Smooth Value

 

The Problem:  Earth’s finite resources are being rapidly depleted by human activity. The global population, which doubled between 1960 and 2000, is expected to triple by 2040, intensifying pressure on these dwindling resources.

At the same time, profit-driven economies demand perpetual growth, fuelling consumerism and the production of largely nonessential goods that quickly become waste.

This cycle not only harms ecosystems but also undermines the long-term viability of the economies that depend on them.

The Cause: The pursuit of short-term growth has led businesses to prioritise scale over sustainability, creating friction in the form of waste, inefficiency, and unsustainable practices.

The Future: The future of systems with increasing friction is predictable: they eventually collapse under the weight of their own inefficiencies.

The Solution: A shift in thinking toward value-based efficiency modelled after nature’s proven systems. Nature operates within constraints, finding equilibrium over millions of years. Businesses can achieve the same, reducing waste and optimising resources.

The Benefit: By embracing efficiency over scale, businesses can improve long-term profitability, lower costs, and build long term resilience.

 

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What is Smooth Value?

Smooth: Reduce friction by operating within the system, not on top of it, not against it. Ride the waves, don’t fight them. Research existing evolution-proved global systems and work within them – the closer you align with successful regenerative systems, the less energy and cost you incur, the more value you can create.

Value: Increase in value does not necessarily mean increase in size. Once decoupled from size fallacy, value can increase within a finite system without destroying it. 

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A Shift of Perspective

Today, many businesses see Environmental, Social, and Governance (ESG) requirements as a regulatory burden, an added cost to doing business. But this is an outdated way of thinking. At Blue Carbon, when we think of ESG, it’s with a big E – Environmental needs guide our thinking. Social is who we serve and who we create the value for and Governance is the resulting principle that enables us to align to the self-regenerative system enabling infinite growth. Not a burden – an opportunity to reduce waste and improve operational efficiency. 

This shift in perspective, from burden to a tool for efficiency, unlocking environmental and financial rewards.

Shift a cost centre to a profit engine.

 

Turn the Telescope Around

So how does shifting ESG from compliance hurdle to a pathway work? 

The key is to ask: “How can we model our systems on those that have been perfected over millions of years in nature?” 

The natural world is inherently efficient. Evolution has created remarkable systems evolved to work within the planet’s finite boundaries.

Nature’s equilibrium is a beacon to be followed.  When we go against it, we produce friction in the form of wasted resources, wasted energy, and obviously, physical waste such as millions of tons of landfill and gigatons of greenhouse gases.

There are countless examples of proven systems that we can align with, channel, or enter. 

By applying this principle, businesses can reduce their environmental friction and improve both efficiency and profitability.

 

Friction Equals Waste, Waste Costs Money

When businesses operate in isolation from nature’s systems, or directly oppose them, this creates friction – in the form of wasted materials, excess energy use, or inefficiencies in the supply chain. 

Businesses overproduce goods or use energy inefficiently, both of which create avoidable costs. 

These inefficiencies reflect the fundamental misunderstanding that growth in size equates to growth in value. This conflation has led to a global economy plagued by systemic waste and inefficiency.

 

The Problem: Infinite Growth in a Finite System

The current model, in which growth is synonymous with success, has led to global overconsumption and waste. In a finite world, this model is unsustainable. 

The truth: physical expansion eventually hits hard limits of water, land, or raw materials. We’ve seen countless local examples – any number of fish species fished out, destroying the industry that relied on them. The canneries of John Steinbeck’s time are all gone.

We’re now doing this on a global scale. The focus on short-term growth builds friction into a system inevitably headed to collapse. Build more, take more, waste more. The outdated attempt to ‘battle’ and ‘control’ nature hasn’t been applicable for our survival for hundreds of years, but it still drives our economic systems, leading to waste that is destroying our civilisation.

 

The Inefficiency of Our Current System

The waste in our global economy is staggering:

• • 30% of global food production is wasted, yet global food demand keeps rising, leading to increasing deforestation and soil degradation.

• • 70% of freshwater consumption goes to agriculture, yet 60% of that water is wasted due to inefficient irrigation systems.

• • 73% of textiles end up in landfills – fast fashion uses resources that are discarded almost immediately.

• • 82% of electronics are never recycled, resulting in an annual loss of over $57 billion in precious metals and raw materials.

• • 50% of all plastic waste comes from single-use plastics: the great ocean garbage patch is now larger than Mongolia (1.6 million square kilometres).

• • 40% of creatures caught in fishing nets are discarded as bycatch, representing a colossal waste of marine life. 30% of the remaining seafood is wasted.

