Regenerative Businesses are designed to fulfil a greater good - a purpose larger than simply turning a profit - are often born out of a response to a challenge or problem.
We spoke with Ben Sandzer-Bell, CEO of Co2Bambu early on during the development of the 'Regenerative Business 1.0: Beyond Sustainbility' eBook; at this stage we had only articulated 3 principles of regenerative business:
- A regenerative business invests in regenerative assets.
- A regenerative business collaborates before competing.
- A regenerative business contributes to communities.
We've since articulated 3 more principles of regenerative business, which you'll have to stay tuned in order to read about.... the eBook will be launched free to the world on 11.1.11, to start the conversation of an idea whose time has come: What lies 'beyond sustainability'?
How and why was CO2Bambu was created?
Ben Sandzer-Bell: The business, CO2 Bambu, started as a personal green project of mine, when I reached a point of frustration as VP of Strategy for a leading aerospace company. I was unable to convince my boss, the CEO of the company, that our future as an aviation related company was intrinsically linked to two fundamental trends, i.e. the inevitable rise of oil prices due to the disconnect between supply and demand, and the inevitable targeting by European carbon trading regulators of the aviation industry as a high polluting industry. I made enough headway to get the company to take SOME steps toward reducing our carbon footprint, by changing machinery, adjusting processes etc. I even got the company to become the first US aerospace company to become carbon neutral, by buying carbon credits on the voluntary market. However, I did not manage to reach what I felt was a more obvious step, which was to convert our 20 year history as a leading aircraft maintenance company, to grab a leading position in the highly similar wind turbine industry, by positioning ourselves as the go to place for wind turbine maintenance. This, apparently, was a bridge too far, and my CEO ultimately lost interest in these initiatives, on the basis that, to quote him, ¨alternative energy is a fad¨. Since I had a successful career as an aerospace executive and did things seriously, I hadn´t just come to the table with an idea. I came to the table with a near lock on a $25M multi-year contract to repair and manufacture wind energy blades out of fiberglass, for a leading European blade manufacturer desirous of breaking into the US market. This was in the thick of the Obama campaign and perhaps politics (he is a hardcore Republican, and I am a hard core Democrat) biased my CEO´s otherwise keen intellect.
Sensing a significant disconnect between my strategic analysis and my company´s likelihood of forward movement toward a greener future, I negotiated a 4 month sabbatical to get over my frustrations, and vowed to return to finish some unrelated international programs. I thus went on sabbatical to Nicaragua, where I had started a couple of years prior, to visit, with a thought of eventually making Nicaragua a fall back option when the US economic system would crash, inevitably, as oil reached a historic peak. At the time oil was at $90 a barrel, still a long way from the historic $147 per barrel price that was at the base of the 2009 stock market and real estate market crash. I thus went to Nicaragua and decided to launch a small reforestation project that would center around native bamboo. I launched over 4 months a program, on my own funding, which eventually planted 60,000 guadua plants in Nicaragua.
I returned to my aerospace job, but by then oil was already over $100 per barrel and the likelihood of a system collapse was already clear to me and I started to project out a couple of years (that was my job, after all, as a strategist) and extrapolated how things might evolve. I saw no reason to believe that oil pricing would go down, given Chinese and Indian demand, while Saudi and Russian oil supply kept contracting. It would follow that all airlines would face dramatic cuts, our company would be impacted, and I would become a casualty of a shrinking aviation sector. This in essense is what happened 2 years later. But in the meantime, I decided to pre empt and start visualizing what our life would be like in Chicago, as an out of work aerospace executive, versus what our lives could be like as a Nicaragua based eco entrepreneur. That was an easy decision.
I researched what green challenge I could take on in Nicaragua, dabbled with the thought of wind energy turbines, but that required capital I did not have, and returned to the bamboo plantations concept. I researched the ideal product for the particular bamboo that grows natively in Nicaragua, found out that it was uniquely fitted for construction industry applications. My next step was to decide whether I wanted to cater to retiring US baby boomers who would ultimately conclude that they can.t actually live out the American dream in the U.S. post economic crash and would naturally gravitate to lower cost of living countries south of the US border, OR seek to address a massive housing deficit at the bottom of the pyramid. I chose the latter, for obvious social impact reasons. This was 3 years ago.
Today, CO2 Bambu has developed a full line of low cost housing and post disaster reconstruction shelters that are ecologically friendly. We are working on post hurricane Felix reconstruction in Nicaragua, and I write this from Haiti where I am building the first bamboo shelters for post hurricane reconstruction.
How does CO2Bambu invest in regenerative assets?
Ben Sandzer-Bell: This is the most fundamental aspect of our business, namely, by deciding to launch a bamboo industry, a bamboo VALUE CHAIN, in a country that has or had some native bamboo, but no industry to speak of before we came along. Bamboo is the ultimate regenerative asset in that it behaves as a raw material like wood, but the more you cut it, the more it grows. In a world where demand for commodities is accellerating exponentially, courtesy of Chinese and Indian rising standard of living, it seems to me that any opportunity to substitute bamboo for wood should be seized.
