ESG Selected Good Books | "Cradle to Cradle" Upgraded Again! Exploring the Revolutionary Ideas of "The Upcycle" (Part II)

LINK-ESG Book Recommendation Officer continues to introduce "The Upcycle: Beyond Sustainability - Designing for Abundance" to everyone in this issue. From traditional PET to plant bottles: Coca-Cola's sustainable packaging revolution Coca-Cola's "PlantBottle" project is a typical case of applying the Cradle to Cradle concept to packaging design. This innovative achievement not only significantly improves the environmental performance of packaging materials, but also finds a green alternative to traditional petroleum-based PET resin, opening up a new path for sustainable development in beverage packaging. Let's analyze this "material innovation" model: Features of PlantBottle Uses 30% plant materials (sugarcane, corn, etc.) to replace traditional petroleum-based PET resin, greatly reducing fossil energy consumption Plant-based materials are fermented naturally to convert into ethanol, and then synthesized into bio-based monoethylene glycol (BioBased MEG), partially "plantifying" PET While maintaining the functional properties of traditional PET (strength, barrier properties, etc.), its carbon footprint is reduced by over 20% The "PlantBottle" looks and feels the same as traditional plastic bottles in terms of appearance and touch, providing consumers with a "zero change" user experience Through improving the existing supply chain and production processes, it has achieved scale production and commercial application Significance of PlantBottle Shows that biobased materials can be safely used in high-demand scenarios such as food-grade packaging, setting a benchmark for the industry Utilizes non-food biomass resources such as agricultural waste, opening up a new approach to resolving the "food vs. fuel" debate Achieves emission reduction through material substitution, which is more economically effective than post-measures such as carbon offsetting Investment in building bioethanol factories promotes the development of the upstream raw material industry chain and increases farmers' income Actively collaborates with various sectors (such as jointly developing 100% plant-based PET with Virent) to create an open and innovative industry ecosystem Implications for ESG Material innovation is an important lever for improving the environmental performance of products throughout their lifecycle, and companies should use it as a breakthrough for ESG Focus on reducing and replacing materials at the source, systematically phasing out fossil-based materials, and vigorously developing renewable and biodegradable materials Design concepts should be based on the sustainable properties of materials, while considering multiple goals such as functionality, appearance, cost, etc., achieving a win-win situation for "environmental protection" and "high performance" The industrialization of material innovation achievements relies on supporting measures such as standard formulation and supply chain coordination. Enterprises should plan comprehensively and connect the entire chain Consider the social impact of materials, prioritize the use of environmentally friendly materials that benefit farmers and drive regional development, showcasing the social value of ESG Make good use of the demonstration effect of material innovation, lead industry transformation, enhance brand reputation, and set benchmarks for ESG The success of PlantBottle shows us that the exploration of environmentally friendly materials is endless. In this arena, companies from developed countries started earlier and are at the forefront, but developing countries also have great potential. Biomass resources such as plant fibers and agricultural waste are often abundant in developing countries, so how to transform them into environmentally friendly materials through tailored technological innovations is worth deep consideration by the business community. The success of PlantBottle is a result of Coca-Cola's strategic vision and innovative courage. As a leading company in the consumer goods industry, Coca-Cola has led the trend of packaging material transformation with its influence, interpreting the resonance between ESG and brand value through practical actions. This initiative also points the way for other companies: in the era of ESG, companies must be brave, innovative, and constantly refresh the imagination space for sustainable development through science-based material innovation. Continuous cycles: Satino Black drives the paper industry towards a sustainable future Van Houtum, a high-end sanitary paper manufacturer in the Netherlands, has developed the Satino Black series of products, which can be described as a model of Cradle to Cradle design. By reexamining the entire lifecycle of sanitary paper from materials, production, use to recycling, Van Houtum has achieved a true "closed loop," providing valuable reference for the sustainable transformation of the traditional paper industry. Let's explore this innovation: The closed loop of Satino Black Selects raw materials from the source, using 100% European FSC-certified wood pulp to eliminate potential risks such as deforestation In the production