As finite boundaries cause environmental and ecological feedback, the cost of waste becomes ever higher. The waste we build up from overusing resources is overwhelming those resources, blocking their ability to replenish themselves. The friction of disharmony is breaking the system.

 

How Smooth Value Works

Smooth Value aims to reduce this friction. By aligning business models with nature’s principles – where waste is minimised and efficiency is maximised – companies can cut costs and improve value. This doesn’t mean sacrificing growth, but rather growing smarter: increasing efficiency, optimising resource use, and cutting down waste. Using the power of evolution to power our future.

The transition to a Smooth Value model may require upfront investment, but the long-term returns come in the form of lower operational costs, lower regulatory costs, and customer loyalty.

Think of it like surfing. A novice surfer might try to fight the waves, exhausting themselves in the process. But an expert works with the waves, gliding effortlessly across the water. This is Smooth Value in action.

 

Efficiency Means Value

Consider the computer microchips industry: as processors become smaller and more energy-efficient, their value has skyrocketed. Value comes from growth in efficiency, not physical size. 

The same principle applies to business: the goal is to grow in quality and efficiency, grow value not physical footprint. Shareholders want increased value, not size. GDP ‘growth’ is growth in value, not size. Reduction of footprint and increase in value can be a reinforcing loop as long as we continue to increase efficiency.

 

Nature is Efficient

Nature has perfected efficiency over aeons, in countless interconnected systems, providing myriad examples for businesses to follow. 

Fans of biomimicry already know evolution creates solutions more effective than our own. Photosynthesis, on a quantum level, outperforms our attempts to convert sunlight to energy. 

Another example: the symbiotic relationship between plants and fungi already sequesters 13 billion tons of carbon every year. A perfect market where plants convert carbon dioxide into energy, and exchange it for the nutrients that fungi extract from the soil through their vast networks of filaments. Carbon is traded for nutrients, on a global scale. 

 

ESG: The Pathway to Competitive Advantage

Companies can approach nature’s level of efficiency by redesigning supply chains and operations to reduce resource use, minimise waste, and optimise energy.

At Blue Carbon, instead of using diesel engines (the basic design now a hundred years old) to power our oPods, we harness the endless motion of the waves. We tap into the forces of the ocean, channelling virtually perpetual energy to reduce costs – an obvious advantage for industries that need to pump seawater.

 

Smooth Value is Already Working

Here are some more examples of Smooth Value in action. A simple shift in perspective, inspired by nature, leading to measurable increase in value. 

Ants improve logistics by 10%: Ant colonies use pheromone trails to find the most efficient paths to food sources. As more ants use a successful path, the pheromone trail strengthens, attracting more ants. Southwest Airlines used ant colony optimization algorithms to improve their cargo routing system, reducing travel times and fuel consumption by up to 10%.

15% Improvement in Aerodynamics: The Japanese Shinkansen bullet train faced noise problems when exiting tunnels at high speeds. Engineers redesigned the train’s nose based on the kingfisher’s beak, reducing noise and improving energy efficiency by 15%.

28% Yield Increase: Legumes form symbiotic relationships with nitrogen-fixing bacteria in their root nodules, enriching the soil. Intercropping systems, such as planting corn with beans, mimic this mutualism. In Malawi, farmers adopting this practice have seen up to 28% increase in yields without additional fertiliser use.

Decentralised Decision-Making: Bee colonies make collective decisions about new nest sites through a decentralised process where scout bees “vote” by dancing. Valve Corporation uses a flat organisational structure inspired by this principle. Employees self-organise into projects, resulting in higher productivity and innovation rates compared to traditional hierarchical structures.

 

The Value of Efficiency will Skyrocket

As resource scarcity intensifies and regulations tighten, businesses that learn the lessons of evolution and optimise for efficiency and waste reduction will have a significant advantage. 

Waste cost, in the form of pollution regulation and carbon taxes, will only increase as our environment degrades. 

Some estimates see the price of carbon reaching $10,000 a ton. At that price, a rational business would reduce their carbon risk: better to be in the business of creating carbon credits, not paying for them.

 

The Shift from Growth to Value

GDP and other economic metrics have focused on growth as the measure of success. But growth for growth’s sake is a flawed metric in a finite world. It’s a symptom of prosperity, not a goal.

The success of business in the reality of a finite world will be measured by value creation – how efficiently resources are used and how little waste is generated. 

By shifting from a growth-centric to a value-centric model, businesses can align with the reality of the planet we live on, following pathways laid down for millions of years.

In a nutshell: Face reality. Stop reinventing the wheel. Join the winning team. 

Smooth Value is a sustainable, long-term strategy that benefits both shareholders and the planet.