CRADLE TO CRADLE DESIGN INNOVATIONS TOWARDS A CYCLE

CRADLE TO CRADLE DESIGN INNOVATIONS – TOWARDS A CYCLE ECONOMY Steve Gerrish EPEA Satellite Representative Carol Schreitmueller PMI Director of Research and Development NAHMMA / PSI Conference Seattle, WA June 3 rd, 2009

EPEA: ENVIRONMENTAL PROTECTION ENCOURAGEMENT AGENCY Privately-held science, chemistry, design, and innovation consulting and research institute 1987: Founded by Prof. Dr. Michael Braungart (former founder and leader of Chemical Division of Greenpeace) EPEA (Environmental Protection Encouragement Agency) Team: app. 30 Scientists (Biology, Chemistry, Physics, Environmental Engineering) + Industry Consultants

EPEA‘s NEW HOME AUGUST 2007 Patriotische Gesellschaft, founded 1765

CRADLE TO CRADLE DESIGN AND SUPPLY CHAIN MANAGEMENT EPEA: Core-Competences: • Material Assessment • Material Alternative Research • Network Management • Knowledge Trustee

EPEA AWARDS

STEVE GERRISH • Not a scientist • Not an environmental activist • A business person • 12+ years in apparel product development • 6+ years in architectural materials develpment • Active in C 2 C community for 8 years • Full time with EPEA since 8/05 • Business Development / Project Management

EPEA & MBDC • Completely separate for-profit companies • EPEA – Hamburg, Germany • EPEA – 100% Dr. Michael Braungart • MBDC – Charlottesville, Virginia • MBDC – Partners Michael Braungart & William Mc. Donough • Both provide Cradle to Cradle services / C 2 C certification • C 2 C Certification – MBDC initiative • 3 rd party verify each others C 2 C certification

EPEA´S FOCUS Products Services Cosmetics Textiles / Carpets Clothing / Accessories Packaging Paper and Printing Shoes / Leather Products Toys Home Appliances / Furniture Industry Tourism Agriculture Mobility Finance Logistics

CRADLE TO GRAVE DESIGN PARADIGM

DESIGN PROBLEM • Difficult to anticipate future path of products • Accumulations, regulations • Uncertain path poses risk of: -Human health issues -Environmental issues -Brand destruction -Why are bad materials used?

BAD DESIGN OF TOYS: TOXIC GASEOUS EMISSIONS. . . 2 -ethylhexanol cyclohexanon alkyl aromatics

Hamburger Umwelt Institute HEAVY METALS IN TOYS

Hamburger Umwelt Institute IPOD GAS CHROMATOGRAPH

EMISSIONS OF ELECTRICAL SHAVERS

ENVIRONMENT AND QUALITY OPPORTUNITIES FOR COMPANIES CHANGE THE FOCUS TO PRODUCT QUALITY 30 YEARS OF ENVIRONMENTAL DISCUSSION

ARE THEY TOO MANY ?

THE BIOMASS OF ANTS IS FOUR TIMES GREATER THAN THAT OF HUMANS

CRADLE TO CRADLE DESIGN PARADIGM • WASTE EQUALS FOOD • USE CURRENT SOLAR INCOME • CELEBRATE DIVERSITY

DESIGN BEYOND PRODUCT DESIGN – BIOLOGICAL SYSTEMS Regenerate Take Make Take Regenerate

DESIGN BEYOND PRODUCT DESIGN - TECHNICAL SYSTEMS Regenerate Take Make Take Regenerate

CRADLE TO CRADLE : THE GOAL IS QUALITY ECO-EFFECTIVENESS DEFINE, INCREASE, SUPPORT, OPTIMIZE ECO-EFFICIENCY

IDENTIFY THE BEST: ABC-X CATEGORIZATION OPTIMAL OPTIMIZING TOLERABLE NOT ACCEPTABLE NOT CHARACTERIZED

MATERIAL ASSESSMENT MATRIX COLUMBIA SPORTSWEAR OPPORTUNITIES

HUMAN HEALTH CRITERIA Carcinogenicity Teratogenicity Mutagenicity Disruption of Endocrine System Disruption of Immune System Irritation of Skin/Mucous Membranes Carrier Function Chronic Toxicity Allergenicity Acute Toxicity

ENVIRONMENTAL CRITERIA Biodegradation Fish Toxicity Daphnia Toxicity Algae Toxicity Bioaccumulation (log POW) Metabolic Pathway Bacteria Toxicity Content of Halogenated Organic Compounds Worm Toxicity Heavy Metal Content Persistence

PROGRESS OF QUALITY FROM CRADLE TO CRADLE WITH TIME ECO-EFFECTIVENESS CLIENTS AND SUPPLIERS ARE REGARDED AS PARTNERS FOR A QUALITY TO REACH.

