Every Product-as-a-Service needs a product in the first place. A well-designed product supports the success of the subscription proposition.

The Cradle to Cradle school of thought paved the way for circular thinking in product design. Products should be designed so that their materials and components can be repaired, repurposed, or recycled indefinitely.

In this episode, Nora Sophie Griefahn, Co-Founder and Executive Director of the Cradle to Cradle NGO connects circular product design with Product-as-a-Service.

This episode is the ninth in the series PaaS Decoded, 16 conversations about the fine details of product-as-a-service.

Video Impression

People

Nora Sophie Griefahn, Co-Founder & Executive Director Cradle to Cradle NGO

Patrick Hypscher, Co-Founder of Green PO, Expert in Sustainable Business Models

Chapters

00:00 Intro
01:32 System change over personal behavior
02:32 The relation of cradle-to-cradle and the circular economy
06:53 A high quality of products is needed
10:31 Cradle to Cradle organisations and layers
12:42 Starting to think about the problem first
15:58 The benefits of Product-as-a-Service
20:51 Freedom to circulate across multiple spheres
27:12 Water Meters and wood for terraces as examples
31:05 A call for regulation allocating the true costs of mining virgin materials
33:58 A call for changing the whole company
35:42 Towards a combination of PaaS and suitable product design

About Cradle to Cradle NGO

The Cradle to Cradle NGO (C2C NGO) is a non-profit, non-governmental organisation based in Berlin that is committed to the dissemination and implementation of the Cradle to Cradle concept.

Further Links

https://c2c.ngo
https://c2c-congress.org/en/
https://www.lorenz-meters.de/
https://www.novo-tech.de/

Transcript

Nora Sophie Griefahn: We need to match the product quality and the product design with the new business model. And not only the new business model with the old product or the new product without a business model, but these needs to go along.

Patrick Hypscher: Welcome to the 9th episode of PaaS Decoded. 16 conversations about the fine details of product as a service. In the last episode, Mitja Sadar spelled out the steps Grover made to finance 2 billion Euros in assets. In today’s episode, we learn more about the relation between cradle to cradle and product as a service.

Patrick Hypscher: She studied environmental science and technology in Lüneburg, Vienna, Copenhagen, and Berlin. During her studies in 2012, she co founded the Cradle to Cradle NGO, which she leads as executive director and member of the board. She’s a jury member, for example, of the German Sustainability Award, a passionate author and versed speaker on Cradle to Cradle and the performance economy.

Welcome, Nora Sophie.

Nora Sophie Griefahn: Hey.

[00:01:32] System change over personal behavior

Patrick Hypscher: Nora Sophie, let’s start with a personal question. What are your favorite subscriptions you actually use yourself?

Nora Sophie Griefahn: Oh, I think that’s a tough question. I think actually also, I mean, of course we can talk about personal things, but overall at the end, we really need a system change. And I mean, there are a lot of things that I’m, I’m doing as well and cradle to cradle that I’m also using in the yeah, in my, my everyday life. But think it will not help us if we only change our own behavior and change yeah, what we are doing, but we really need to get to a place where we have a system change and then actually it’s not a matter of if I want to live a cradle to cradle life, but if I live in a world that is actually only the possibility to do so.

[00:02:32] The relation of cradle-to-cradle and the circular economy

Patrick Hypscher: Yeah, cool. Let’s, let’s stay on that rather high level on the system level. Could you describe a bit the relation between cradle to cradle and a circular economy? Because not, although many experts come across the concepts, it’s not always clear to them. And I guess you’re one of the best to clarify that.

Nora Sophie Griefahn: I think you could say with cradle to cradle, we are talking about a quality framework on a circular economy that is actually also taking into consideration what kind of impact we do with our work. So actually, it’s not only talking about getting everything circular, but actually starting with the question, yeah, behind to think, what do we actually need to do to have a positive impact and how can we actually yeah, be part of this positive impact and then, yeah, for us, a circular economy and also the cradle to cradle design framework, is a way to get there.

And if we have this in mind, then also our perspective on the circular economy is going to be a different one because it’s not only about taking everything we have into circles and doing it at the end, somehow dealing with waste, trying to close the loop, but actually starting from the beginning to think about why are we doing products? Or why are we actually producing products? Why are we doing things like we do? And is it actually the way we should do, or should we do it in a different way?

