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GreenMoney Journal - publishing since 1992
Fall 2010 issue
Socially Responsible Investing – Better Companies, Better Communities
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NATURAL CAPITALISM - A Book Preview (1997)
Ted Ketcham
"We are entering the century of the environment, whether we want to or not. In this century
everyone who considers himself a realist will be forced to justify his behavior in light of the
contribution toward the preservation of the environment."
- Ernst von Weizäcker, member of the
German Bundestag
True story: A few years back, GreenMoney Journal founder Cliff Feigenbaum asked Paul Hawken to
autograph a newly purchased copy of Growing a Business. Hawken, who by that time had written his
next book, The Ecology of Commerce, seemed perplexed that Cliff planned to read it. "Why go
backwards?" he asked.
The question is characteristic of this prophetic thinker, who,
with Amory and Hunter Lovins of The Rocky Mountain Institute, will publish their much-awaited book,
Natural Capitalism in October. Natural Capitalism blends encouraging anecdotal research with a well
articulated vision for how things might be.
An ambitious and engaging work, Natural
Capitalism challenges readers to examine, among other things, their basic assumptions about the
future of this planet, which depending on who you listen to, is either headed for the cosmic waste
bin or guaranteed to flourish beyond our wildest dreams due to greater and ever more clever science
and technology.
The authors, who subscribe to neither the former neo-Malthusian
doomsday scenario nor the latter cornucopian notion that everything on earth will work out
wonderfully. Nevertheless they offer an optimistic set of possibilities, working examples, and
reasonable predictions, all based to the idea that humans, especially humans engaged in business,
will, when the options are clearly understood, make responsible choices based upon their own best
interest.
One example, not from the book, might be found in Western European roads,
which offer a pleasant contrast to the many pot-holed boulevards in the U.S. The reason lies in
what is to us an unusual relationship between European roads and road contractors. In the U.S.,
usually low bidders repair worn out roads or build new ones to meet minimum standards enforced by
government inspectors. When surfaces wear out, new contract bid processes begin, and once again
roads are repaired by lowest bidders working to minimum standards based on the correct notion that
what doesn't get spent building the road will be profit. Flaws will be fixed by future contractors.
In Europe, on the other hand, a road contract demands a long-term relationship of the
contractor and the road itself, because the same contractor must also maintain it. A poorly
surfaced road will wear out sooner; thus money that could have been profit will instead become
loss. Because it is in the best interest of contractor, roads tend to be done right the first time.
It might be said that what is gained by such a relationship is not so much a good road as the
continued assurance of a smooth ride on a good road, and that the contractor has agreed to furnish
a good road service rather than a final product.
In both cases, profit motivates
contractors' behaviors, but the results are sustainable in the European case.
Hawken and
the Lovinses explore many such relationships in this book, building a logical and anecdotal set of
arguments proving that the key to a responsible planetary future lies in our recognition of Natural
Capital, defined on page 151 as "the sum total of the ecological systems that support life,
different from human-made capital in that natural capital cannot be produced by human activity."
Natural capital must take its rightful place alongside the more familiar human, financial, and
manufactured capital long recognized in profit/loss formulas.
How will such recognition
of natural capital occur? By way of the "path of least economic resistance," declare Hawken and
the Lovinses. Their four strategies of natural capitalism should encourage countries, companies and
communities to operate by behaving as if all the above forms of capital were valued.
Strategy #1 encourages "radical resource productivity," which means getting more from product
or process from less material and energy. Strategy #2 promotes "ecological redesign," which means
that wasteful byproducts can be profitably eliminated through redesign of industrial systems.
Strategy #3 advocates a "service and flow" economy which changes the relationship of consumer
and product to that of user and service.
Strategy #4, "investing in natural capitalism,"
suggests that life systems themselves be recognized as irreplaceable commodities, and as such
become targets for sustainability rather than exploitation.
Citing myriad and fascinating
examples, the authors refute the economic dogma that insists that too much environmental spending
diminishes returns. Home-buyers are told, for example, that thicker insulation will cost too much,
negating the potential fuel savings. Offering their own Rocky Mountain Institute, the Lovinses show
that eventually, thicker walls eliminate the need for the furnace itself, thus leading to a "cost
barrier breakthrough" that considers the whole system and all measurable benefits, not just the
fuel that might have been saved had the walls been thinner and the furnace kept.
Natural Capitalism is a bad news/good news book, presenting a sad, though merely partial
recital of evidence that many living systems are thus far extinguished or nearly so, and that
social justice dwindles, in the face of overwhelming human apathy. On the other hand, abundant
success stories demonstrate that this very condition can create a positive chain-reaction among
world leaders, business organizations and humanity itself: the "path of least economic resistance."
Many such heroes of Natural Capitalism have been previously cited in GreenMoney
Journal: Ray Anderson of Interface has moved his carpet company from a carpet seller to a company
that provides the service of comfortable and attractive floor coverings. Gary Hirshberg of
Stonyfield Farms Yogurt has created a healthy organic yogurt corporation operating on sound
principals of waste reduction, team building, and corporate responsibility. The Natural Step, yet
another powerful force in what can only be described as a "movement" toward expanded social
responsibility and sustainability, appears below.
The profound enthusiasm of the
authors for the possibilities of a brave new and more environmentally responsible world is
infectious. Embracing the width of an ecological and entrepreneurial reformation that can and must
spread to the corners of the world, Amory Lovins, Hunter Lovins, and Paul Hawken offer readers a
happy though realistic tour de force of the potentiality for working with and no longer against our
excellent host, the Earth.
Article by Ted Ketcham, co-editor of The GreenMoney Journal
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