TRIGEMA BIODEGRADABLE T-SHIRT ABWASSERAUFBEREITUNG IN ENTWICKLUNGSLÄNDERN NEW DIMENSION OF QUALITY FOR APPAREL PRODUCTS - User´s Health - Safe for the Environment

MIRRA CHAIR - HERMAN MILLER: TECHNICAL NUTRIENT

SHAW CARPETS: TECHNICAL NUTRIENT

AUTOMOTIVE: FORD MODEL U

A PROPOSAL FOR COPPER : BRAND „ECOEFFECTIVE COPPER INSIDE“ Exploration Mining Concentration Cu-production Product manufacturing Sorting Dismantling Collection of used products Use

EDTA ALTERNATIVE: BAYPURE® • NON-TOXIC AND EASILY BIODEGRADABLE • CAN REPLACE EDTA IN A VARIETY OF APPLICATIONS EPEA • • ASSESSMENT OF RELEVANT ENVIRONMENTAL QUALITIES FOR BAYPURE® PROMOTION FOR BAYPURE®

POLYESTER PRODUCTS AND POLYCONDENSATION CATALYST C 94 SITUATION – Antimony-based catalyst authorized by law despite its carcinogenicity ACTION – Discovery of the issue – Identification of C 94 as potential problem-solving alternative – Evaluation of impacts along with its material flows and confirmation of suitability – Support of the market penetration via downstream product development

CRADLE TO CRADLE PERSPECTIVES for Textiles Design for biological Cycles: • • Dyechemicals and Chemicals Sewing Threads Zippers Buttons Labels Spandex Yarns Interliners Packaging

TEXTILE INNOVATIONS CASE STUDIES: Schlossberg - Switzerland Towles and Bathrobes safe for biological cycles

Consumer Credibility SCIENCE Highlights Plastic Toy Product Cradle to Cradle Schlossberg lights Plastic Toy Product Cradle to Cradle Schlossberg 60

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE SEWING YARNS

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE BUTTONS

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE ZIPPERS

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE SPANDEX YARNS

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE SHIRTS + BLOUSES

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE SPORT OUTDOOR

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE CI SUITS + DRESSES

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE SOCKS

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE LABELS

TEXTILE INNOVATIONS CASE STUDIES: TRIUMPH - Germany Underwear and Bra‘s safe for biological systems

TEXTILE INNOVATIONS CASE STUDIES: DIM - France Stockings safe for biological systems

TEXTILE INNOVATIONS CASE STUDIES: BIODEGRADABLE MEDICAL APPLICATIONS

TEXTILE INNOVATIONS CASE STUDIES: BAGS

SHOE INNOVATIONS CASE STUDIES: MBT - Switzerland Shoe soles safe for technical systems

DESIRABLE ECOLOGICAL FOOTPRINT – BUSINESS SERVICE CONCEPTS German Federal Parliament, September 2004

CRADLE TO CRADLE DESIGN AND SUPPLY CHAIN MANAGEMENT

CRADLE TO CRADLE DESIGN AND SUPPLY CHAIN MANAGEMENT EPEA: Network Management Know-How Trustee

GOVERNMENT REGULATION – ROHNER TEXTIL • Small woolen textile mill in the foothills of the Swiss alps • Competitive marketplace, Western Europe labor rates, • Selvage fueled boiler to heat dye baths • Regulation re-classified selvage as hazardous waste • Decision: -Truck selvage to Spain for incineration – less regulation – expensive -Close doors, costs exceed revenue -Re-design a positive supply chain • The path less travelled

CLIMATEX® LIFECYCLE™ : BIOLOGICAL NUTRIENT

CITY OF LYON, FRANCE • Government initiated program for innovation • Invitation for 5 local firms to participate in a C 2 C workshop • Conference, ½ day w/each company • 6 -8 months innovation development • Summary conference, present results of innovation process.

CITY OF LIMBURG, HOLLAND • “Waste = Food” Movie, Rob Van Hattum • Groundswell of interest in C 2 C • City of Limberg invitation for 20 companies • Program extended, expands to 50 companies • Program expands, First C 2 C city!