Patrick Hypscher: Okay. So, so there are three. Let’s say aspects. One is the why. So what are our needs? What are the problems we want to solve? And how do we want to live a good life? If you also want to say so. And then you have a couple of instruments. And one is a circular economy, one is also the cradle to cradle design approach, and there are others.

Nora Sophie Griefahn: No, I would, I would say, and the cradle to cradle design approach is actually an approach to get to a circular economy. The circular economy is not the goal. And sometimes when we talk about circular economy, people think that’s the goal to, to come to a circular economy. But for cradle to cradle, we see a circular economy only as a tool and to get to a impactful way of us humans being part of this world actually. So. We think it’s possible to, to use a circular economy for that, but that also means we need to think about what kind of circular economy and to have a quality understanding about it. So actually in Cradle to Cradle, it’s really important to talk about the design phase and how we are actually using design to get into a circular economy, it’s also important to talk about what kind of material we are using.

So we’re talking about material health, that we are not having toxic materials into circles. And then we also don’t forget to consider that how we are producing products, how we are actually using land, water, soil. That’s also part of what we have to consider in this yeah, In this way of looking at things and so it’s not only about a way of, yeah, sometimes circular economy is talked about on how we could actually deal with our waste or deal with what we have at the end.

That’s not actually used anymore but actually a holistic framework. And I think there are people out there who would call it, exactly what we do, circular economy, and that’s fine as well, but there are also people out there who aren’t actually talking about circular economy and just talking about, yeah, recycling.

And so for me, I would say it’s like, it is a, yeah a way on. Having a quality framework for a circular economy and a way on how we can actually look at a economy and at system change.

[00:06:53] A high quality of products is needed

Patrick Hypscher: You mentioned it’s important to talk about the quality we want to achieve. Can you specify that what might also be like a good example? Is it just this high quality that’s desirable? And what might be a bad example?

Nora Sophie Griefahn: Yeah. I mean, there are a lot of examples out there where people try to use waste to make something out of it. But actually we need to look at on what kind of material we are using and what kind of material we are actually keeping in two circles. So.

We should definitely look on the, yeah, the beginning and the design phase to see what kind of materials we are actually putting into the streams and therefore yeah defining actually what gets in there makes a lot of difference in an understanding of quality of what kind of yeah, quality we are using for this circular economy.

So for us, it’s really important, like I mentioned before, to talk about material health, for example, to see, okay, if we have a t shirt, we are wearing it on our skin every day. So we should design it in a way that it’s actually made for skin contact. And it’s not enough to, for example, use 100 percent cotton. And then saying, okay, yeah, you can recycle cotton and we just have it in the cycle, but there’s all these yeah, colors and materials that you’re also using to produce a t shirt that is not cotton. And to see, we should define them as well. We should define them as material in a material health perspective to see that they are good for skin contact and that actually also at the stage where they are produced the people are not suffering from producing these materials. So yeah, having a bit of broader view on yeah, these ideas and not only looking on the perspective of circularity.

Patrick Hypscher: Okay. So actually it’s about what kind of products do we keep in the loop? And, and how do they meet certain quality standards, both in in social, but on environmental aspects.

Nora Sophie Griefahn: Yes. And all these aspects. And I mean, especially on why are, why am I producing these products? For example, I mean, when. When we had the first shoes on the market, they were produced to actually help people to have something that their foot are not being cold. So actually that was the idea. And we have, I think we have to go back to that to see why are we producing things.

Today, a lot of shoes are getting produced to just being sold. So actually, yeah. Why are we producing the shoes? Not to sell them, but actually to work on the matter that we have cold feet and we should actually yeah, have something to cover them or, I mean, there are also another aspect of course, but to get, yeah, step back one step and to see why are we doing things and then we can actually figure out much better what kind of products and materials we need to fulfill this needs.

Yeah.

[00:10:31] Cradle to Cradle organisations and layers

Patrick Hypscher: So we said like circular economy is a wide field with different understandings and also cradle to cradle comes in different shapes.

The way I perceive it and now correct me if I’m wrong, I’m probably wrong, but the way I perceive it is it’s a design and product design, philosophy. Full stop.

