Framing Sustainability Innovation and Entrepreneurship
3.4 Practical Frameworks and Tools
Natural Capitalism
Natural capitalism is a broad social and economic framework that attempts to integrate insights from eco-efficiency, nature's services, biomimicry, and other realms to create a plan for a sustainable, more equitable, and productive world. Paul Hawken, author of The Ecology of Commerce, and Amory Lovins and L. Hunter Lovins, cofounders of the Rocky Mountain Institute for resource analysis and coauthors with Ernest von Weizsäcker of Factor Four: Doubling Wealth, Halving Resource Use, were independently looking for an overall framework to implement the environmental business gains they had studied and advocated. After learning of each other's projects, they decided in 1994 to collaborate on Natural Capitalism:
Some very simple changes to the way we run our businesses, built on advanced techniques for making resources more productive, can yield startling benefits both for today's shareholders and for future generations. This approach is called natural capitalism because it's what capitalism might become if its largest category of capital - the "natural capital" of ecosystem services - were properly valued. The journey to natural capitalism involves four major shifts in business practices, all vitally interlinked:
- Dramatically increase the productivity of natural resources.…
- Shift to biologically inspired production models.…
- Move to a solution-based business model.…
- Reinvest in natural capital.
The Big Picture of Interdependence
In all respects, Natural Capitalism is about integration and restoration, a systems view of our society and its relationships to the environment.
Natural capitalism emphasizes a broad and integrated approach to sustainable human activity. Although economic, environmental, and social goals had been conventionally seen in conflict, natural capitalism argues, "The best solutions are based not on tradeoffs or 'balance' between these objectives but on design integration achieving all of them together". Hence, by considering all facets of the problem in advance, business can yield dramatic, multiple improvements and will drive environmental progress. For perhaps the simplest example, using more sunlight and less artificial light in buildings lowers energy costs, reduces pollution, and improves workers' outlook and satisfaction, and hence their productivity and retention rates.
Like similar broad frameworks for sustainability, natural capitalism perceives a variety of current structures, rather than lack of knowledge or opportunity for profit, as obstacles to progress: perverse incentives from government tax policy hamper change, the division of labor and capital investments among different groups does not reward efficiency for the entire system but only the cheapest choice for each individual, companies do not know how to value natural capital properly, and so on.
Moving Away from Fossil Fuels
Amory Lovins talks about weaning the US economy off oil, 2005 Technology, Entertainment, and Design (TED) Conference.
Lovins argues that interlocking government incentives, rewards, market forces, and other system-level considerations can easily create the conditions to reduce US oil use.
Natural capitalism also criticizes eco-efficiency as too narrow: "Eco-efficiency, an increasingly popular concept used by business to describe incremental improvements in materials use and environmental impact, is only one small part of a richer and more complex web of ideas and solutions.…More efficient production by itself could become not the servant but the enemy of a durable economy".
Natural capitalism does, however, see eco-efficiency as one important component of curbing environmental degradation. Adapting the best-available technology and designing entire systems, rather than just pieces, to function efficiently from the outset saves money quickly. That money can be invested in other changes. Indeed, natural capitalism's case studies argue major gains in productivity by reconceiving entire systems are often cheaper than minor gains from incremental improvements.
Figure 3.4 Value of Forests
Natural capitalism's three other principles emphasize eliminating waste entirely and uniting environmental and economic gains. For instance, mimicking natural production systems means waste from one process equals food for another in a closed loop. Shifting from providing goods to providing services holds manufacturers accountable for their products and allows them to benefit from their design innovations while eliminating the waste inherent in planned obsolescence. Finally, companies can reinvest in natural capital to replenish, sustain, and expand the services and goods ecosystems provide. Beyond mimicry, letting nature do the work in the first place means that benign, efficient processes, such as using wetlands to process sewage, can replace artificial and often more dangerous and energy-intensive practices.
For example, a study of forests around the Mediterranean suggested that preserving forests may provide greater economic value than consuming those forests for timber and grazing land. Forests contribute immensely to clean waterways by limiting erosion and filtering pollutants. They can also sequester CO2, provide habitats for other valuable plants and animals, and encourage recreation and tourism. Investing in forests could therefore return dividends in various ways.