Fortum
Electronic waste in a circular economy
Building a roadmap for the future of e-waste, transitioning their business model to a self-standing, regenerative, and sustainable business.
CLIENT
Fortum
TIMELINE
5 weeks
PROJECT TYPE
Systemic Design, Strategy, Sustainability
MY ROLE
Design Lead
CORE TEAM
Allison Bouganim, Louis Collet, Laura Rojas, Maria Boix
Aligning the business goals of Fortum with the needs of our dying planet
Fortum Oyj is a Finnish state-owned energy company located in Espoo, Finland. In addition to Finland, it is focusing on Germany and other countries in the Central Europe, Great Britain, and the Nordic. Fortum operates power plants, including co-generation plants, and generates and sells electricity and heat.
PROBLEM STATEMENT:
E-waste is the fastest growing waste stream in Europe and globally. Every year, the world produces 50 million tons of e-waste, generally weighing about 4,500 Eiffel Towers. Only 20% of consumer electronics are recycled, and there is an annual generation of 52.2 million tons of e-waste.
OPPORTUNITY:
We can unlock $4.5 trillion of economic growth from leveraging the circular economy, explicitly focusing on e-waste. As well as be the leader in this space.
HOW MIGHT fortum:
…reinvent the concept of waste management?
...make it easier for customers to make the best and most informed choices? ...help other companies transition from a linear to a circular economy?
DELIVERY:
We delivered a strategic roadmap that set the stage for current industry trends, customer demands, and a vision for the future. Next, it detailed the vision of Fortum as a service, highlighting new business models and operational directions. Afterward, we detailed the technology needed to undertake this transformation and lastly explained internal shifts around company culture and dynamics that will need to take place.
The WEEE Problem (Waste from Electrical and Electronic Equipment)
Every year, the world produces 50 million tons of e-waste. That’s the weight of about 4,500 Eiffel Towers.
WEEE In the world...
Every year: 50 million tons [4,500 Eiffel Towers]
Projected 2021: 52.2 million tons [4,698 Eiffel Towers]
Illegally shipped to developing countries: [3,400 Eiffel Towers]
WEEE in the Nordics
Norway has the highest per capita generation of e-waste in Europe– approx. 28.5 kg/capita, followed by Denmark 24.9 kg/capita, Sweden 21.5kg/capita.
Even though collection rates are high, a study in Norway showed approx. 10 million mobile phones are kept in households without being used.
About 60% of Norwegians own more than 2 phones that are not in use.
Although idle devices do not cause much harm to the environment, they represent a lost opportunity of re-selling or donation to offset the impacts of producing new devices. Moreover, idle devices represent an underutilized resource stock that could be turned into valuable materials for the industry.
The real* problem
The UN has warned that we only have 11 years to limit climate change catastrophe. The world is currently 1°C warmer than preindustrial levels. We have ten years to limit warming to 1.5°C.
That’s the point of no return. Scientists now forecast that the world will be 5° warmer in 2100, and that’s taking into consideration the current emission mitigation policies.
The Earth has another problem too. We are depleting it of resources and giving it no time to regenerate them.
This year by July 29, humanity had used its natural resource budget for the entire year. But if European consumption were the global norm, the Earth’s yearly budget would have been exhausted on May 10, not July 29. Denmark March 29. Sweden April 3. Finland April 6. Norway April 18.
That means it would take 2.8 Earths if everyone lived like the Nordics.
Resources [lack of] are a bigger problem than waste.
This diagram was created by the ellenmacarthurfoundation.org
A circular economy is a systemic approach to economic development designed to benefit businesses, society, and the environment. In contrast to the ‘take-make-waste’ linear model, a circular economy is regenerative by design and aims to gradually decouple growth from the consumption of finite resources.
The least valuable loop just in the smartphones market could be worth up to $11.5 billion.
Globally, the circular economy could unlock $4.5 trillion of economic growth.
The Electronics industry & Circularity
Apple announced that all its facilities are running on 100% renewable energy.
Many Apple suppliers have now signed a pledge to get to 100% renewable energy for the Apple-related proportion of their business.
Dell is one such company embracing recycling by design, developing products to recycle as many parts as efficiently possible, eventually.
Richard Branson has created the Global Cooling Prize, a $3 million competition to spur new technology to create more sustainable air conditioners. And the Finnish government has set a strategic target to become a forerunner in the circular economy.
A new wave of regulations regarding sustainability and climate change is on the horizon.
The Opportunity
Fortum will expand its recycling offering to become the top-of-mind consultancy to assist and educate manufacturing companies to transition from linearity to circularity.
Make Fortum the leader and the trusted expert.
Not competing for market share, but creating an entirely new market space.
Launchpad
The world is evolving, and with this change comes new issues, trends, and opportunities. As the energy leader in the Nordics, while having an emerging recycling offering, Fortum has the opportunity to scale efficiently and build on the Fortum of tomorrow.