Then it can be certified by the Cradle to Cradle Products Innovation Institute.

And there are different organizations pushing forward research, consulting, but also civil society and general awareness and extend, of course, to that concept. And, and then of course you get multiple perspectives on it.

But would that roughly fit it or what would that look like?

What’s cradle to cradle or what are the layers of cradle to cradle?

Nora Sophie Griefahn: Yeah. I mean, I think there, a lot of what you, what you said is matching it quite well. In my perspective, we, when we talk about cradle to cradle, we are talking about a school of thought. So we are talking about a way on how we are looking at things. So having this school of thought in mind, then we can actually use the design concept to produce products, but we could actually use this school of thought also for different other fields where you’re not producing anything, for example, where this would also work, this kind of thinking to think about, okay, what is the impact we’re having, how we can actually Go away from the thinking that we should have less negative harm to come to a thinking where we can actually have a lot of positive impact.

Starting with this, we can actually use the cradle to cradle design framework to produce products that are made for yeah, really getting into a circular economy, but of course we also need to talk about business models, how we actually getting back these materials. And there’s a lot more we also need to put into consideration by talking about how we can actually close the loop and how we can actually go into a cradle to cradle world.

[00:12:42] Starting to think about the problem first

Patrick Hypscher: You’re frequently mentioning the importance of business models when it comes to, let’s say, also using the, the product. Are there any business models that work particularly well together with cradle to cradle products.

Nora Sophie Griefahn: Yeah, of course, there are a lot of business models. For example, I mean, talking about product as a service, that could be something that we could actually use quite well to, to talk about how we can get these materials back and how we can close, close the loop.

But also we need to think about, like I said, why are we producing something and how can we get there?

And sometimes you maybe have to start from a different point where we’re actually getting Not selling any products anymore, but actually using a different way of getting there. For example, coming from the idea of having a car to actually talking about mobility and how we want to get to places.

And that could be, of course, a product as a service system for a car, but it could also be having a totally new mobility and just having mobility as a service or talking about other ways to get this need of mobility.

Having these in mind, thinking about why are we actually asking for a need before we are talking about the product.

Patrick Hypscher: And when you work with organizations? Do you see certain approaches that are more frequent, more popular, or this is what you normally start with and then you approach higher levels?

Nora Sophie Griefahn: I think there are a lot of layers we need to talk about. Of course, we need organizations to change. We need companies to change their business models, to change their products.

But of course we also need policies to change and we need that we, yeah policies that actually work on having it easier to produce in a cradle to cradle way instead of how it is now that in a lot of ways it’s more difficult to do so because of legislation. So thinking about this, there yeah, ways that need to change and we need education and yeah, change of mindset that we actually live in a world where, where it’s much smarter to just use some things instead of having them. Think this change is already quite, yeah well starting, but not everyone is, yeah, is, is there, but I think we are, we’re on a quite good pathway to get there, but of course, all these needs to go along and we, we cannot say, okay, it’s the one side that is actually has to go first, but all of these parts have to yeah, go ahead.

Patrick Hypscher: Yeah, yeah, definitely, definitely. I already reserved some time for regulation.

[00:15:58] The benefits of Product-as-a-Service

Patrick Hypscher: Before that I’d like to get your perspectives on the business models. We mentioned already product as a service but there are also modules related to that, be it take back systems, deposit systems, sharing platforms, repair services.

Yeah. And, and of course it starts with the product and the design and the philosophy behind. Yeah. But there also warranty extensions. Is it that some of them work better especially when it comes to created to cradle inspired and even certified products, or is it really an individual case

Nora Sophie Griefahn: I think, yeah, you can talk about that actually product as a service systems could work quite well because you’re then not giving away the products anymore. And by talking about, yeah, systems where you’re actually still selling the material, then it’s always the question how you’re actually getting sure that you’re getting these products back at some point, or that these products are really getting into a loop.

But I think other systems could work as well. If you, for example, why should, should a company own the material, for example, if you could also think about that yeah, countries or groups of people are owning material who are actually working on how to get it back.

And therefore, then you would not only need to work with services, but you could actually, of course, work with deposits or something that are maybe so high that you actually know you will get it back in the circle.

Right now, a lot of systems are not actually, yeah, really closing the loop at the end and are not holding these materials into spheres.

