Our work with small businesses across the Duck River industrial precincts west of Sydney, has taught us that many small businesses are way ahead of governments in their sustainability thinking and appetite for immediate action. Small is beautiful, and it can often seed something big. We came across the following example of this during our research for the Streamline program. It is a great example of something that started out small, becoming bigger over time, and having a positive environmental impact over a large region.
Comprising 22 municipalities and located on the Gulf of Bothnia, about 320 kilometres north of Stockholm, Sweden’s first “BioFuel Region” was officially recognised in 2005. The Swedish Government proudly proclaimed that the country would become the world’s first oil-free economy and that the BioFuel Region, where low-emission ethanol is as readily available and economical as ordinary petrol, showed how it was leading the way. Our first assumption upon hearing this might be to credit the Swedish Government with foresighted policy making, which enabled research, government subsidies and the mobilisation of public servants to work alongside businesses in the region to transform its economy. But this is not how it happened.
The origins of the BioFuel Region can be traced back to the commitment and dogged determination of one small business owner, Per Carstedt, who had spent some years living in Brazil before returning to northern Sweden to take over a large Ford dealership established by his father. While in Brazil he attended the 1992 Rio Earth Summit, after which he grappled with questions about the future of cheap energy and the impact wide scale environmental changes would have on industrialised economies like his own. In 1995, Carstedt imported three ethanol cars from Ford’s fledgling small-flexible fuel vehicle program in Detroit. The odds against him establishing a market for these cars in Sweden seemed insurmountable at the time. Over the next five years, Carstedt teamed up with Sweden’s BioAlcohol Fuel Foundation and travelled from city to city enlisting interest and support. Eventually they formed the first buyers’ consortium comprising 50 municipalities, companies, and a number of individuals committed to buying 3,000 cars. The next challenge was to persuade petrol stations to install ethanol pumps. A vigorous campaign ensued without government help, starting with two in the late 1990s and reaching a hundred by 2004. “The first 100 stations took ten years to develop,” Carstedt reflected in 2005. “Nowadays we add 100 stations every three months.” (Christensen 2005)
Per Carstedt used his entrepreneurial skills and business acumen to instigate a new fuel industry in Sweden. From there he went on to tackle the industrial ecology of his own backyard. Starting with a new branch of his own family car dealership in northern Sweden, he built an environmentally friendly facility that was energy efficient and recycled all wastewater. This initiative eventually extended to adjacent businesses where systems for waste exchange were established enabling, for example, the piping of excess heat from restaurant kitchens to the heating systems of the nearby car dealership and gasoline station. Dubbed the “Green Zone”, energy use dropped by 20 per cent against other comparably sized retail neighbourhoods and attracted 500 official study visits between 2000 and 2006. Green Zones have now sprung up in cities across Sweden and throughout Europe, in part inspired by the actions Carstedt and his allies had the courage and foresight to pursue without government intervention or regulation.
serious systems change needed
No one knows exactly when increasing carbon dioxide emissions will tip the planet into chaos, but many scientists argue that severe environmental consequences are inevitable if we do not change our ways. Currently, around eight billion tonnes of carbon is emitted each year through fossil fuel burning alone; three billion tonnes is absorbed by land and ocean, leaving a net increase of five billion tonnes annually that is not absorbed by biomass like trees, plants and plankton, or dissolved in oceans. It is feared that this “stock” of atmospheric carbon will cross a threshold where the climate changes it produces will have irreversible and devastating effects on humans, animals and habitat. Scientists argue that to arrest this trend will require a 60 to 80 per cent reduction of worldwide emissions in 20 years – the 80-20 challenge facing our society.
As Senge et al note in their paper The Next Industrial Wave, the 80/20 challenge will require more serious systems changes than the minor adjustments that have so far occurred. The sheer number of small to medium businesses across the developed and developing world, would suggest that they will play a significant role in the scale of transformation required. While no one can take on a challenge like this alone, “sustainability innovators must learn to foster engaging conversations that build mutual understanding and the ability to work together.” (Senge et al 2008). People like Per Carstedt and other business leaders like Ray Anderson at Interface Carpets, have demonstrated a consistent sustainability focus that has seen them start such conversations and take them to new places, including the development of new products and services. In doing so, whole supply chains have been reinvented, new markets created, and substantial reductions in carbon emissions achieved.
References
Christensen, L. (2005), “Formation for Collective Action: The Development of BioFuel Region,” Visanu Case Study, Sweden
Senge, P., Smith, B and Kruschwitz, N. (2008), “The Next Industrial Imperative”, Strategy and Business Magazine, Booz Allen Hamilton, Reprint Number 08205