The story of how the European carpet and sports surfaces manufacturing company, Desso decided to embark on the tough journey of remodelling the business according to Cradle to Cradle® design continues to be the subject of a new Case Study at London Business School - DESSO: TAKING ON THE SUSTAINABILITY CHALLENGE.
This Case Study (Part A) focuses on the decision to move the business to Cradle to Cradle® design while the second part (Part B) highlights what Desso has done to date to implement the change.
In embedding Cradle to Cradle® practice into its business strategy, Desso is proving that companies can reengineer their manufacturing practices to produce products that are safe for human use and are safely recyclable on a continuous basis.
Under the leadership of Stef Kranendijk, CEO of Desso since 2007, Desso is pioneering a new circular economy model for business. It is committed to becoming fully Cradle to Cradle® by 2020. Through this design approach, Desso will be able to use the same materials to make its products to the highest quality in a closed loop system over and over again.
In the circular economic model, inspired by the continuous cycle seen in nature, Desso's products will be made of pure materials, designed for disassembly at the end of their life. This helps to solve three global crises: resource scarcity, toxicity dangerous to humans and the environment, and climate change. And it enables Desso to create a competitive edge through a robust CSR model in which its environmental footprint will be 100% good from the start.
In doing so, the company is building a brand new long-term model of sustainability in which all goods will be safe for human use and the environment, and will use natural resources much more efficiently.
The Case Study, written by corporate sustainability expert Ioannis Ioannou, Assistant Professor of Strategy and Entrepreneurship at London Business School and Amandine Ody-Brasier, a PhD student in her final year at London Business School, tracks the decision back to 2007 when Stef Kranendijk first took over as CEO. Then the company needed a new strategy to move forward.1
"The DESSO case is not only a great learning opportunity for investment professionals but, more importantly, a great example of a modern corporation walking the talk when it comes to sustainability, and doing so strategically," says Professor Ioannou.
"Under Stef's leadership, DESSO is setting the foundations of a profitable, innovative and sustainable business model that synergistically co-generates economic as well as social and environmental value. There is no doubt that establishing organizations that are sustainable within their economic, environmental and social context, will be the biggest challenge for the world's leading corporations in the near future; and DESSO is surely taking critical steps in the right direction"
Having made the decision to reinvent the business model through Cradle to Cradle® design, Kranendijk had to win the hearts and minds of shareholders, staff, management, suppliers and customers as to why this was the right move.
Coming at the time of the worst financial crisis for 60 years, this was a major challenge.
Some seventy seven investment managers and professionals from around the world heard about the Desso Cradle to Cradle® story at London Business School taught for the second time as a case in embedding sustainability into a corporation's business model; this time for the elective Strategy bloc week programme for the Masters in Finance candidates on January 7, 2012.
The Case was first taught in September 2011 to 60 global executives on the prestigious Special Executive Prorgamme (SEP) at London Business School and was then posted on the European Case Clearing House (ECCH2), making it widely available for executive learning.
This time, the Class heard from Tom Francken, Desso's CFO who spoke alongside Andrew Howard, head of Goldman Sachs Sustain.
"I was delighted to discuss how we implemented Cradle to Cradle® design into our business model to this class of leading investment managers," says Francken. "We want to show as many top figures in business how going beyond sustainability towards the far more sustainable circular economy is an excellent model for long-term profitability as well as being the right thing to do. This class provided an excellent opportunity to do just that."
Francken has been a driving force for financial and tax strategic development at Desso for a decade and has played a leading role as CFO during the company's transformation to Cradle to Cradle® since 2007.
The preparatory phase (2008 to 2015) of Desso's Cradle to Cradle® plans aims to:
• Eliminate all chemicals that are not acceptable by EPEA3 standards;
• Switch 50% of the energy used to renewable sources;
• Begin the construction of a take-back system designed to collect carpets at the end of their lifecycle and recycle them according to the Cradle to Cradle® principle of continuous reuse in the production cycle.
In the implementation phase (2015 to 2020) Desso aims to make 80% of the company's products from post-consumer or used goods. All carpets will be certified as Cradle to Cradle® by EPEA and 100% of the energy consumed will be provided by renewable sources.
1 Mr. Gus Romano, a sustainability expert and distinguished London Business School alumnus, will be discussing the case study from a consultant's perspective.
2 To visit ECCH online go to: http://www.ecch.cranfield.ac.uk).
3 The Environmental Protection and Encouragement Agency is an organization founded by Cradle to Cradle® pioneer Professor Michael Braungart.
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