Transcript Natural Capitalism: The next industrial revolution

Natural Capitalism:
The next industrial revolution
Session Eight
ENVI5050
Sustainable Business Models
• Industrial Ecology – emerged 1980’s
• The Natural Step (TNS) – early 1990’s
• Natural Capitalism – mid 1990’s
• The Triple Bottom Line – late 1990’s
Paul Hawken
•Has founded many
companies since the
60’s: natural foods,
catalogue, software
•1993 he wrote the
seminal text ‘The
Ecology of Commerce’
•Co-chair of The
Natural Step Int.
www.natcap.org/
•Acts as a consultant
on sustainability issues
Amory and Hunter Lovins
•Amory is a physicists
•Hunter is an attorney
•Co-CEOs of the Rocky
Mountain Institute a nonprofit natural resource think
tank (1982)
•Author of numerous books,
incl. Factor Four (1998) cowritten with von Weizsacker
www.rmi.org/
•Consultants to large
corporations and nation
states
Industrial Ecology
• Began to emerge in the 1980’s
• Introduces ecology and systems
to our understanding of industrial
process
• Leading proponents Brad Allenby,
Hardin Tibbs, Frosch and
Gallopoulos
Six Principles
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2.
3.
4.
5.
6.
Industrial metabolism
Dematerialisation
Life cycle analysis
Energy systems
Biosphere interface
Policy innovation
Purpose
• Achieve balance and harmony with
nature
• Design closed industrial systems
• Replace linear process with cyclical
• Seek technical and managerial
solutions
• Harnesses the innovation, leadership,
planning and entrepreneurial skills of
business
Eco-efficiency
• Coined in 1992 by WBCSD
• Producing more with less
• Factor 4 / Factor 10
– Estimated resource productivity targets
• Encourages business to become more
competitive, more innovative and
more environmentally responsible
• Similarities to quality
More than just eco-efficiency
“Natural capitalism is a larger message than just
resource productivity … Narrowly focused ecoefficiency could be a disaster for the
environment by overwhelming resource savings
with even larger growth in the production of the
wrong products, produced by the wrong processes,
from the wrong materials, in the wrong place, at
the wrong scale and delivered using the wrong
business models”
Hawken, Lovins & Lovins, 1999
Natural Capital
• Resources – water, minerals, oil, trees, fish,
soil, air, etc
• Living Systems – grasslands, savannas,
oceans, rainforests, etc
• Ecosystem Services – exchange of carbon
dioxide & oxygen, water storage, flood
management, waste processing, buffering
against extremes of weather, regeneration
of the atmosphere
Agency-Structure Link
One emerging recognition is that,
however much a single company may
be able to do on the eco-efficiency
front, in the end sustainability will
depend on the progress of entire
concentrations of industry, complete
value chains and whole economies.
Elkington, 1999, p.237
Capitalism as if Living
Systems Mattered
• The limiting factor to future
economic development is natural
capital, particularly life-supporting
systems (no substitutes)
• Must address causes of loss:
– Badly designed business systems
– Population growth
– Wasteful patterns of consumption
Natural Capitalism is ...
• Not a ‘how-to’ manual
• NC is a portrayal of opportunities
– not only concerned with protecting the
biosphere, but also for improving profits
and competitiveness
• A systems view of our society and its
relationship to the environment
• Based on the assumption:
– What’s good for nature is good for us
Principle One
Resource productivity
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•
•
–
–
–
Increasing resource productivity
Eco-efficiency, or doing more with less, winwin solutions
New profit opportunity for business
By develop new production techniques
Cleaner technology
Result is lean manufacturing
Principle Two
Biomimicry
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–
–
–
–
Redesigning business process to reflect
the circularity of biological systems
industrial ecology model
remanufacturing to closed-looped business
systems
No waste or toxins to be sunk back in nature
Substitute non-renewable with renewable
resources
Principle Three
Service and Flow
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•
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Shifting the measure of affluence
from goods acquisition toward the
provision of quality, utility and
performance
Service-Leasing business model
From product manufacturers to service
providers
Principle Four
Investing in natural capital
• Ecosystem services and natural resources
need to be restored, sustained and
expanded after decades of degradation
• Reward and invest in businesses that
achieve the first three principles i.e.
sustainable businesses
Questions: Why aren’t companies doing
this if it is so simple and obvious?
Answer: The economic system too often
rewards wasteful organisations and
penalises productive organisations
– Tax labour and subsidise resource use
– Utility companies are not encouraged to
encourage consumer efficiency
– Investment based on short term payback
– Tax efficient to waste resources
Referred to as ‘The Broken Compass’