Doing the right thing costs too much. At least thats what we tell ourselves. Switching to renewable energy. Engineering waste out of our supply chain. Recycling single use goods. We know their benefits. We feel good using them. So, why haven’t these approaches taken off?
In a dollar-driven world, these solutions simply don’t make sense. There are cheaper or more convenient alternatives. Living green for the sake of tomorrow puts us in the red today. This paradigm is especially critical in emerging economies and at established organizations with time tested business models. Ethical waste disposal, responsible emissions reductions and sustainable sourcing of raw materials challenge the budget for businesses everywhere. But new organizations are proving every day that sustainable business can be good for the planet and good for the bottom line. While Tesla is the first company that comes to mind when thinking of the profitability of sustainability, a new wave of upstarts across a number of industries have similar aims. Two industries with significant need for sustainability minded business leaders are fashion and food. And given their consumer-facing orientation, both industries have significant opportunities to alter public sentiment toward valuing sustainability more.
About 40% of all food produced goes to waste. All that waste is of particular concern because rotting food can take 25 years to decompose. And in the process produces methane, a gas that is 20x more harmful to the environment than carbon dioxide. From cultivation to manufacturing, shipping to consumption, the entire food supply chain is wrought with pain points that cause spoilage or waste. Fixing those problems represents a value proposition of $1 trillion annually. While incumbent organizations have been slow to enact significant changes that address this issue, newer companies have taken up the task. In Japan, the Food Ecology Center repurposes food waste as feed for livestock. The company receives over 30 tons of food daily that would otherwise spend decades rotting in landfills. Livestock using the feed can be sold at a premium and municipalities get a cheaper rate on food waste management compared to other service providers. Food waste also finds its way to human via organizations like Goodr. The Atlanta-based startup uses tech tools to help restaurants, hotels, and other businesses rack their excess food and distribute it to people facing food insecurity within their communities. And for the food waste that’s unfit for eating, Waga Energy has found a way to still put it to good use. The company uses filtration and distillation techniques to harvest biomethane gas that can be burned to produce electricity.
Even when food doesn’t go to waste, the industry contributes to landfills. Much of the packaging used to transport food consists of single use plastics, only 14% of which are recycled. Footprint is working to put a stop to that approach. The company uses technology to make compostable food packaging that biodegrades within three months. This represents as significant improvement over plastics that can remain in nature for hundreds of years. The founders at Loop have approached the same problem with a strategy for reducing waste. The organization operates with a new-age milk man model. Customers receive products in heavy duty containers made of metal, then ship them back. The food companies using Loop containers refill them and the cycle continues.
While the fashion industry doesn’t contribute as much waste as the food industry, its problems with sustainability remain quite costly. The waste created by the industry represents an estimated $500 million in annual value. The popular “fast fashion” model of producing trendy, law quality apparel to keep up with swiftly shifting tastes of consumers has further exacerbated the wastefulness of the industry. Despite the profitability of such practices, entrepreneurs are using sustainability minded approaches to turn a profit in fashion. Playing on the durable quality of legacy brands, startups like Yerdle are finding novel ways to keep customers happy with new fashions. It is one of the leading brands in the recommerce economy. Recommerce is a concept in which used clothing is repurposed via alterations, reselling, or rental platforms to find new uses for previously worn garments. Yerdle partners with brands to create ecommerce channels that help them capture the resell value of their goods. Yerdle reduces waste by extending the life cycle of apparel items. Rothy’s reduces waste by putting it to use. All of its shoes and handbags are made with salvaged plastic bottles and marine plastics. As of 2020, Rothy’s had diverted over 25 million water bottles away from landfills and repurposed them into apparel and accessories. The brand’s designers are able to turn out new product concepts quickly through the use of 3D knitting technology.
No matter how high the cost of doing business sustainably today, it still beats the incalculable costs incurred tomorrow by the damage of continuing business as usual. For now its just the upstarts and innovators on the vanguard. But soon enough even the most stodgy of enterprises will be forced to reckon with their carbon footprint in a way that alters their approach to business. What can older organizations do to catch up to younger companies that have been built with sustainability in their DNA? Incumbents must act quickly to tap into the innovative spirit of the more agile, environmentally-friendly upstarts, unlocking new opportunities and new ways of doing business that do well, while doing good to the planet. The tech tools used by the aforementioned brands are making it easier and more affordable for all companies to rethink their approaches to sustainability.