There is no looking back, only moving forward
Fortum can leverage many of its existing strengths to radically tackle the future of its green business while thriving in a circular economy. Alternately, it also has large opportunities for improvement. It's critical to have a holistic understanding of these opposing muscles to accurately map these points.
Sustainable business - circularity
The global trend across a broad range of industries (retail, energy, finance, furniture) is carbon neutrality by 2030 and embracing circularity.
Fortum is not only a recycler service, it’s a leader
A good vision is a direction that tackles and understands the industry direction while establishing and building the future.
- The leader of treatment and collection of waste and e-waste in the Nordics
- The leader in decarbonized energy bringing the most efficient solutions for companies to transition into renewable energy.
- Build the strongest structure and knowledge to play a central part in the circular economy process.
- Be a pioneer in sustainable transition and lead the change of the industry and legislation.
From a product company to a consultancy service
For Fortum to be embraced as the industry leader in circularity transformation, it has to first work towards being the most trusted and well-positioned partner in the consulting landscape.
Business model transformation
With the commoditization of products, it’s not enough to just offer a single solution. Fortum needs to be both, the solution AND enable other companies to grow and scale, by using Fortum as a service. This will enable Fortum to evolve and lead others by example.
Adapting to change when you still have a choice
Transformational leadership is about preserving the core while creating the new. Digital business transformation can be seen through two lenses: (1) technology and (2) data & analytics. Technology: Netflix worked with Amazon to develop a world-class back-end infrastructure.Data: understanding the customer and offering data-rich, personalized and recommendations.
Utilizing products to build the reputation of your service
To achieve the larger goals of establishing trust & being seen as the industry leader, Fortum needs to invest in products that deliver on core customer needs & desires while also managing BD goals. We recommend transitioning from developing products to offering services.
New models come with new opportunities
Circular economy, understanding and tracking the supply chain, Fortum developing a blockchain- backed passport. Additionally; consultancy fees, partnerships, consultancy fees, membership- based certification, and a material marketplace.
Dual streams for visions of trust & leadership
With the commoditization of products, it’s not enough to just offer a single solution. You as Fortum need to be both the solution and enable other companies to grow and scale, by using you as a service. This will enable Fortum to evolve and lead others by example.
Orchestration
To achieve transformational goals and fully disrupt an industry, you need top talent and strong leadership. Fortum needs to be an in sync living and a breathing machine that tracks and measures progress internally and is aware of the global content of regulation and movements externally.
Knowledge drives a circular economy ecosystem
To scale Fortum effectively, data and product traceability are imperative. Also, the transition from a linear economy to a circular economy is required to sustain longevity and business growth.
Measure impact, learn, and accomplish key business goals
It is fundamental to align and stick to the plan, while also monitoring key indicators that ensure the progress of Fortum’s business goals.
Upper management and innovation leading the change
For Fortum to be the industry leader, first company leadership needs to align and embrace its new business model. The value proposition of the company needs to be understood and endorsed by everyone in the entire organization. The pilot will introduce and create a compelling story, for maximum buy-in.
Become a proactive leader in sustainable change
Sustainability is a necessity. Fortum has the opportunity to consolidate its knowledge, and provide advice to address other company's needs. By being the first, Fortum has the best opportunity to lead regulations by example and set its terms for the circular revolution.
Enablers
Success depends on enabling people to use technology and data to make better decisions and innovate more rapidly.
Your data is your knowledge - Optimize it!
Today, Fortum tracks the product until the redistribution phase, which is only half of the process. To be able to provide certificates and efficient sustainable solutions for companies, Fortum has to improve its tracking process for the rest of the supply chain.
Capture the full value of your data
To be trusted, Fortum can utilize the blockchain to track products in its supply chain, while recording the data and analytics on the hyper ledger passport. To best leverage this data, Fortum needs to concurrently optimize its robust translation of data visualizations.
Build your team and support it by strong partnerships
Fortum will support a small pilot team dedicated to recycling and energy, on the search to optimize and innovate. Concurrently, Fortum will introduce the blockchain concept, in partnership with IBM, and data visualization will be supported by Neo4j.
After the initial results, Fortum will fine-tune, and then roll out the same process with the entire ecosystem of traceability. This will include the main actors: Dell, Microsoft, Apple. Once fully trusted and informed, Fortum will move into the consultancy space and offer certifications, similar to LEED or Cradle-to-Cradle.
Trust your company and your teams
To effectively support and engage talent within the innovative company culture, agile cross-functional teams need to be introduced. This team structure will allow for ideas to thrive and will increase the desired addition, development, and engagement of employees.
The Value
Earth’s value: putting an end to depletion and allowing regeneration.
Fortum: your Blue Ocean, your own market share.
Brands & Manufacturers: Adds to the good reputation of Fortum while also creating new revenue streams.
End-users: an Earth to live in. Information to make informed decisions about electronics purchases.