Name: Fortune Global Forum 2023: From Net Zero To Net Positive
Uploaded: 2023-11-29
Duration: 15 min 58 s
Description: William McDonough, Chief Executive, McDonough Innovation In conversation with: Matt Heimer, FORTUNE

William McDonough, Chief Executive, McDonough Innovation In conversation with: Matt Heimer, FORTUNE

Fortune Global Forum 2023: From Net Zero To Net Positive 

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Well, now our next guest wants you to know that carbon is not the enemy. He says it's a source of life and how we use it is key adding that fugitive carbon is the problem that needs to be dealt with. William mcdonough is a globally recognized leader in sustainable design and development. He is an architect author. He pioneered the concepts of cradle to cradle design and the circular economy. He's now taking the circular economy concept one step further stressing the importance of the circular carbon economy through his work. He advises commercial and government leaders worldwide on this concept as well as the importance of keeping next use in mind when designing products and facilities. He thinks this is important messaging for everyone to understand, especially the next generation. Please welcome William for a conversation with Fortune, executive editor of features, Matt Heimer. Hi, everybody. Thanks for sticking around. Thanks for being with us. Um So we're getting to the end of day two of Fortune Global Forum and I've already been to two other panels where Bill mcdonough has been uh in the audience and someone on stage has stopped and said, oh my gosh. Bill mcdonough is here. Um So if I could just say to his face, oh my gosh, Bill mcdonough is here. Um And as Jeff uh made clear to us, there's, there's good reason for that. I mean, you know, I don't wanna flatter you too hard, but, you know, Bill has been a pioneer in sustainable design. I almost literally wrote the rules on green buildings by helping establish lead certifications. So in a sense, Bill, you have shaped the way that we as business journalists and business leaders and the business community talk about climate. Um But the theme of this panel is changing the narrative. You're essentially saying the choices we're making in the language we use to talk about the climate don't fit, they aren't the right solution. What should we be doing better? What are we doing wrong? No pressure. Hi, everybody. I think the, the uh there are two things. One is we're confusing the next generation with our language. I'll give you a quick touch. Can you imagine going home and saying to your kids we're designing for the end of life. We say that life cycle assessment of inanimate objects very confusing. And then we also say things like, oh let's be Net zero. What does that mean? Must be nothing. Yes. Yeah. They, they wanna know what to do. Not what not to do. You don't say go out today, it'd be less bad. Yeah. Net zero. Net zero is a negative framing is that what you're saying? So, but, but at the same time, net zero is this concept that we've sort of just coalesced around as a, as a business community. Not really, really. Yeah, because we had eco efficiency, we had efficiency, which is about being zero waste. OK. So that's still less, there's still still a negative but there's nothing wrong with that. We should be less that, but we need an, we need something additional. That's what you're saying. So that sets us up to talk about what you call a net positive economic model. So uh can you define for the room? What, what is a net positive economy look like? How would you define that? Uh I think we have a slide too that we can tee up. Yeah, it should be appearing on your screens and behind us. Um So I see green, green is good, red looks bad. It looks like there's less, less bad and more good. So, but, but what does it mean to be net positive? The, the, the notion if we start with this idea of being less bad in front in business people is that you got a chart, here's zero and here's 100 and, and we say to everybody, OK, we're gonna be net zero and the chart goes down to the right and your goal is, and I don't know anybody in business who likes charts that go like that. We're not trained for that. So, so what we really want is to think about, let's just not be less bad, please be less bad. That's why I'm not saying don't be less bad. But we also can have a chart that says here we are today and we're gonna go here and we're gonna be 100% fabulous. I'm a designer and I'm optimistic, which means optimism and optimistic. And uh this idea of being optimized is a positive idea. So it's not just minimized, optimized, it's not just maximized, maybe doing the wrong thing. So it's optimized. And so then you have this chart that goes like this and young people like that chart, I'm gonna call be Fabulous. And you stop and think about what Kennedy did in 1962. He gave a speech and he said we choose to go to the moon, said