Perhaps, “Natural Capitalism” should have been titled, “Natural Capitalism: The Sustainability Revolution.”  Here’s why: Although some businesses already employ the principles of natural capitalism, this concept for the most part is an entirely new way of thinking about commerce and industry.  What natural capitalism calls for is a remarkable shift in the dominant paradigm.

Natural Capitalism presents a financially logical, environmentally sound and emotionally compelling justification for adopting the four main principles of natural capitalism.  While reading this book, I was caused to consider the notion that if only more people could access this content in a more digestable format, the idea would spread and it’s adoption would begin to take place in the mainstream.

And that’s why I created the Pocket Guide to Natural Capitalism: A Strategic Paradigm for Business & Environment.  Download the pdf, print it out for yourself, print it out for your friends and keep a few on hand to encourage the conversation around the business case for adopting the principles of natural capitalism.

Download your copy now!

Please note that this design borrows heavily from Monterey Bay Aquarium’s design for their Seafood Watch Program cards.  This design is not intended for sale, it’s merely an exercise for me to consider how to best make natural capitalism accessible to the mainstream.

After reading “Thinking in Systems“, I was most interested in Meadows’ identification and description of the twelve leverage points in a system where she feels small shifts can lead to a large change in the behavior of the system.  I focused on this chapter because Meadows’ presentation of leverage points felt to be the portion of the book where I can learn the most about how to affect change in a system. I have outlined my specific responses below:

1. The leverage points with the greatest potential for change are the  most esoteric.
Meadows presents her twelve leverage points in order from the lowest to the highest level of impact that can occur from changes made to the individual levers.  Interestingly, I found that as the levers increase in their significance/potential impact, they become increasingly esoteric and intangible.  That being said, I agree with Meadows that her top levers (Goals, Paradigms, Transcending Paradigms) have the greatest potential for serving as catalysts for change.  Unfortunately, these leverage points seem to be the  most difficult to conceptualize in tangible actions and to measure quantitatively.  I spent time reading about Leverage Point Modeling (LPM) and much of the available literature that I found is focused on computer systems analysis undertaken by the Department of Defense.  Throughout the work I found, the DoD systems analysts seemed very capable of modeling the lower priority leverage points such as parameters/constraints and flow structures.  However the more conceptual leverage points of Goals and Paradigms were not mentioned.  When considering the efficacy and greatness of leaders, I wonder whether a great leader is one who can make changes to a system based on leverage points such as feedback loops and buffers or, is an effective one who can act upon the more esoteric levers of goals and paradigms?  My current feeling is that effective leaders can operate the lower priority levers well however, the great leaders are the ones who can act upon the power of the higher priority levers discussed by Meadows.

2. Leverage points are intuitive to leaders.
Meadows indicates that both she and Jay Forrester agree that leaders tend to be capable of intuitively identifying where the  leverage points in their systems exist.  Even though Meadows purports that leaders tend to affect these levers in a manner which typically leads to a negative change of direction in the system, I have to believe that in a system in crisis, it is often more beneficial to enact change even though you may not be certain of the outcome.  That being said, this simple point is made clear to me: Effective leaders need to be intimately familiar with and knowledgeable of the complex systems which they manage.  There is something to be said for a leader that understands when a change is necessary and the willingness or ability to make an informed decision based on a combination of intuition and the best available data.  I have worked for a number of managers who do not fully understand the complex workings of the systems they manage and these are the same managers that seemingly spend unescessary resources attempting to create change in an arena that has little capability for making meaningful change within the system.  In addition to intuition backed by the best available data, I have come to believe that a leader who will bring meaningful change to a system must a leader who is willing to accept disruption to the state of the system.

3. The paradigm of the consumer.
I want to change the dominant paradigm within the consumer society of the United States.  This is a tough statement to make because if called upon, I would likely have a difficult time articulating the stakeholders and relationships within this system because it is so incredibly complex.  For the purposes of this response, I will generalize this system through the nomenclature of “the consumer culture.”  As previously stated, my intuition tells me that the dominant paradigm in this system needs to change if we want a sustainable future on Earth.

Below are the foundational aspects of my definition of the current consumer paradigm:
- Products should be low-cost.
- It’s okay for products to be replaced with regularity.
- The more we consume, the happier we will become.

The paradigm shift that I would like to see is one in which the foundational aspects of the paradigm become:
- The cost of a product should reflect the comprehensive costs of manufacturing and delivering the product to the consumer.  This includes the social and environmental costs of manufacturing and bringing the product to market.
- Consumers should expect that products have a long life cycle and that when replacement is required, interchangeable parts are may be replaced so that the product as a whole does not need to be deemed invaluable.  Additionally, consumers should expect high quality product designs that allow for the recycling and re-purposing of “trashed” parts and accessories.
- Consuming less is actually a good thing.  Simplicity provides for an arena in which many of the ills of our consumer culture may be healed.  A greater emphasis on time with family and friends, time spent recreating in the outdoors and time spent enjoying meals with company are all benefits that should be valued and emphasized among consumers.  Reducing our emphasis on accumulating goods creates the space for taking advantage of the more simple aspects of life.

