Prof Steve Evans, director of research at the Centre for Industrial Sustainability

How do you increase economic growth while simultaneously reducing resource consumption?  Companies demand growth so they need to sell more stuff, so they make more stuff, consume more stuff, and so use more energy. Show me a company that makes more money from consuming less material. And how do we make plastic when the oil runs out?

Are any organisations, let alone politicians, really seeking to solve this tangled enigma beyond well-meaning words? Steve Evans’ community is trying.

Evans heads up the Centre for Industrial Sustainability (CIS), with sponsorship from the Engineering & Physical Sciences Research Council (EPSRC) and input from four UK universities - Cambridge, Cranfield, Imperial and Loughborough - is five years into its mission to redesign industry to be more environmentally sustainable while minimising economic concessions like growth and profit. Early on, the Centre divided the subject broadly into three parts: Eco-efficiency – the more efficient use of resources like water and electricity; Eco-factory – developing smart, resource efficient factories and whole industrial system redesign. Efficiency comes first.

”This is the big one, the blue-sky thinking where, for example, entire industries run off energy that is generated on-premises and renewable, where sports footwear is dissembled and 100% is reused in the next product, where there is genuinely zero waste to landfill

“We know the one or two per cent of companies who have finished the efficiency journey, but we cannot take them to be the norm. Part of our research is about how to get the other 98% on the journey,” said Prof Evans in a 20-minute breather before introducing Day 2 of the centre’s 3^rd annual conference, this year at Fitzwilliam College, Cambridge.

The EPSRC Centre for Industrial Sustainability (CIS), which pools the resources of over 60 researchers and has helped over 200 companies to be more sustainable, including companies like Asics, Marks & Spencer, Toyota and Unilever, is working hard on all three pillars.

But it is the third arena, industrial system transformation, which both excites and confounds Evans and his researchers. This is the big one, the blue-sky thinking where, for example, entire industries run off energy that is generated on-premises and renewable, where sports footwear is dissembled and 100% is reused in the next product, where there is genuinely zero waste to landfill.

“You can imagine this is an intellectual fun park. Who wouldn’t want to rethink the entire industrial system?

Steve Evans

“Academics always like the next sexy subject – system transformation and value transformation are the next big intellectual subjects,” says Evans with total conviction, adding that his Centre is doing very interesting things with those top 1-2 per cent of companies in this field. “This is an intellectual fun park. Who wouldn’t want to rethink the entire system? The PhDs quickly volunteer for this in year one, but by the second year they all wish they had bitten off something… less enormous,” he warns. This field is hard, with business survival and profitability always taking priority over an agenda still seen by many as nice-to-have.

Postgraduate work in this field is ambitious. Researchers at the SMART Centre at Loughborough University investigate zero waste manufacturing and material efficiency. Other members of the community such as companies Vitsoe and Rupe Office remanufacture furniture and one company, Elvis and Kresse, is making luxury handbags from waste fire hoses that would otherwise become landfill. Dr Doroteya Vladinirova of the University of Cambridge has developed a multi-gate business model transformation for sustainability, a complex tool kit that takes any company from current state to truly ‘sustainable’. Definitions and expectations come into play here.

Evans has a lot on his mind – he’s positive but also seems frustrated, with the urgency of this agenda, and makes sure the audience knows it when it’s his turn to speak. “Many of the people in this community are aware that the external clock is ticking, and they want to move on,” he says in reference to the system transformation that industry needs.  But such a radical notion, requiring more cross-business system collaboration and communication, is a mountain for many companies to climb.

Whether the CIS team got a cool response with the direct approach of selling whole industrial transformation, or whether the strategy was deliberate, CIS has focused more on the concept of value exchange rather than pushing the word sustainability. “The most lively area is the massive increase in people wanting to try out new business models. A business model for us is the logic of value exchange,” says Evans.

Talk to companies about value, it seems, and you push on an open door. Consider value for the stakeholders in society. “We have learnt to understand where the value exchanges fail with all six primary stakeholders; the People – separated into Customers, Suppliers, Staff and Society – Planet and Profit, “ he says. “Look at what value exchanges are failing between these six and you see a lot of value opportunities. This group want X but they are not getting it, which provides a business for another group. Another group doesn’t want Y but we are giving it to them, so why are we over-delivering?” The rate of enquiry about value exchange has surprised the Centre. “It wasn’t a core part of the Centre originally, but it is the one that has surprised us the most. People are knocking on our door about new value models with the most vigour and acceleration.”

A value exchange approach to manufacturing trains people to reconsider generally accepted truths, such as recycling. Recyclers are good at reclaiming value up to the level a low-to-high grade raw material, but they still return it into a material. “The real value of a thing has design value, product value, use value. Material has no usage value,” he says. Bad sustainable practices include the unintended consequences of clothing reuse when good Western clothes are dumped in Ghana. “The native Ghanaian garment industry has virtually collapsed because they get so much good stuff from places like Britain. We must be careful about systemic consequences,” says Evans.

”’The Next Manufacturing Revolution’ says that if companies in the UK achieved 50% of Toyota’s resource efficiency, they could generate £10bn more profit, that is a 12% profit increase for manufacturing, and create 300,000 more jobs

The sustainability agenda today must talk the language of business. In 2013, with Lavery/Pennell, 2Degrees, Barry Sheerman MP and partners the CIS launched the Next Manufacturing Revolution, a study that examined how product, not labour, efficiency could add huge value to the UK economy. “Non-labour resource efficiency remains the first and foremost thing we can do. If this was the only thing the UK did, and Toyota just watched people catch up with it, I would be a very happy person.” The Japanese carmaker remains one of the Centre’s best case studies for resource efficiency.

The Next Manufacturing Revolution says that if companies in the UK achieved 50% of Toyota’s resource efficiency, they could generate £10bn more profit, that is a 12% profit increase for manufacturing, and create 300,000 more jobs. Also 27 MtCO² emissions would be saved per year, equivalent to 24% of the manufacturing sector’s total greenhouse gas emissions. It’s a compelling story – the challenge for Evans and Co. is to reach the 98%.

But is complete industrial system redesign a fantasy world, one that big business is never going to embrace? Real business operates within parameters, whether right or wrong, that promote heavy resource consumption. “It is not fantasy to stop being wasteful,” says Evans. “Being wasteful is simply too cheap and so people do it systematically. Let’s collect the £10bn extra profit before we complain about fantasy.” When business operates more in the value exchange paradigm, Prof Evans believes, there will be more natural demand for 100mpg cars than gas guzzling Chelsea tractors.

“The fantastical stuff then comes in to it when we try to imagine operating within limit conditions that actually exist, those set by the planet, non-negotiable, that cannot be delayed or purchased.” Such absolute limits were back in the news just a few weeks after this interview when US President Barack Obama made addressing climate change the big priority for his remaining presidency.

The future is a mixed bag. While the CIS centre is growing and there is much more corporate traction than 3-4 years ago, Evans knows that he may be forced to make up to 60 redundancies as the government changes the funding system for these engineering research centres, where he has perhaps a 50:50 chance of winning the new bid, he says. What an irony if the research field that could save industry wholesale in the long term is passed over for research that, while exciting, generates a short-term manufacturing process improvement.

(This interview was given at the EPSRC CIM in Industrial Sustainability annual conference at the University of Cambridge on July 6th)