process, eliminates allergenic and carcinogenic substances used in traditional sanitary paper, such as fluorescent whitening agents, residual pesticides, etc. The finished product uses biodegradable materials, such as water-based inks, and 100% recyclable packaging materials Through terminal recycling of waste paper, establishing a reverse logistics system to reintroduce paper into the production cycle Using advanced pulping processes, incorporating recycled pulp into production, while ensuring quality and increasing resource utilization Wastewater treatment meets drinking water standards, with reused water in production, achieving "zero emissions" pollution Innovative value of Satino Black Pioneering closed-loop design in the field of sanitary paper, connecting the entire chain of raw materials, production, use, recycling, and reuse Subverts the stereotype that recycled paper equals gray, rough, combining environmental protection with high quality By reducing materials at the source, controlling processes, and end-of-life recycling, it minimizes environmental footprint, becoming the preferred choice for responsible consumption The recycling system relieves enterprises of environmental compliance pressure, enabling them to win in the circular economy Behind Satino Black is Van Houtum's strategic vision and innovative courage. As a leader in the consumer goods industry, Coca-Cola has provided direction for other companies: in the ESG era, companies must dare to take responsibility, innovate, and constantly refresh the imagination space for sustainable development through science-based material innovation.Machine/Tool/Electronic DeviceThrough collaborating with environmental organizations to spread ideas, consumer engagement has been increased, and brand influence has been expanded. Brand Effect The 2010 launch of Satino Black quickly became a market leader and a star product for Van Houtum. It has won multiple design awards and set a benchmark for sustainable development in the toilet paper industry. Included in the Dutch Ministry of the Environment's "Green Deals" directory, receiving strong government support for procurement. Recognized by authoritative organizations like WWF, entering the top ten best circular economy practice companies in the Netherlands. The closed-loop model of Satino Black has been imitated by many peers, creating a demonstration effect within the industry. Implications for ESG Closed-loop design must consider the entire product lifecycle and systematically consider multiple goals such as environmental, social, and economic aspects. Focus on source reduction, starting from material selection, formula design, and other aspects to fundamentally eliminate pollution. Product recycling is a key part of achieving a closed-loop system, requiring innovative business models and perfecting complementary systems for collection, sorting, and reuse. Utilize the brand effect to transform the environmental and social benefits of closed-loop design into brand assets, realizing a brand value increase. Closed-loop design requires cross-departmental coordination, with ESG embedded in various stages such as research and development, procurement, production, and marketing, for cohesive advancement. Actively participate in public advocacy on ESG issues, raise consumer awareness, promote green consumption, and create a virtuous cycle. The journey of Van Houtum's closed loop demonstrates that even in seemingly "insignificant" areas like toilet paper, as long as innovative thinking is present, the circular economy can be highly successful. Traditional beliefs may see sustainable products as shoddy and low-quality, but Satino Black has proven through practical actions that closed-loop design can achieve a win-win in terms of environmental protection, quality, and cost. Behind this case is the exceptional wisdom of entrepreneurs who have integrated ESG into their business logic and competitive strategy. When Satino Black was first launched, sustainable consumption was not yet prevalent, but Van Houtum had the foresight to innovate and boldly lead the market through closed-loop design, reshaping the value proposition of toilet paper. Air Sole's Circular Mission: How Nike is Creating Zero-Waste Athletic Shoes Nike's Air series athletic shoes have been globally renowned for their innovative cushioning technology and stylish design. However, traditional Air cushioned shoes produce a large amount of waste during production, and the soles are difficult to recycle. To address this challenge, Nike's design team drew inspiration from the Cradle to Cradle concept and developed Nike Grind recycled materials, launching the revolutionary Air Sole sole. This breakthrough pioneered circular design in athletic shoes, setting a benchmark for the entire industry. Highlights of Air Sole's Circular Design The sole utilizes Nike Grind materials, mainly sourced from Nike's own production waste and recycled old shoes. Nike Grind materials are 100% recyclable, lightweight, breathable, and have outstanding cushioning performance. Existing production lines have been upgraded for precision and minimal waste generation in the shoemaking process. Through projects like Nike Reuse-A-Shoe, post-consumer athletic