If my intuition tells me that the above described shift is what is needed in order to become more sustainable, should I not trust my intuition (given Meadows’ notion that our intuitive responses often shift a system in the wrong direction)?  If this is true, perhaps I should ignore my intuition and instead, encourage consumerism and hope that the system collapses dramatically and resolves itself to a sustainable path in response to a collapse of the system?

4. The role of vision in changing a paradigm.
In order to make a shift in a dominant paradigm, leaders needs to be able to articulate and broadcast their vision for where they seek to direct the system.  People need to visualize where it is they are being asked to go.  With regards to a sustainable future, I have to ask, how well have we articulated our vision for a sustainable future?  In our first residency, we spent much time discussing our various visions for sustainability.  If a room filled with intelligent and passionate people can not clearly articulate their vision for sustainability, what does this say about the likelihood that we will one day attain a sustainable way of living? Perhaps, this notion begins to get at what Meadows describes as “Transcending Paradigms” where the leaders recognize that the belief in paradigms is a paradigm and that there are numerous paradigms and the key to making a change is looking upon the complex system with an enlightened view softened by gentle humor.

5. Who provides the vision for sustainability that rings true for you?
We each have our own icons of sustainability and we often subscribe to the vision for sustainability that they provide in their writings, designs and social campaigns.  I have my own “heroes of sustainability” but, I am less concerned with my own icons and I am more concerned with the icons that the majority of our consumer culture members look to.  I was incredibly excited by the appeal that Al Gore has had with the general public.  Although his work with climate change began long before his major film, the awareness that the film raised with the general public was outstanding.  However, who does the public have to look towards today?  Al Gore seems to have lost some of his spotlight in this arena and I have not seen his original message evolve into a tangible vision that can make a change in the paradigm that exists among American consumers.  Although President Obama has laid out a plan of inspired words that paint the picture of a sustainable future in general terms, it is hardly a plan that many Americans can actually visualize and begin shifting towards.  T Boone Pickens has laid out a very detailed plan that can be easily digested, understood and worked towards by the general public.  So, I would ask a similar question to the one that I asked earlier…What does it say about the likelihood of that we will one day attain a sustainable way of living if the clearest vision for a sustainable energy future is one that is being put forward by an oil tycoon who seeks to secure his investments in natural gas?

Summary
The field of sustainability and the on-going adoption of sustainable business practices among global markets is a complicated web of interactions and relationships.  There lies a deep history in how this way of thinking has evolved and there is much to do in terms of making sustainability a principle of how our world operates.  “The Sustainability Revolution” provides an excellent overview of many key milestones in the evolution of sustainability as a concept.  I do not believe that this book intends to be a comprehensive portrayal of the field and it’s history and I do not think that the reader should consider it to provide that level of information.  Instead, I encourage the reader to embrace the concepts they are drawn to from the book and to explore those concepts more fully in other research efforts.   

I believe that “The Sustainability Revolution” provides a solid background on the evolution of “sustainability” as a concept in terms of when this concept began to be discussed in local and international arenas and how this concept has affected industries and consumers to date.  However, Edwards’ portrayal of “sustainability” does not convince me that it is in fact, a “revolution.”  More so, I believe that Edwards has described the concept of sustainability as a paradigm shift in progress.  A revolution and an in-process shift in mainstream thinking are two very different notions.  Ironically, Edwards uses both terms (revolution and paradigm shift) in the title of this book.  That being said, every field of study should have a few books such as “The Sustainability Revolution” which, provide the reader with valuable background information on the historical development of their chosen field of study.  Personally, I am more drawn to books that leverage current phenomena to engage the reader with inspiration for where we are today and where we headed tomorrow.  Along those lines, I think of Norman Uphoff’s “Reasons for Hope” and “Reasons for Success” as well as Hawken’s recent, “Blessed Unrest.”