it twice. We choose to go to the moon and I didn't access to space station on earth. So I got to know that the average age engineers putting Neil Armstrong on them when it was 28 and they did it in less than seven years after he said we're gonna do it in the decade. So, so if Kennedy had said, let's not, not go to the moon, we probably would not have gotten to this. And let's take as long as it takes. Right. Right. Right. So, so this is a model. So this is a model that really sees this as building something, as opposed to taking something away. Well, you start with inventory, you say what are our choices he chose? Go to the middle, then you assess it and you've either got good or bad. But these are human values, good and bad. These are not numbers, it's not less and more, it's good and bad. This plato values and then aerosol is truth in science and number is value creation and that's what business is like. But you, we really have to start with our values. What do we believe in? And that's where the good and bad come in. So your first inventory, then you sort it and then you put it on the chart and you go execute. What's the example of a, of a business right now, whether it's when you've worked with or when you've observed that is putting this into practice, that's essentially by being more environmentally mindful, creating net positives, creating, creating growth, creating something that brings people in and feels optimistic well in, in our world, if there's a regenerative biosphere, where growth is good and it's nature, so regenerative biosphere, move to that a healthy soils ecosystems. And then there's a circular techno here, objects of human intention and use. And so that's where being more good. For example, Shaw Industries, which was bought by uh Berkshire House and Industries. Just a back up. They make house, they, no, they make, yeah, flooring and they're now the largest car company in the world. And, and I remember when Warren Buffett heard about what we're doing, which is designing the materials for next use. He said, oh, I see. You're storing all our raw materials on the customers floors. Welcome to the circular economy. So the future carpets that this company will make and sell are are tied up in the carpets that they're already putting out on the market. Yeah, and this is a business model good enough that Warren Buffett wanted to buy it and wanted to invest it and the company went from being fifth in the market to number one or 1/5 to number one. That's really remarkable. Um This chart, by the way that we've uh moved to this, there will not be a test on this, but it does kind of create the idea that you uh on the one hand, are reusing the, the products in the technos sphere. These are that you've made that you've reused, but there's also uh uh a biosphere element to it where you're ideally if you're producing waste in uh in your production process, maybe some of that waste is becoming uh fertilizer or being reused as opposed to being uh spewed up into the atmosphere. Um What, what's an example of a business that's, that's really nailing the, the biosphere side, right. Well, uh Ralph Lauren is now doing clothing based on cottons and other uh natural materials that are designed with all their dyes. Morten finishes and so on to be safe in the biosphere because you are the biosphere and you're going to wear it. And so they want you to be safe and healthy. Think about that. That's an example that makes a lot of sense. Let's get to the, the carbon part of this, the circular carbon economy. Um I mean, again, in the, in the shorthand of, of green business, there's this sense that uh that carbon is the thing you want to get rid of. You know, I've, I've heard a lot of people say zero carbon when they're talking about, you know, emissions reduction, but circular carbon economy is, is recognizing something different about carbon, isn't it? I mean, and uh that it, that it can be the building blocks of something better. I was encouraged to write the circular carbon economy while I was in Davos and encouraged to meet with the Energy Minister of Saudi Arabia because he wanted to know where does carbon fit in the, in the circular economy. And we wanted to make sure that we, you know, since China took it up and I work with them and then we took it up the World Economic Forum where I chaired it, we want to make sure that they were all connected and it was really beautiful because if you look at those two diagrams and biosphere technos sphere, you realize the thing in the middle was the energy that ran the system and that's carbon today. So where does carbon fit in the circular economy? It's both the material and the fuel, which is amazing because we don't burn aluminum to run the economy. So carbon is both material and fuel. And so if we tell our Children that carbon is bad, there we go again. So what carbon is innocent? It's beautiful. It's a source of life. So how can you