CRADLE TO CRADLE CERTIFICATE Company Product

CERTIFICATION MARK

EXAMPLES FOR CERTIFICATIONS (MBDC) Tartan Track Silver Timber Sil Wood Treatment agent Silver Steelcase Workstation Silver Mirra Chair Silver/Gold Victor Inovatex Gold Shaw Eco Worx Tile Silver

CRADLE TO CRADLE MATERIAL AND PRODUCT PLATFORM CUSTOMERS

CRADLE TO CRADLE MATERIAL AND PRODUCT PLATFORM Collaboration of EPEA and MBDC with • Knowledge base for information about new and innovative materials • Innovative materials libraries „Library“ for materials

CRADLE TO CRADLE MATERIAL AND PRODUCT PLATFORM The Library

CRADLE TO CRADLE EXHIBITION AND CONGRESS PLATFORM Nutec: Congress and Exhibition for Innovation and Intelligent Design November 12 -14, 2008 FRANKFURT, GERMANY www. messefrankfurt. com // +49 69 75 – 59 99

CASE STUDY: How a simple idea can become really complicated The PMI e. Cycle™ Recycled Commuter Coffee Mug

CAROL SCHREITMUELLER Not a scientist Sustainable innovation strategist Educated at Johns Hopkins, Carnegie-Mellon, California College of the Arts, University of Washington, and MIT/Sloan MBA Candidate (2010) in Sustainable Business Bainbridge Graduate Institute Director of Research & Development at PMI since 2005 Product Manager/Developer at PMI since 2001 Creator of i. F 2009 Material Innovation Gold Award winning e. Cycle™ 100% recycled polypropylene material for PMI Leadership Board Member for NBIS: Network for Business, Innovation, and Sustainability My specialty: ultra-simple ideas that turn out to be not so simple

PMI FACTS Founded by Rob Harris in 1983, PMI has grown to a global corporation with over 800 products, 150 employees, and annual sales growth of 15%. PMI has owned the Stanley® and Aladdin® brands since 2002. PMI is headquartered in Seattle, with offices in London, Shanghai, and Manila.

PMI CORPORATE CULTURE PMI believes that doing business right is the right way to do business. We are committed to our Corporate Social Responsibility and to our industry leading practices in Code-of-Conduct compliance. PMI is engaged in the pursuit of good environmental practices. We care about the health and well being of our workers, our consumers and our planet.

PMI CORPORATE STRUCTURE ENVIRONMENTAL RESPONSIBILITY REUSABLE/RECYCLED/RECYCLABLE : : ENERGY SAVING : : LESS WASTE : : COMMUNITY SOCIAL CONSCIOUSNESS CODE OF CONDUCT : : GIVING BACK TO OUR COMMUNITIES

PMI CSR STRUCTURE 95

WHY INNOVATE? FORCES AT WORK IN THE CONSUMER PRODUCTS WORLD Energy prices rising Raw material costs rising Labor costs rising Transportation costs rising Regulatory restrictions increasing Marketplace overcrowded Consumer spending down Retailers becoming more demanding on price/value Consumers’ fears rising Greenwashing on the rise is confusing buyers & consumers www. worldeconomicforum. com

PMI INNOVATION FOCUS: RECYCLED MATERIALS Our goals for recycled material innovation e. Cycle recycled plastic products: 1. Save energy – material processing + manufacturing 2. Reuse high grade materials that would otherwise go to landfills 3. Raise awareness of the global garbage problem which contributes to global warming from the CO 2 emissions generated by landfills 4. Create more demand for these materials, which will then help support the future economics needed for more upstream suppliers to engage with recycled plastics 5. Create more market demand for specialty and engineering grade recycled plastics 6. Provide consumers with an eco-efficient choice in our product category

MESSAGE: LANDFILLS ARE FULL OF POST-CONSUMER PLASTICS, NOT POST-INDUSTRIAL PLASTICS PMI’s 2009 International Home & Housewares Show invitation

A REALLY SIMPLE IDEA Make a 100% recycled plastic coffee mug with as much post-consumer recycled plastic content as possible.