Beyond this literal reference to regenerative assets, there are two other regenerative assets that are core to our activities to date.
First is our factory. A factory is a key business asset. I decided to our factory in bamboo. This way, we would not only do what we preach, namely substitute bamboo for traditional construction materials, but we would also use our capital asset, the factory, in a regenerative way, i.e. as a way to GENERATE business for us. And this is in fact what has happened. Most of our customers visit our factory and say some variant of ¨if you can build THIS factory, then obviously you can build my small casita.
Second is our product line. We are consciously targeting schools as a market. The logic is that if we expose children early on to bamboo schools, and if, like the Green School in Bali, we manage to incorporate bamboo related themes in the curriculum, then we can shape mindsets about the use of bamboo in construction to future customers and thought leaders.
How does CO2Bambu focus on collaboration rather than competition?
Ben Sandzer-Bell: The bamboo industry is the ultimate collaborative bunch. In launching our CO2 Bambu business, we have received the generous technical support of Ecuadors leading builder of low cost housing, Jorge Moran and Hogar de Christo, an NGO that builds 50 houses per day!
We then reached out for technical help on imunization from Colombia"s brilliant guadua bamboo bridge builder Joerg Stamm, and finally we turned to Costa Rica, also a user of guadua bamboo, to ask for help in devising attractive flooring solutions. In all cases we have received unbriddled help and remain friends with all these bamboo players.
Interestingly, recently, we had a rather non cooperative potential customer who sought to do high end houses in Nicaragua. We apparently did not meet his expectations in some ways and, despite our having delivered significant amount of data, insights about bamboo design options, this customer proceed to invite in our home country, competition from a highly recognized bamboo building company in Hawaii.
Essentially, the would be customer took our thoughts and brought into Nicaragua our competition. That's what he thought at least.
Before anything materialized, I received a call from this Hawaii outfit, asking me, bamboosero to bamboosero if I was aware and if this would create friction, i.e. non collaborative behaviours in Latin American bamboo world. I thanked them for their call. Fast forward 4 months, we are now in discussion over a strategic alliance with this Hawaii player, to build their houses under license in Nicaragua, and have both agreed to NOT work with this client, precisely because none of us want to work in this type of unpleasant, non civil way.
Collaboration ALWAYS wins over competition in bamboo world.
How does CO2Bambu use profits to build the communities it serves?
Ben Sandzer-Bell: This too is a truism for Co2 Bambu. In a very concrete way, we plow back some of our profits to do several things in the communities where we work:
1) we built a bamboo factory IN the indigenous communities where we are selling bamboo houses, precisely with intent to create job opportunities in a region that is plagued by 85% unemployment. The idea is that the more value added work we provide in the community, the more likely we are to receive future housing contracts from the communities.
2) we reforest in the communities where we harvest. This is a cost item for us and gives us little return, but it is a way to broadcast that we are indeed using some of our funds to develop plantations and expand the bamboo biomass, rather than reduce it.
And finally, 3) we crafted, at the prompting of a social impact investor who is a shareholder of CO2 Bambu, a very creative program to literally funnel this investor"s profit, his returns based on financial investment in our business, into our community.
How so? It struck us that while we work on bamboo housing, most of our workers live in homes that are in line with Central American Bottom of the Pyramid housing. We decided that we should try to serve our immediate stakeholders, namely here our workforce, and opened a "Workers' Housing Fund". All royalty payments owed our lead investor, instead of being paid back to him, are funnelled through this fund and a lottery will decide who amongst our workers will get a new bamboo house.
But since they have bought into the regenerative model, the work force recently turned down the opportunity to select randomly the lucky recipient of the next house. Instead, they voted to have us choose someone from a particular community, Muelle de los Buyes, a town in the Atlantic Coast of Nicaragua, where there is an important competition for low cost housing.
Their thought: if we build a house there, we will have a model on the ground, which will help us get the contract. More contracts, more jobs and more chances to get a bamboo house, next time around.
What does 'Regenerative Business' means to you, and what are the principles you have designed your business around?
Ben Sandzer-Bell: Regenerative business, for me, is the cross road between business for financial returns and NGOs for social impact.
The major problem with NGOs, however well meaning and even well run, is that NGOs are by construct not self sustaining, not regenerative. I see this every day in Nicaragua. Countries, such as Northern EUropean countries (Denmark, Switzerland, Norway, Sweden...) have been active in Nicaraguan civil society for decades. They have focused on health improvement campaigns, illiteracy, municipal infrastructure such as sanitation etc.
Now, Nicaragua has a President, Daniel Ortega, who enjoys political theater, in the vein of Cuba's Castro and Venezuela's Chavez. So his level of political rhetoric is high. But the poverty that is systemic to Nicaragua remains as real as it was 4 years ago.
European NGOs are leaving in droves and fast. This is counter productive and counter to the very ideal that these apolitical NGOs claim to adhere to.
A social impact business can provide regenerative traits to a social impact mission. If a business is successful, it will keep going... it will regenerate and not be dependent on the largess of specific donors who may not like the politics of the day or month.
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