shoes have been collected, accumulating 33 million pairs. Recycled shoes are processed into Nike Grind particles through crushing and cleaning, enabling multiple cycles of material reuse. Nike Grind materials are not only used for soles but also widely applied in clothing, accessories, and even sports fields. Significance of Circular Design With an estimated 80% recycling rate, each pair of Air Sole shoes can reduce 195 grams of carbon emissions. Reduced production waste and old shoes landfilled, while Nike Grind materials see increased utilization efficiency, enhancing resource utilization. Accelerated market application of Nike Grind, through scaled production and cross-industry cooperation, has fostered a new circular industry chain. Provides a convenient channel for consumer participation in closed-loop systems, enhancing brand reputation and customer loyalty. The success of Air Sole has inspired traditional shoe manufacturers' environmental innovation enthusiasm, driving industry green upgrades. As a significant milestone in Nike's sustainable development, Air Sole showcases Nike's ESG ambitions and strengths to the capital market. Implications for ESG Circular design should be based on core business, focusing on star products to drive overall change. Focus on key aspects such as materials, processes, and recycling, systematically designing to form closed loops. Tap into consumer enthusiasm for circular economy, making sustainability a fashionable lifestyle. Leveraging first-mover advantages, construct a circular ecosystem through cross-industry collaboration to expand opportunities. Embed circular design into innovation culture as an organic component of a company's ESG gene. Sustainable business model innovations often attract favor from the capital market, providing more room for company development. Air Sole's breakthrough demonstrates that even in technically intensive product areas like athletic shoes, circular design can be highly successful. Traditional beliefs may suggest that environmental protection and performance are often difficult to balance, but Air Sole has proven that with practical actions, under the guidance of Cradle to Cradle, innovative design can achieve a win-win in terms of performance improvement and circular utilization. Nike's ability to achieve this groundbreaking result lies in viewing ESG as a driving force for innovation rather than a cost burden. By disrupting traditional shoemaking processes, Nike has overcome various constraints such as resources, technology, and costs, achieving comprehensive innovation in athletic quality, environmental attributes, and fashionable experiences. This also indicates that in the era of ESG, the focus of circular design is not just on products, but also on business models.Systematic reshaping of fashion, industrial ecology and even lifestyles. The success of the Air Sole series has opened a door to a sustainable future for the sports shoe industry and the entire consumer goods sector.Singapore's Water Miracle: The Deep Integration of NEWater and Sustainable Development Singapore is a water-scarce country that has long relied on imported freshwater from Malaysia. In order to achieve water self-sufficiency, the Singapore government launched the NEWater program in 2003, upgrading sewage treatment plants to NEWater plants that convert sewage into reclaimed water meeting drinking water standards for industrial and domestic use. Today, NEWater has become a national symbol of Singapore, setting a global example of sewage resource utilization. Let's decode the secrets of this innovation: Characteristics of NEWater - Using world-leading membrane treatment technologies such as microfiltration, reverse osmosis, and ultraviolet disinfection to remove organic substances and pathogens from sewage - The water quality exceeds the standards of the World Health Organization and the US Environmental Protection Agency, making it suitable for direct consumption - Produces approximately 1.5 million cubic meters of water daily, accounting for 40% of Singapore's water consumption, significantly increasing water self-sufficiency - Mainly used for industrial cooling, air conditioning, and semiconductor industry, enhancing industrial competitiveness - A small amount is used as indirect drinking water input into the water supply system or bottled as promotional items for NEWater distributed for free - Collaborating with local schools for educational tours to promote water science knowledge and cultivate water conservation awareness Significance of NEWater - Technologically, it pioneers a new path from sewage to drinking water, breaking traditional water treatment models - Resource-wise, it transforms "waste water" into high-quality water sources, realizing the resourceful utilization of sewage - Socially, it raises public awareness and acceptance of reclaimed water, paving the way for its promotion - Industrially, it stimulates technological innovations in membrane technology and drives the development of the water treatment equipment manufacturing industry - Globally, it sets a benchmark for water-scarce regions in pollution control and water conservation, showcasing Singapore's soft power - Development-wise, it safeguards