And I think so, it’s so important to change yeah, these business models for companies that they have an interest in getting materials back because it’s cheaper to not losing them, to not buying virgin material anymore, but actually knowing where the material ends and so I think that’s why product as a service systems make so much sense for cradle to cradle companies to implement.

And I think there’s still way too less of them actually using it in a way that we should use it.

Patrick Hypscher: Let’s stick to that one because a example that is frequently mentioned also in the, in the cradle to cradle literature is the one of washing machines, of home appliances and I think we can acknowledge that all major manufacturers explore that field, with Bosch Siemens at the forefront, but also Miele explored that, Whirlpool did that Electrolux kind of does, V-Zug.

Despite commitments and millions of investment it’s not a mainstream solution yet. Yeah. Yeah, why do you think is that.

Nora Sophie Griefahn: Actually, I think all these companies, they are exploring, yeah, like you said, but they are just renting their product. They’re not actually implementing new business models on how to actually produce a different product that is actually made for taking it back. It makes more sense to take a product back that you can actually bring back into the loop again, but that’s not happening. It’s just another way of marketing right now. And so in my perspective, we really need to change the, yeah, the product and make it a circular product by design, make it a cradle to cradle product, then we can have a lot of, yeah, positive aspects for our company as well, to get this material back and to get it back into yeah, our systems.

But this is only working if I produce my product in a way for that. And I mean, we see companies that are actually producing cradle to cradle products, for example, carpets, and that are actually made for really getting them back into yeah, systems and they take it back, but they only take it back with a bit of refund and so on, but they don’t have a real business model.

So we need to match the product quality and the product design with the new business model. And not only the new business model with the old product or the new product without a business model, but these needs to go along. Otherwise, we will not get to a point where we, where we can really circulate our materials and products.

[00:20:51] Freedom to circulate across multiple spheres

Patrick Hypscher: how do you, how do you see the aspect of logistics and specific, let’s say product related context factors? Having led one of these business for five years I say the product design is not the key challenge right now.

Yeah. It might be in a, in a second or third step. Sometimes you do have challenges and we come to regulation in a second. Yeah. Because I, I guess I agree there with what you announced already. But what makes it especially hard for some products to circulate, are the logistics costs. It does make a difference when you have a smartphone or something small, you can ship pretty easily compared to a larger device, be it a fridge yeah, the, the first cradle to cradle fridges out there already, or be it washing machines that need heavy delivery and that pretty costly. And that makes it really, really expensive for all players to keep them in the loop. And repair is not among the top three, maybe not even the top five relevant factors to make that a large scale available. Yeah, it does work in, in for a couple of audiences that, that for sure. And it will probably work for more, but if, we want to reach the main market, we want to change the dominant consumption pattern. Regulation has a role, but also especially logistics, is a limitation factor.

Is this something that is incorporated in these thoughts?

Nora Sophie Griefahn: I mean, I think right now we are in a way that when we talk about circular economy, we, and closing the loop, we always think that the company was actually producing something. Should take it back and a refrigerator should become a refrigerator again.

But I think we need to broaden up these thoughts into the way that we talk about spheres where materials can circulate and then we would also have different ways of logistics to get there So, I mean, a refrigerator doesn’t have to become a refrigerator again, but only if it’s designed in a way that we can actually use the material for something else quite easily. Then, I mean, if we need to, if a refrigerator is made in China, of course it’s difficult to get it back to China to make a new refrigerator out of it. But if we see this material is here now, and we could actually produce a different product out of it right here, for example, the machine who is producing the something else. Then this could be interesting broaden up the idea of circulating in, inside a company, but circulating into spheres.

And of course this takes energy as well to change our product into different products. But yeah, for these, for these materials that are actually not only repaired, because of course it would be much less energy and effort to just repair a refrigerator. But some products are not able to being just repaired. And so maybe we also have to yeah get away from this thought only talking about a refrigerator, but talking, for example, about textiles, where we can see it’s not the way that a t shirt should actually always have to come back to this one t shirt company, but that we can actually have this material cycled in a sphere where we can actually use it for different other products in a value chain. And to always see the product at, at the end of the usage phase is not waste, but it’s just a nutrient for something else.