tell a child carbon is bad and then they go to school and find out everything is carbon. If it's alive, these things don't make sense for young people. So, so I wrote this for nature Journal. Carbon is not the enemy. So it's really us. And so if you look at it, there's three kinds of carbon to help us function. One would be living carbon, which is us and nature and growing things. We wanna have growth in business, right? So agriculture and food and food and then there's durable carbon which is products and things that are have utility over time or just sit there innocently like a mountain quietly being carbon. And then, and then there's this other one and that's fugitive carbon. The escape. He implies criminality, which is kind of fun. Harrison Ford running away from you. So, but anyway, the idea of fugitive carbon, it doesn't make sense because we're letting it escape to the atmosphere where we know it's damaging and or we're making plastics and they're getting in the ocean that's durable carbon fugitive. And so these aren't goods, they're bad. And we talk about making goods in an economy. What, what if we talk about making bad? It doesn't make sense and it's, it's obvious really. And so carbon, the fugitive is essentially a toxin. By definition, we do a lot of chemistry with products and a toxin is defined as the wrong material, the wrong dose, the wrong duration, the wrong place. Now think about carbon in the atmosphere today. Think about water is water toxic, highly toxic, wrong g surround yourself with it for six minutes, right. Right. Wrong material, wrong duration. Jump out of an airplane, land on the ocean at terminal velocity, very short duration, very big dose. So be careful. And so that what happened with carbon, it goes to the atmosphere, it's a toxin by definition. So if you go home and say today we poison the planet, we're sitting, we're sitting in the UAE, we're next door to Saudi Arabia. We're really in a place where an enormous wealth has been created by an older carbon model. Um You've been working with some people in the region about different ways of approaching carbon about sort of a circular carbon cycle. Uh What are some examples of the direction that that's taking? I think one of the most exciting ones is here in, in, in Abu Dhabi. They have a device here. Now it was invented by a professor at Cambridge who I got to know very well physicist from Poland and he found a way to make graphene, which is an exquisite material. We'll be using a lot of at some point once we figure it out. But he found a way to make pure graphene. So do you know graphene won a Nobel Prize for its discovers? Because they were using scotch tape literally on pieces of graphic going and see how thin they could get it. Graphene is so thin, it's one layer of thick. It's a second sheet and you can't get a knife through it. And it's like 20 times more conducted for electricity and heat like it's astonishing material anyway. They found a way to do it here with natural gas where they can uh extract the carbon pure and then take the H four, I see H four and they're using two of the HS and use it to power the system. And the other two is H two, which is known as hydrogen and we sell it. So they're making durable carbon for future generations to be immensely valuable. And then they're, they're producing hydrogen as a fuel by using their natural gas. And the other H two turns into what water. So the hydrogen goes off to become energy, it's safe and the carbon goes off to become material. It's immensely valuable and the amount of fugitive carbon is 00. Climate action has been a major theme of the last couple of days. The other major theme as I'm sure you have seen is a I um what role, if any we've got about a minute left, what role does generative A I if any play in your thinking about the circular carbon economy in the early seventies, the anthropologist Gordon, um Gregory Bateson, Margaret Man's husband wrote about cybernetics that had been brought up by Norbert Weiner at MIT and it was about a system that's full of synaptic space. And he was writing to his daughter and he was describing a computer in the future. And he goes, he says, I'm in front of the computer and this would be 30 let's see, about 50 years ago, I'm sitting in front of a computer and I asked the computer, tell me, computer, when do you think computers will begin to think like humans? And there's a long pause and the computer says, hm, that reminds me of a story. Hm. Welcome to A I. So the thing that it's language based, it's telling each other stories, but the stories need to be principled and I would love it if we could do regenerative natural intelligence principle that tells principled stories and stories rooted in our values and stories that could be optimistic. And the chil Children would learn from that Bill mcconnell. We're so lucky to have you. Thank you so much for joining us and thank you all for being here.