Singapore's economy through diversified water sources, embodying the synergy between ESG and growth Implications for ESG in Business - For water-intensive companies, wastewater treatment and recycling are crucial aspects of ESG, with great potential - Develop a comprehensive water management strategy, covering water extraction, use, discharge, and recycling, to achieve reduction, resourcefulness, and reuse - Increase investment in water treatment technology research and development, enhancing water quality and cost reduction through process innovation to lay the foundation for large-scale applications - Proactively benchmark industry best practices, integrate water resource management into corporate culture, and become a conscious action for employees - Conduct supply chain water footprint management, choose water-saving suppliers, and promote upstream and downstream collaborative water management - Respond to the UN Sustainable Development Goal SDG6 "Clean Water and Sanitation," helping alleviate global water crises The success of NEWater demonstrates that, in the era of ESG, even sewage, with innovative thinking, can turn waste into treasure and decay into magic. In the past, people avoided sewage, seeing it as a flood beast; now, with technological advancements and updated concepts, sewage has transformed into "liquid gold" benefiting humankind. Behind this transformation is the foresight and systematic thinking of the Singapore government towards ESG. NEWater is not just a water treatment project; it is a sustainable development paradigm innovation that impacts the whole system. It not only opens up diversified water resource security paths but also drives innovation in multiple areas such as industrial upgrading, technological progress, and ecological civilization construction, integrating ESG into all aspects of national development. This also enlightens enterprises that ESG is not a solo mission but should be a core concept and "new normal" of corporate management, deeply embedded in every aspect of strategy, operations, research and development, and management. Only then can enterprises nurture new opportunities in crises, create new opportunities in changes, seize the initiative in the ESG tide, and win development autonomy. NEWater also exemplifies that the foundation of ESG lies in people. The strategic foresight of the government, the innovative breakthroughs of scientists, the meticulous construction of engineers, and the broad participation of the public are all working together, making the dream of NEWater a reality. For enterprises, the realization of ESG also requires comprehensive support from all sides. It requires unity within the enterprise, consensus building, and laying strong foundations in strategy, organization, processes, and other areas. It requires openness and inclusiveness, embracing constructive feedback, and gathering wisdom in cross-sector collaboration. It also requires a people-centric approach, arousing the enthusiasm of employees and consumers through communication and guidance, making sustainability a conscious pursuit. Deepening Understanding of ESG: How Companies Can "Do the Right Things" The ESG goals have evolved from reducing negative externalities to creating positive impacts, marking a profound paradigm shift. This shift in thinking showcases a deepening understanding of the essence of ESG in the corporate world, indicating a transition from "doing good things" to "doing the right things," from "compensatory contributions" to "generative value creation." Let's unveil the logic behind this transformation: From "Less Bad" to "More Good" - Traditional ESG focuses on reducing energy consumption, emissions, resource conservation, etc., with a mindset of subtraction, essentially minimizing damage - McDonough's "Upcycle" concept emphasizes eliminating negative impacts from the source through innovative design, achieving "zero harm" - Beyond neutralization, it aims to create net positive benefits, such as natural education, ecological restoration, renewable energy, community empowerment, reshaping the relationship between humans and nature through addition - "Doing more good" requires companies to transcend the binary opposition of "profit-responsibility" and achieve a balance between business goals and social values through innovative business models and strategies.The dual drive and symbiotic coexistence of business value and social value. From "defensively reactive" to "proactively innovative" Initial ESG practices were mostly in response to external pressures, such as government regulations, NGO initiatives, consumer demands, etc., with a sense of inevitability and passivity. This often limited to compliance-driven incremental improvements, lacking intrinsic motivation, and difficult to shake existing business models and value creation logic. The transition from "reducing negatives" to "creating positives" requires companies to actively embed ESG into strategic decision-making, leading innovation to reshape value propositions. This means viewing ESG as opportunities for new markets and tracks, actively developing green products, circular businesses, and seizing sustainable development high ground. From "external constraints" to "internal pursuits" Viewing ESG as compliance costs, ethical burdens, easily slipping into the vicious circle of "stakeholder games," trapped in passive dilemmas of balancing interests and value splits. External motivations are often short-lived and difficult to inspire companies' lasting enthusiasm and systematic action. ESG needs to resonate with the company's core mission, vision, and culture. When companies internalize "creating positive impacts" as a value pursuit and responsibility, ESG practices can break free from utilitarian shackles and revitalize. This requires establishing an "ecological worldview," keeping in mind the fate and mutual destiny of companies with the environment and society, in order to inspire an inexhaustible drive for "intrinsic transcendence and self-renewal." From "single breakthroughs" to "systemic innovation" Focusing on operational energy conservation, emissions reduction, charity, etc. as "solo battles" yields minimal results and is prone to short-term solutions. The transition from "reducing negatives" to "creating positives" requires companies to think beyond silos, holistically considering operational, product, business model aspects, and achieving overall transformation in a "tug at one hair and move the whole body" manner. It also requires companies to actively integrate industrial chain perspectives, leverage leading companies' driving roles, collaborate with suppliers, distributors, and other stakeholders to co-create a sustainable ecosystem. It necessitates mobilizing all employees to integrate ESG into the company's strategy, processes, organization, culture, becoming an "all-employee movement" to ultimately achieve a qualitative transformation from "plug-in" to "built-in." As Rome was not built in a day, the elevation of ESG goals is not achieved overnight. Companies need to adapt and innovate according to circumstances, continuously iterate and upgrade in dynamic equilibrium. Benchmarking cutting-edge practices, drawing on multi-stakeholder wisdom, continually expanding the content and extent of ESG, can constantly refresh the imagination space from "Less Bad" to "More Good." How companies achieve true sustainability through a circular supply chain Achieving a closed-loop product lifecycle, creating a circular supply chain, is the high-level goal of ESG transformation for companies. This means starting from the product's design phase, systematically considering raw material sourcing, production, usage, maintenance, recycling, etc., achieving sustainable resource utilization, zero waste emissions in the entire supply chain, ultimately forming a never-ending material circulation from cradle to cradle. This transformation requires multi-party cooperation both internally and externally, let's take a closer look at key initiatives: Product level: Circular design Utilize life cycle thinking, reserve space for reuse, recycling, upgrades at the design stage, ensuring "all waste is misplaced resources." Use non-toxic, degradable materials, maximize the use of renewable raw materials, laying the foundation for materials to circulate multiple times in the biosphere and technosphere. Adopt modular, standardized design, facilitating product repairs, upgrades, remanufacturing, extending product lifetimes. Innovate business models, shifting from selling products to selling services, such as leasing models, making it easier for manufacturers to maintain and reuse products continuously. Production level: Clean processes Establish a production system based on renewable energy, phasing out fossil fuels, achieving carbon neutrality in the production process. Use water-saving processes, improve water resource utilization, achieve complete wastewater reuse, eliminate water pollution. Reduce the input of toxic materials, prevent and control the emission of harmful substances at the source, achieving "zero emissions" of pollutants. Factories meet eco-industrial park standards, enabling production bases to coexist harmoniously with nature. Supplier collaboration: Green procurement Fully integrate ESG standards into the procurement process, prioritize environmentally friendly suppliers. Empower small and medium-sized suppliers to implement ESG management, helping them improve their level of circularity and cleanliness. Create a materials passport platform for suppliers, enabling upstream and downstream companies to accurately match and use materials. Establish a product reverse recovery mechanism with suppliers, enabling the recycling of key materials. Consumer involvement: Cultivating usage Actively promote the concept of green consumption, guide users to consume scientifically and moderately, reduce resource waste caused by overconsumption. Provide convenient channels for consumers to participate in product recovery, such as setting up collection points at retail outlets, regular door-to-door collection, etc. Develop a product traceability app for consumers, allowing them to understand the environmental attributes of products and make responsible choices. Foster an open, inclusive corporate culture, encouraging consumers to participate in product design optimization, and circular mode innovation. Cross-boundary collaboration: Open ecology Collaborate