And then I think it will become easier. And of course we need to have a lot of big logistics changes and. Yeah, efforts to actually get there, but we, I, I’m still quite sure that it’s not only the, the logistics, but the thinking on how we can actually see old products as nutrients for something else.

Patrick Hypscher: What I was referring to it’s like, well, that’s the, I think one of the initial challenges and it kind of asset logistics and the effort and I’m not even talking about, uh, transportation to other countries. Yeah. Even talk within a country within 200 kilometers to carry a fridge It’s just much more expensive, especially in relation to the product value.

If you compare it with a modern smartphone, I mean, totally different business, but it’s in many cases has a higher product value, at least sales value or sales price. Yeah, value is a different, a difficult term here. So a smartphone has a higher sales price and the logistics costs are relatively smaller.

I still think that ideally you want to keep the product at its highest value, which would be ideally you keep it intact. And if you can’t do that anymore, you use components. If you can’t do that anymore, you go on the material level. It’s of course, it’s a combination now.

Nora Sophie Griefahn: Yeah. But by seeing that actually, I mean, a lot of materials come from places somewhere in the world where we don’t want to get them, always get them back out of the earth again. So of course, to see that the whole world is a huge material hub where we can actually get our materials for maybe totally new innovations, that’s something where we of course need to step back of this thinking, okay, it should always become the same product.

But to have this idea that. We can have innovation to produce different new things out of the same nutritions that we are already using.

[00:27:12] Water Meters and wood for terraces as examples

Patrick Hypscher: Can you give one or two inspirational examples that are related to performance economy or product as a service. Where you say this is not perfect yet, but it’s like leading the way.

Nora Sophie Griefahn: I mean, when we’re talking about product as a service, I would guess, for example, that Lorenz you will probably also know, is a quite good example for a company who can tell you that it makes sense to produce in a way that you take back your product. Because it makes sense to have this water meters only used. There’s actually the law, the legislation that you need to get them back at some point. And of course it makes sense then to just take them back and to refurb them and to get them back into the loop. And that’s actually what you were just saying. So it’s more like refurbishment, repairing, and not actually making a totally new product out of it, but it’s a really good business case. And everyone who’s not aware of it should actually have a look at it.

But there are also companies who are actually producing really good cradle to cradle products by design already, who started with yeah, like actually changing the whole process on how to creating products in a way that they’re good for environment, good for humans. To look at the production stage and to see what kind of materials are actually being used and how you can get them into circles and yeah, a lot of them suffer from, yeah, these challenges that they don’t combine good business models with good cradle to cradle design because I think right now there’s not that much of a market for it already. So they are just, most of them are just trying. And what we can see is that they either have the one side done quite well or the other one.

But there are companies like Novotech, for example. They’re producing these woods where you can make terraces out. But they know that their product is only good if they really have it into cycles because it’s a compound of plastics and wood and you should not just sell it and give it away. But if you actually keep it in cycles, then you can produce these terrace material again and again and again. They work on how to get these materials back and they want to show that it’s actually yeah, possible and to figure out ways how to do so. So they have these business models starting to implement them, but actually they also face difficulties on legislation and how to actually implement these. And then there are and there’s the market and like people who are selling it actually, and they don’t want this business case. And so it’s like quite challenging to get there.

So yeah, I think it’s, there’s a lot to be done in this sector to combine the good design ideas and the cradle to cradle products with really good business models. And we actually need to work on this in the next years to really change our a business and to change our economic system to get to a way that we come to a world where we have new business models and products as a service, as a standard and not something that’s new and cool to see on the market.

[00:31:05] A call for regulation allocating the true costs of mining virgin materials

Patrick Hypscher: Yeah, yeah, definitely. Looking forward to that one.

You mentioned regulation here and there and that’s especially at the beginning, it’s not necessarily in favor of the performance economy or a more sustainable way of living and using what we have.

What are the key aspects where you think this is really in favor of harvesting virgin materials and gives everyone a competitive disadvantage who wants to keep, uh, resources in the loop.

Nora Sophie Griefahn: Yeah. I mean, right now it’s it’s easier to buy virgin material. You don’t get, yeah, you get, don’t get secondhand materials that easily they’re not on the market, but it’s also a lot of times cheaper though to buy than the virgin material. And I mean, and a lot of times it’s not fair if you look at the world situation to buy this virtual material that cheap. It’s not actually showing the price that we are paying for it.

