On Thursday September 24th Gigi Matthews and Denis Karema hosted the solution salon: Eliminating waste to 0% in the textile & food chain, impossible? as part of ANDE2020. The session highlighted the complex, multi-sector solutions that will be required in order to facilitate the transition towards fully circular textile and food sectors.
Breakout groups discussed the solutions required in four key areas; finance, capacity development, legal/policy and research/education. Legal/policy suggestions covered the need for pull factors such as tax incentives to encourage risk taking by early stage entrepreneurs, whilst at the same time acknowledging the role of push factors in changing the behaviour of large corporates. Research/education discussion emphasized the need for increased consumer awareness and identified both early and higher education as a starting point to do so. Finance and capacity development were closely connected and addressed the need for both a funding and knowledge infrastructure which would require collaboration between entrepreneurs, accelerators, funders, corporates and other stakeholders throughout the entire value chain.
During the workshop, two key challenges in transitioning towards zero waste arose, echoing the challenges faced by Enviu during our almost 17 years of venture building. These were the necessity for intense collaboration between stakeholders along the value chain and the gap in catalytic capital needed by the high risk early stage entrepreneurs who will play a central role in the transition.
Despite these challenges, the participants concluded that eliminating waste to zero in textiles and food can be achieved. Due to the wide-ranging nature of the challenge individual actors may not understand where to act, yet there exists a clear willingness to contribute resources to those who are actively working towards zero waste. ANDE can serve as a powerful platform in bringing these actors and resources together.
Intense collaboration for a multi-sector transition towards zero waste
During the workshop, participants were asked what they could contribute as a solution to realizing zero waste. Though participants came up with several suggestions, the bigger picture was that almost all participants were able to offer resources or suggest ways in which they could be used to assist others. This highlighted a key opportunity in the wide ranging transition to zero waste in textiles and food: no one actor can carry this out alone – collaboration is key!
The will for transition and collaboration does exist. Though food and textiles differ in their specifics, both sectors will need to see comprehensive change, which in turn will require cooperation and intense collaboration between stakeholders along the value chain, bringing together and sharing scalable, sustainable solutions to problems for which we currently have no easy answer.
At Enviu we often say “We believe if we could do it on our own, we wouldn’t be thinking big enough.” Perhaps nowhere is this more true than a transition towards zero waste. The discussion during the workshop made clear we need to bring stakeholders together! Innovative technology partners with entrepreneurs who can bring the idea to market, impact investors with early stage and scalable business models and these models with policy makers who can use them to illustrate that a better way of doing things is possible! This means leaving no stone unturned and bringing in actors from across the sector. Even large corporates, who may be seen by some as the source of the problem, have an invaluable role to play by collaborating with impact-driven companies to test, pilot and develop zero waste approaches before introducing them in their own supply chains.
During the discussion, ANDE’s platform was understood as a key site for starting this kind of collaboration, bringing stakeholders from across each sector to the table for constructive discussion. By continuing these discussions and forging new partnerships the solutions to questions of education, policy, finance or capacity can be made that much stronger. This will unlock the additional support needed to further the cause of those working towards zero waste. Additionally this kind of collaboration will go a long way towards overcoming one of the biggest financial challenges facing impact-driven entrepreneurs today, what we call the pioneer gap.
The pioneer gap, blended finance and the role of capital
At Enviu we’re closing in on almost 17 years of venture building. Over this time, one of the toughest challenges that we see for impact-driven entrepreneurs is what we call the pioneer gap, the lack of available capital to help bridge the gap from the stage of promising social venture, to investor ready organization.
This was also understood by participants as one of the most difficult challenges in moving towards zero waste in both food and textiles. Innovative risk-taking social enterprises were recognized for their crucial role in the transition, but it was clear that finance must become structured in a way that acknowledges that these businesses take longer to pay and have substantial infrastructure and tech costs that are inherent to setting up a zero waste value chain.
Potential solutions raised included the expansion of blended finance mechanisms with flexible repayments and increasing the availability of patient capital that can support high risk early stage innovation. There is also great potential for grants and investment programs to play a role in providing this early support. Large investment funds can develop grant arms that will allow them to support businesses that will help reorientate to zero waste. Businesses that in our current financial paradigm, struggle to access the same kinds of capital as traditional business models. Clearly, the development of these mechanisms will too require the same aforementioned collaboration between stakeholders, both to manage expectations and to clearly communicate the nature and potential of new impact based models.
Finance is however a difficult challenge to face. It will always be difficult to ensure early stage entrepreneurs get access to finance structured in a way that acknowledges their businesses often offer a non-traditional risk-return profile and take longer to provide a return on investment. Part of overcoming this is holistically making the case for zero-waste, to demonstrate with clear data that these solutions are not only beneficial to our world but can deliver a profitable business model. At Enviu, we ourselves recognize the importance of communicating this kind of impact data and see it as something we can work towards providing in greater detail.
Zero waste in food and textiles, what’s next?
Eliminating waste is possible, and actors with the necessary expertise are there. At Enviu we will continue our mission to build zero waste showcase value chains with our FoodFlow program in East Africa, and Reweave Program for textiles in India. To do so we will build the intense collaboration required, and forge partnership across the sector, throughout the value chain and between stakeholders. Organisations like ANDE already provide an invaluable platform to build these partnerships and we will continue to leverage this diverse and knowledgeable member base to share solutions, drive new innovation and strengthen what we have already built.
As we continue to play our role as co-executor of the transition, we would like to call on impact-first, catalytic funders to join us on this journey. With a success rate of over 80% and a diverse portfolio of ventures, we know these funders are in an incredible position where they can truly accelerate and scale our ventures and thus the transition towards fully sustainable, circular and inclusive value chains. With this support we can bring our ventures not just to market, but to scale, making the case for business through impact, not just impact through business.