CONSTRAINTS The Basics • Durability: Cannot melt or deform in the dishwasher or when you pour boiling hot liquids into them. Microwavable = preferred • Food safety: We only use materials that satisfy FDA food safety compliance guidelines • Reliability: Each and every product we make from recycled material must be consistently durable and food safe

CHALLENGES Round 1 • Durability: Polypropylene’s heat resistance degrades the more times you re-melt it • Food safety: No ready-to-use FDA compliant recycled polypropylene material available that will work for us • FDA does not formally “approve” any recycled plastics or publish any specific test protocols for them • Reliability: Recycled material is recycled – it comes from different sources from all over

RESULTS PMI Exclusive Recycled Material

SOLUTIONS Round 1 Solutions • Durability: We added an FDA approved heat stabilizing ingredient to our compound • Food safety: We formulated our material to the little known FDA “Chemistry Considerations Guidelines for Recycled Food Plastics Packaging” document • We selected a tightly controlled traceable source using only pre-FDA-approved recycled material ingredients • Reliability: We selected a compounder and a recycled that were highly ISO certified and process controlled. We batch test for consistency and track material flows

e. Cycle

SUSTAINABILITY IN ACTION the only company making recycled mugs with as much as 25% post consumer, PMI is FDA compliant content and 75% pre-consumer content. PROPERTY OF PMI | CONFIDENTIAL | DO NOT DUPLICATE | DO NOT DISTRIBUTE recycled

CHALLENGES Round 2 • Durability: Material gets brittle during manufacturing from too many re-melting steps and other molding process issues • Food safety: Our customers love this product and 62 countries want to sell it. Can we do this? • Food safety regulations for recycled plastics are different country by country. Many are not online. Many are not available in English • Reliability: Post-industrial material is trusted in the compliance world; post-consumer material is not

SOLUTIONS Round 2 Solutions • Durability: We reduced the number of times the material is re-melted and changed the heat stabilizer • Food safety: We spent one year and a small fortune researching food contact plastic safety laws in 62 countries. We are compliant in 19 countries so far • We created custom food safety test protocols for our material for the intended uses of our products (since none existed) that satisfy US, Canada, EU and more • Reliability: We continuously audit our supply chain and we are creating process controls to ensure even greater traceability and material consistency and quality

WHAT A SIMPLE IDEA REALLY LOOKS LIKE The System

SO …NOW WHAT? PARTNERSHIP-BASED INNOVATION THAT SOLVES A REAL WORLD PROBLEM PROPERTY OF PMI | CONFIDENTIAL | DO NOT DUPLICATE | DO NOT DISTRIBUTE

ONGOING CHALLENGES Round 3 • CONFUSION: Consumers are confused, retailers are confused, nobody understands what the standards are or why any of HOW we are doing this is important • TRUST: Confusion over recent legislation has raised the level of mistrust for certain agencies and regulations • ROI: There is not any reward in the marketplace for “doing it right”. Lack of enforcement in certain sectors means many products are not in compliance, and many of those products are priced cheaper than ours • GLOBAL vs. LOCAL: There are no harmonized standards for most of what we are doing (major understatement)

PUSHING THE LIMITS IS THIS EVEN WORTH DOING? VS. WHAT ELSE CAN WE LEARN? PROPERTY OF PMI | CONFIDENTIAL | DO NOT DUPLICATE | DO NOT DISTRIBUTE

THE BRIGHTER SIDE: I CAN DO THE REUSE EVENT

CONNECTING WITH OUR CUSTOMERS & CONSUMERS

SPHERE OF INFLUENCE People Code of Conduct & Values Planet Environmental Process and Product Community Philanthropy & Volunteering 114

GIVING BACK TO OUR COMMUNITIES 115

THE FUTURE: SUSTAINABLE INNOVATION “Mikael Gorbachev told me about Perestroika Glasnost. He said “Look, we only had 5% of the communist party, and the rest didn’t understand what we were doing. But 5% understood, made a change, and destroyed the totalitarian regime”. We don’t have a totalitarian regime here. We have democracy. We can do things. It is not dangerous for us. We can just reinvent everything in a free society, and it is time to do this”. - Dr. Michael Braungart, Movie - Waste = Food, by Rob van Hattum

COMMUNITY OF INNOVATION • Identify a meaningful project / problem • Invite participation - innovation project • Build a community of stakeholders • Protect IP – get everyone’s best game • Explore process of innovation as community • Learn what is technically feasible • Design policy around feasible results of innovation

EPEA INTERNATIONALE UMWELTFORSCHUNG GMBH TROSTBRÜCKE 4 D-20457 HAMBURG GERMANY T. +49 40 43 13 49 0 F. +49 40 43 13 49 49