with startups, research institutions to achieve breakthrough innovations in new materials, processes, and models. Actively participate in industry alliances, jointly research and solve cross-boundary supply chain loop challenges. Establish partnerships with governments, non-governmental organizations, academia, etc., to jointly promote circular economy policies, standards, and regulatory system construction. Embrace digital technologies, build traceable, transparent supply chain management systems, achieve full visibility and control of the supply chain processes. Further open up innovation capabilities, introduce ecosystem thinking, jointly create an open, interconnected, shared circular industrial ecosystem. By actively pursuing and implementing these initiatives, companies can move from being defensively reactive to being proactively innovative in their approach to ESG practices and achieve true sustainable development through a circular supply chain.Actively participate in the industry association to develop circular design standards, and promote the formation of green supply chain industry norms. ESG ESG ESG ESG ESGESGESGESGApart from fossil fuel dependence, achieve zero carbon emissions in the production process.materials passport, enabling traceability - Using IoT technology to add electronic tags to each material, recording its attributes and whereabouts throughout the process - Utilizing blockchain technology to ensure the authenticity and tamper resistance of material information, laying the foundation for mutual trust - Integrating material passport data with enterprise ERP, CRM systems to achieve integrated business and financial management - Material passport makes material flow "visible and controllable", facilitating compliance disclosure and enhancing brand trustworthiness Collaborative platform, facilitating sharing - Initiated by the government or leading enterprises, establish a nationwide collaborative material information platform - Platform adopts a unified material classification and coding system, providing a "common language" for information exchange among all parties - Enterprises connect to the platform as nodes, sharing material supply and demand information, and seeking potential partners for collaboration - Based on big data analysis and intelligent matching, the platform pairs companies with the best "material partners" to enhance matching efficiency Reverse recovery, restructuring the supply chain - By tracking product recovery paths through material passports, optimize the layout of reverse logistics networks - Establish a "trade-in for new" recovery mechanism, quickly identifying material quality through IoT technology for pricing convenience - Consolidate decentralized recovery resources through the platform and supply them to remanufacturing companies to enhance economies of scale - Restructure the entire supply chain process through the material collaboration network, achieving a beneficial cycle of "reverse retrieval, forward remanufacturing" Innovation-driven, nurturing new business models - Material flow data supports material innovation and substitution, accelerating green material research and development - Recycled material inventories provide high-quality, stable raw material sources for new material companies, lowering the barriers to entry - Recycling, remanufacturing, and reuse companies develop in clusters, nurturing circular economy industry clusters - Derive new business models based on material cloud services, material Internet trading, etc., creating an innovative paradigm of "material as a service" Ecological collaboration, collaborative creation across boundaries - Material collaboration breaks through industry, regional, and ownership barriers, gathering the collective wisdom and strength of "heroes regardless of origin" - Equipment manufacturers, software developers, system integrators work together to build collaborative networks, achieving cross-border integration - Various sectors of society participate in collaborative network governance and ecological construction through open-source platforms, forming a community of shared destiny - From parks to cities, from countries to the global level, gradually expand the radiation range of collaborative networks, ultimately converging into a global community of shared destiny in the circular economy The information revolution is reshaping all aspects of human society. From personal life to industrial development, from business operations to social governance, the "digitization" trend is omnipresent and all-encompassing. In the field of circular economy, the power of digitization is equally significant. Leveraging information technology to build a material collaboration network is like creating a traditionThe "acquaintance economy" with the addition of "digital wings" not only facilitates the matching of supply and demand, optimizes resource allocation, and improves efficiency, but also promotes the sustainable concept of maximizing the use of resources and talents. This is a "green revolution" lit up by information, and a "great creation" that reconstructs the relationship between people and materials, and people and nature.ESG recommended official link Tong Yixing