One aspect of “The Sustainability Revolution” that I would like to focus on is Edwards’ presentation of the Hannover Principles.  I was surprised and somewhat disappointed that Edwards chose to begin his chapter on designing with nature with a presentation of the Hannover Principles because the statements that comprise the Hannover Principles are ones that date back much farther than McDonough’s 2000 declaration.  As a side note, I believe that the Hannover Principles were actually copyrighted by McDonough in the early 1990’s, prior to his 2000 presentation of these statements in Germany.  In considering Edwards’ presentation of designing with nature, I feel he has overlooked some very significant histories and concepts that would have served his chapter well.  If my understanding of the field is correct, I believe that designing with nature should begin with a discussion of the field of Industrial Ecology.  The concepts of Industrial Ecology can be dated as far back as the early 1900’s with the work of Buckminster Fuller.  The concepts of Industrial Ecology were further explored and explicated in the 1980’s by groups such as the Rocky Mountain Institute.  In the late 1980’s the term Industrial Ecology was made popular by Robert Frosch and Nicholas Gallopoulos.  In my estimation, the Hannover Principles are simply a re-wording of an already existing body of principles that had evolved over the course of many years, lead by thought leaders across a variety of fields.

So what is Industrial Ecology?
Industrial Ecology is a recognized and well followed, multi-disciplinary field which emphasizes the interactions of environment, economy and technology with a focus on the parallels between a “natural” system and “socio-technical systems”.  Very similar to the “cradle to cradle” concept, Industrial Ecology looks at the transformation of socio-technical systems from open loop to closed loop systems where waste is re-purposed as inputs to continue the original process from which it was discarded or, to be leveraged as input for a new process.

Why is it important to consider Industrial Ecology?
If what I have said is true (that the Hannover Principles are simply a re-statement of the principles of Industrial Ecology), then why is it important to focus on Industrial Ecology?…why not just skip Industrial Ecology and go straight to the Hannover Principles?  I think it’s important to learn about the contributions that the field of Industrial Ecology have made because some of these contributions include tangible tools that business managers, engineers and social entrepreneurs can make good use of in delivering more sustainable products and services.  These tools include but are not limited to Integrated Chain Management, the ISO 4000 management standards as well as engineering strategies such as cogeneration or energy recycling.

Identifying cost savings opportunities, ensuring long-term competitiveness, and reducing greenhouse gas emissions are all benefits of evaluating a company’s energy usage.

In order to identify the cost savings opportunities that investing in energy efficiencies provide, a company must first analyze the energy flows and consumption patterns of electricity and gas.   Efficiency strategies are typically low-risk, high-payback measures that can free substantial amounts of money for more lucrative investments.  With payback periods as short as a fiscal quarter, companies can realize immediate improvements to their bottom line through reducing energy related operating costs such as lighting, HVAC, office equipment, water heating and vehicles.

Increased costs of electricity generation, volatile natural gas prices and a growing demand for energy are signs that future costs of doing business will rise. Improving the efficiency of energy usage enables the long-term viability of a company through reducing the current and future operating cost structure of the company.  Improved energy efficiency also enhances industrial productivity metrics such as product output, production reliability and improved working conditions.

The rising threat of global climate change due to increased GHG emissions such as carbon dioxide provides the basis for the likelihood of a GHG emissions regulatory structure which will impact the finances of a company.  A cap and trade scheme will create opportunities for companies to generate revenue through the sale of credits accumulated by reductions in GHG emissions.  Alternatively, a carbon tax scheme will require that companies minimize their emissions in order to maintain financially sustainable operating costs.

Summary:
The availability of healthy natural capital is emerging as the critical limiting factor affecting today’s businesses.  The adoption of the four main principles of natural capitalism provide a framework through which businesses can address the challenges presented by the limiting factor of natural capital. Consequentially, responding to limits in natural capital provide tremendous opportunities for business to flourish economically.

In today’s society, the limits to the irrigation of agricultural products is not the availability of water pumps and water transportation materials, it’s the availability of the ground water and the health of collected rain water.  Current fishery production is not limited by the availability of fisherman and the necessary boats, it’s limited by the availability of the fish and the health of the fish to be consumed.

After years leveraging what was believed to be an inexhaustible natural resource base, economists, political leaders and business managers are now coming to terms with the fact that the natural resources relied upon for the creation of products and services is a critical limiting factor to the success of a business and the health of our economic systems.

Initially, the limiting factors to economic development included the availability of labor and machinery.  As world populations grew and industrial innovations came online, economic development flourished as it was able to overcome these limiting factors.  Given that we are now over-using our natural resource base, it seems critical that we shift our economic systems towards a model (natural capitalism) that accounts for the management and care of our limited natural resources.  One of the tenants of biomimicry is that biological entities evolve over time from the lessons learned through previous attempts.  So, let’s begin there.  Let’s learn from the failures of past business models and let’s begin encouraging businesses which utilize limited resources more efficiently as well as businesses that commit their core business strategies to rejuvenating the health of the biological systems upon which they are reliant.

Yes, the availability of healthy natural resources is a critical limiting factor that has been emerging in the business community over the past many years.  Although limited natural capital is a limiting factor for the health of a business, it’s also a tremendous opportunity for a business to flourish through the creation of new and innovative revenue streams as well through ensuring long-term security.