The forgotten partnership - partnership for suitable development

October 9, 2016

The following is an excerpt from the keynote address Jens Birgersson delivered on 20 September 2016 as part of Climate Week New York’s Urban Innovation for Liveable Cities event. The specific portion of the conference was themed: Promoting Innovative Energy Partnerships. Jens Birgersson's thoughts have also been posted on Huffington Post.

"The last few days have been a great personal learning experience for me and have given me the opportunity to do some personal reflection.

It was refreshing to listen to all the good work that is being done towards the sustainable development goals, and at the same time very worrying. The words from the National Geographic video during the opening day event really struck home for me:

“We are the first generation to feel the sting of global warming, and the last generation who can do something about it.”

This is based on the concept that there is a lot of negative inertia in the system and things will get worse before they get better.

Ernest Moniz, the United States Secretary of Energy, said that he is an optimistic physicist in his approach to climate change. I am a physicist too, or at least I was one when I studied. I am a big fan of this discipline and I believe a bit of physics can help us in boiling down the issues and identifying the real constraints we need to address.

So let´s start with the definition of sustainability. In reading a sustainability report and asking people what they think sustainability is, words like the “triple bottom line” and all sorts of complicated language come up. I think it is helpful to bring it down to the core and be clear on what we mean.

The British sustainability scholar, John Blewitt defines sustainable development as “the idea that the future should be a better and healthier place than the present” Another subject matter expert, William Adams, defined it as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

So our job in this room is to ensure we leave a better place than the one we found when we arrived and at the moment I am not sure we can say that we do.

So let´s get back to physics and try to define the constraints and the real core issues we need to address. From my perspective there are two main objectives:

  1. Courageous and smart public private partnerships
  2. Partnering with the consumer


Jens Birgersson, CEO at the ROCKWOOL Group, closing keynote speaker at the Conference 'Urban Innovation for Liveable Cities', Track 1 'Promoting Innovative Energy Partnerships' during Climate Week New York 2016.

We must utilize public private partnerships to take on and solve the biggest problem first. For in the problem also lies the solution: energy renovation. Let me explain. 

Existing buildings are one third of the problem and one third of the solution. Why you might ask? More than one third of all CO2 emissions and energy consumption is from buildings. In addition, more than one third of all waste stems from the building and construction sector.

Over the next 15 years our global population will grow by more than 1 billion with all of this growth happening in cities. These additional billion people, like the rest of us, will spend 90% of their time indoors in buildings within cities where huge amounts of CO2 are emitted.

To cater for the needs of more housing and a higher population, we need to build new buildings and ensure the old buildings are maintained. It is not difficult to build the new structures with net-zero energy technology. Since no one is living in the buildings while they’re being constructed, and net-zero energy building technology exists already, there is rarely political opposition to building new, energy efficient buildings. Controls are needed, however, to ensure no shortcuts are taken during the construction.

The bigger challenge, AND solution, is in existing buildings. Today we typically only renovate at a rate of 0.5% per annum i.e. we upgrade existing buildings at a rate of once every 200 years. Remember this is the stock that in Europe consumes about 40% of ALL energy and more that 30% globally and also emits the same percentages of CO2. After running the calculation, one can quickly conclude that it is not enough to leave the existing houses as they are if we want to halt climate change.

By increasing the energy renovation rate to about 3% and applying existing insulation technologies we can drastically drop energy consumption and CO2 emissions. This in a necessary step to meet the COP 21 2050 target. In addition, an insulated building is an excellent complement to renewable energy as it can acts as a energy storage as well as maintaining a consistent temperature for so long.

Public & private sector challenges

Drastically increasing the renovation rate through public private partnerships doesn’t come without challenges. A few of these challenges are:

People are currently living in all these houses - some renovation work can only be done when homes are unoccupied.

Energy is cheap today and urban housing is expensive. While the environmental payback is absolutely essential and quick, the economic payback for a complex renovation projects can be as long as 5-10 years. When considering renovation, many think: “Why not just put the money towards a new kitchen instead?”

Energy renovation must happen and the rate should be increased to at least 3%. To reach 3%, renovation must be incentivized and financed. A potential way to achieve it would be if energy renovation is required anytime buildings change owners creating a window of time where no one is living in or using the buildings. These conditions and others are required or else we will never approach the 3% renovation rate. This requires some brave, smart and necessary political decisions, with very significant benefits ranging from the positive environmental impact, an improved indoor climate and a boost in the number of local construction sector jobs.

On the private side, the challenge will be delivering the renovation. Increased renovation will create many new jobs, but unfortunately productivity improvements in the construction sector have been at a standstill for a very long time. We need to raise productivity on energy renovation to reach a 3% renovation rate.

Jens Birgersson's blog on The Huffington PostGDP/Consumption is commonly used as a metric for welfare - the higher the level of consumption - the higher quality of life. Consuming less and sharing more help.

When we talk partnerships, the consumer is often not considered a key stakeholder or decision maker. Couldn´t we derive a greater force and a stronger signal to the private business sector by involving the consumer directly?

Let´s look at a few sustainability dilemmas and examples we as consumers face every day:

Should I take the bicycle to work

Should I buy the latest smart phone or could I clean up the memory of the one I have and try to use it another year

Should I buy organic food or would it be better for the planet if the food that I buy is locally produced avoiding transportation?

How about eco cleaners? Do they actually clean? Is the Eco claim really true?

Finally, what about electric vehicles and the grey energy payback? What about the battery life? What is the total life cycle impact of it for my use case? Is it better if I buy an electric car instead of a vehicle with a traditional engine?

The answers to these questions are not easy and sometimes humans favor short term pleasure before suffering long term pain. I think it is wrong to assume that people always take short term decisions. I think part of the problem is that consumers often do not trust companies and that it is too complex for them to consistently make informed decisions.

It´s complicated to apply life cycle physics to calculate the approximate impact and simplify it down to one metric - but I think it is possible - at least to make an approximation. If it was easier for people, me included, to make better decisions and make it easier for us to show that we care, we could perhaps help to lead the change towards products that are lighter in their environmental footprint.

In conclusion, I hope the private and public sectors will focus on initiatives that foster increased energy renovation while at the same time keeping the consumer in mind as a key partner and driver of change. The consumer can only drive this change if we as businesses think them in from the beginning and clearly communicate the impact of their purchasing decisions."

- Excerpt from the keynote speech by Jens Birgersson, CEO of the ROCKWOOL Group. The excerpt has also been posted on The Huffington Post.