We as a society, we as humans on this planet, so of course we need to think about if this is still fair to actually, yeah, have the costs of a product on all of our heads and to have the profits for one person. And by thinking about this, then of course we, we can see that we need to have different policies to get to a place where. This is actually not the case anymore.

But also by looking at our products now, I think in a lot of times it could already make sense also in a business case to, to produce in a way and to actually have a different business model behind, that’s why they are already starting, of course, but But yeah, we, I think it makes only sense if we get to to a bigger scale and if it’s not only like one single product that we’re, we’re now shipping around and like you said, having no logistics systems for doing so. I mean, if I buy like a shoe and then I have to send it back via post, that’s not a system that’s like really working. If we’re not collecting shoes in a large scale, for example, but shipping them around in a single package, so all of these things have to go together and then I think it’s, it’s going to become easier to yeah, to have these new business models in place and then, yeah. And then it also makes more sense money wise to do so.

[00:33:58] A call for changing the whole company

Patrick Hypscher: I have three final generic questions. The first one is coming back to the ones running the business models. Yeah. Be it a brand or manufacturer. What’s the main thing they need to make sure before they start a circular product as a service?

Nora Sophie Griefahn: I think it’s really important to learn from each other. In multiple variations of yeah, product as a service business models. We see that they have already been, yeah, tried and, and being tested. And so it’s not that everyone needs to invent the wheel new. So we should actually definitely look out what is already there to see what is already possible. And I think then to see, okay, is it really that I want a product as a service system only because I want a product as a service system? Or, what is the idea behind, why, why do I need this and what do I need to change to get to the actual, actual need that is behind it. And probably to see that, yeah, this product as a service system needs a different product design, needs a different perspective on how I look at my products. And mostly also needs a change of your company and not only having one product in a different way, then it’s only marketing and not actually really changing the way you’re producing and what you’re bringing out there.

[00:35:42] Towards a combination of PaaS and suitable product design

Patrick Hypscher: Okay. Second question is what are significant trends you see in circular renting in the next five years?

Nora Sophie Griefahn: Yeah. I mean, I see that circular renting is, is getting more and more modern and it’ll be more and more normal. I would, I would say

I think Trends are also that we need to look at at the perspective of, yeah, business models that go, go along. It’s not only the renting itself, but the production phase. And if you see these together, then you can see that companies are getting, getting this. They see that you also have to look at your products if a product as a service system should be part of their company philosophy and not only a marketing tool.

And I definitely hope that we can see a lot of this in the next five years, because I think it’s really time to do so. And we really need the companies to do so as well. It’s not something that we can do by ourselves as a yes, a single customers, but we really need companies to, to get there as well.

Patrick Hypscher: And my last question is about, yeah, so to say the community again Circularity.fm is about sharing knowledge, connecting people. What kind of people who listen right now or should reach out to you?

Nora Sophie Griefahn: Yeah. Any company or startup that wants to introduce or further develop product as a service, business models could actually get in contact with us to talk about yeah, how they can start. I mean, we’re As an NGO, we bring together many players that are actually having best practices. And we are connecting people they can also reach out for the cradle to cradle Congress that we are doing every year.

The next one will be in March 25, where we actually show yeah, cradle to cradle, best practices and ideas and connect people.

They can also come to us if they’re, for example, somebody’s listening who is working with schools or in other educational systems, because we as NGO work on educating towards cradle to cradle ideas. And we work with schools, we work with different yeah, organizations. We work with municipalities on how they could implement cradle-to-cradle thinking, and yeah, just maybe check out our website www. c2c. ngo, where you can actually find out more about our work as well. And we would love to get in contact with anyone who’s interested in really changing the world and changing, and the way of thinking from getting to being less negative to having a really huge and positive impact.

Patrick Hypscher: Thanks a lot Nora Sophie

Nora Sophie Griefahn: thank you very much for inviting me.

Patrick Hypscher: This was another episode of PaaS Decoded. 16 conversations about the fine details of product as a service. If you liked it, share this episode with colleagues or on social media. If you missed a question or topic, please send me an email so I can improve the conversations for you. If you learned something from this episode, please provide a review via Spotify or Apple Podcasts.

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