managerial roles in firms on sustainability issues.
As the world’s population is projected to reach 9 billion by 2050 and natural resources are getting scarcer, feeding the planet is one of the major challenges our generation has to face. Richard Brubaker believes that sustaining 7 billion urban consumers compounds the issue. The food industry is a water- and energy-consuming collective of various businesses. Richard remarks, “Farmers compete with the urban environment for water. You either choose agriculture or urbanization.” As the living standards of people improve, demand for meat grows naturally.
In the case of China, according to the article titled ‘Biodiversity conservation: The key is reducing meat consumption’ in Science of the Total Environment, between 1978 and 2002, China’s per capita consumption of meat increased four-fold. If China adopts dietary habits similar to the US in the next three decades, each of its projected 1.5 billion inhabitants would increase their consumption of meat and other animal-products by an average of 138%. Richard conjectures 125 million more pigs will be needed by 2050 to feed the demand for pork in China. That means China has to import both meat products and feedstocks to produce meat locally.
While many people wonder how China can solve her economic, social and environmental issues, Richard believes the situation is changing for the better, saying, “My MBA students get better each year. A lot of them are single kids and are kind of spoiled. They want the best quality of life. That’s different from their parents who went through the worst in recent history and feel the need to protect themselves.” He recognizes a big gap between students and companies, stating, “Students don’t think companies care while companies can’t find the right people to do the work.” As a result, Collective Responsibility serves as a bridge between the two.
Having worked in Asia for a decade, Richard is well-versed with the immense challenges the region faces with massive urbanization taking place. Each city has different dilemmas. However, at the end of the day, individuals care about tangible personal matters, such as air and water quality, food safety and healthcare while corporations aim to “make money, save money, look good and feel good.” Richard states of a fundamental role of Collective Responsibility, “We create awareness, create engagement, create capacity and create scale. That’s how we can start a conversation. If we can get a company around that circle, we will change things for the better.”
Oliver Niedermaier, Founder, TAU Investment Management
Capitalizing on huge investment opportunities in the inefficient global supply chains, Oliver Niedermaier and his partners founded TAU Investment Management. They believe that driving a sea change in the world’s deeply intertwined supply chains has to begin at fixing the highly flawed system, instead of waiting for shoppers to change the dynamics.
At this stage, TAU focuses on the apparel industry, a lucrative US$780 billion field that takes a heavy toll on the environment. According to Oliver, it is estimated that 17-20% of industrial water pollution results from textile dyeing and treatment and that 4% of the global landfills are occupied by clothing and textiles. With the advent of fast fashion, those numbers are surging at a worrying rate. In addition, the apparel industry and other manufacturing sectors subject workers in developing nations to meager wages and awful factory conditions. On 24 April 2013, the Rana Plaza factory building in Bangladesh collapsed, killing over 1,000 workers and leaving thousands more injured. The accident brought worldwide attention to the true cost of producing an apparel item only for a short while. Consumers continue to buy excessively while workers toil without much improvement in their working environment.
The current sustainability lexicon emphasizes the ‘triple bottom line’ and Oliver sees that the ultimate goal is to make it the norm, saying, “Financial returns should be driven by social and environmental returns and vice versa. We want our investments to be single bottom line again.” He believes that a more conscious use of resources, be they natural or human, can lead to more sustainable supply chains. TAU invests in upgrading and modernizing factories in order to reduce energy and water usage, which translates into cost reduction. Moreover, manufacturers should place workers in the productivity equation. Oliver explains, “In garment factories, monthly staff turnover rate can reach up to 8%. We looked at many factories and found that the most productive and profitable ones have the least staff turnover rate.”
TAU has their eyes fixated on mid-sized, export-oriented manufacturers that have the clientele of established western brands. “We are looking at pretty successful and profitable manufacturers, aiming to expand their revenues to US$50-200 million,” says Oliver. “We are also after high growth markets across Southeast Asia, such as Vietnam, Bangladesh and Cambodia.” TAU strives to revolutionize the linear global supply chains into circular models, in hopes of attaining financial, social and environmental returns while improving the livelihoods of factory workers. “We aim to transform the current garment manufacturing industry. Everybody needs business opportunities to drive impact.”
Albert Lam, Group CEO, Detroit Electric Group Holdings
Before founding Detroit Electric in 2008, Albert Lam assumed the roles of the Chief Executive Officer of Lotus Engineering Group and Executive Director of the Lotus Group International for five years. With a broad vision and ample talent, Albert has led Detroit Electric to become one of the pioneers in the field.
“As governments in such countries as the Netherlands and Norway encourage strong policies to phase out diesel vehicles in 10 to 20 years, it is not difficult to forecast the booming of electric vehicles in the very near future,” says Albert.
However, building and improving the mechanics of electric cars is not the ultimate vision of Detroit Electric. “Electric vehicles improve air quality and reduce noise pollution, but these benefits are just the tip of the iceberg. Detroit Electric looks at the whole ecosystem,” explains Albert. “Electric vehicles can help upgrade the whole electric grid and transportation system.” As electric vehicles go mainstream, maintaining a stable and steady energy network becomes a challenge in most regions. The good news is – since energy cannot be created nor destroyed, according to conservation of energy, each electric vehicle can serve as a buffer in the network. Vehicle-to-grid (V2G), second-life battery and car sharing scheme are three main focuses of Detroit Electric at the moment, all aimed at utilizing the use of energy and resources.
Vehicle-to-grid (V2G), a power backup system, encourages each electric vehicle to communicate with the electric grid and return electricity to the network. This system can help balance loads between low and high demand periods during the day. “The system has already been developed. Full implementation is just a matter of time,” Albert says. “Countries like Denmark and Norway are applying V2G. Car owners agree to save 20% – 30% electricity in their cars and return to the grid at night. So far this proves to be a very efficient system.”
Second-life battery scheme matches the demand-and-supply in electricity market. After a few years of depreciation, car owners seek an eco-way to dispose of the car battery and electric companies seek affordable storage devices. Second-life battery makes a cheaper storage capacity to electric companies as most cost is absorbed by the vehicle itself.
Bicycles can be shared by the community, why not cars? “Social media such as Facebook makes the concept of sharing a part of the daily life of the young generation. We are moving from the age of privatization to personalization,” Albert explains. Nowadays, more than 500,000 bicycles are shared by the public in 500 cities in 49 countries. Car sharing scheme is based on the same concept, though much more personalized. “To most owners, a car is something quite private. Each of them has their own preference in terms of car setting,” elaborates Albert. “Thanks to the Cloud, Detroit Electric is developing a whole new brand that emphasizes a strong data base. Each time we book a car, it returns to our favorite settings – mirror angle, seat position, popular destination, even the music playlist.” Reduced purchase means reduced cost, energy saving, minimizing resources. And the outcome? The whole transport system can be changed.