Can Business Save The Environment?

industryWhat can be realistically done to protect and revitalize the health of the planet, our living environment, given the combative political culture in America, big energy corporations pushing for complete deregulation and the public continuing to consume resources and industrial products at unprecedented levels?

We must consider capitalism’s effects regarding both stewardship and abuse of Earth’s limited resources and interdependent ecosystem. Numerous potent moves toward solutions are presented in a book that economist-environmentalist and successful entrepreneur, Paul Hawken (Smith and Hawken Garden Supply), co-authored with Amory Lovins (physicist, environmental scientist, energy policy consultant) and Hunter Lovins (business school professor, sustainable development activist): Natural Capitalism: Creating the Next Industrial Revolution (1999). I think the concepts there could help further challenge our viewpoints on the ethical and ecological merit in various forms of capitalism. Hawken made it clear by the title and the contents of his earlier book, The Ecology of Commerce: How Business Can Save the Planet (1993), what aspect of society was most responsible for the current ecological crisis and also could most considerably slow and even turn back significant portions of the devastation with restorative practices. Given that much of the material and suggestions made by these books are conceptual, structural, yet thoroughly specific and practical, the changes in technology since their writing won’t diminish their relevancy. In fact, they were part of the reasons some recent solutions and reformulations toward sustainability were created.

Natural CapitalismEcology of Commerce

One way in which Hawken’s books are unique is that they attempt a comprehensive and sensible method that can generally appeal to both conservative and liberals. (The entire text of Natural Capitalism can be read for free online or downloaded in PDF version.)

They lay out details for how we can reorient our societal systems of resource use and fit our production and consumption patterns with naturally congruent technologies that embrace the wisdom and realism of biomimicry. According to The Biomimicry Institute, the term means “an approach to innovation that seeks sustainable solutions to human challenges by emulating nature’s time-tested patterns and strategies. The goal is to create products, processes, and policies—new ways of living—that are well-adapted to life on earth over the long haul.” It’s an emerging field, popularized by science writer Janine Benyus in the late 1990s. Hawken and the Lovins reference her many times. In a TED talk, she provided an overview of what it means for human quality of life now and deep into the future, whether during a period of environmental ruination or not.

The lecture reminds us that humans are not the first innovators and creators. She ponders how humans would attempt to design the seasons, if they were challenged in this way. “Imagine designing spring. Imagine that orchestration.” In all of our creativity, have we ever done something that complex, efficient, functional, beautiful and grand? “Biomimicry is a new discipline that tries to learn from those geniuses, and take advice from them, design advice.” Regarding virtually anything impressive that we encounter in nature, she points out our tendency to believe “the myth that if something was that well done, that we must have done it.”

Our cultural and scientific consciousness often lacks a central point in reference to problem solving: that “we’re not the first ones to build. We’re not the first ones to process cellulose. We’re not the first ones to make paper. We’re not the first ones to try to optimize packing space, or to waterproof, or to try to heat and cool a structure. We’re not the first ones to build houses for our young.” She remarks that these new researchers are “nature’s apprentices”. They seek to craft elucidating road maps that will channel around or through obstacles by remembering to ask, “How does or how would nature solve this?”

biomimicryShe says, “What’s happening now, in this field called biomimicry, is that people are beginning to remember that organisms, other organisms, the rest of the natural world, are doing things very similar to what we need to do. But in fact they are doing them in a way that have allowed them to live gracefully on this planet for billions of years…At Biomimicry Guild, which is my consulting company, we work with HOK Architects. We’re looking at building whole cities in their planning department. And what we’re saying is that, shouldn’t our cities do at least as well, in terms of ecosystem services, as the native systems that they replace? So we’re creating something called Ecological Performance Standards that hold cities to this higher bar…How can we do what life has learned to do? Which is to create conditions conducive to life.” And they continue to progress in filling a database of how nature answers design quandaries similar to what we face.

An article by Edward Barbier in Nature, the interdisciplinary scientific journal, argues for a similar approach. It’s titled, “Economics: Account for depreciation of natural capital”. The tagline reads, “Economic indicators that omit the depletion and degradation of natural resources and ecosystems are misleading.” He says, “our economies have been trading one form of capital, Earth’s riches, for another — human riches. Without accounting accurately for this trade-off, we will continue to have a false impression of economic progress and growth. That is as dangerous as flying an aeroplane into the night without navigation tools or instruments.”

Small is BeautifulI’ve found the Wikipedia page for Natural Capitalism text to be helpful in summarizing what makes its approach unique and effective. I’ve copied it at the bottom of this article. Note where Hawken clarifies that the term “natural capital” was borrowed from E.F. Schumacher, an economist far ahead of his time regarding sustainable development and author of Small Is Beautiful: A Study of Economics As If People Mattered (1973). Hawken “stated that while he endorses the spirit of commerce and entrepreneurship, he does not endorse the ‘pathological’ qualities inherent in pure capitalism.”

See Wikipedia’s description of what Schumacher wrote in 1973.  It sounds like many environmentalists and economists today, but when he said it almost no one was thinking in this manner:

“The phrase ‘Small Is Beautiful’ came from a phrase by his teacher Leopold Kohr. It is often used to champion small, appropriate technologies that are believed to empower people more, in contrast with phrases such as ‘bigger is better’…Schumacher argues that the modern economy is unsustainable. Natural resources (like fossil fuels), are treated as expendable income, when in fact they should be treated as capital, since they are not renewable, and thus subject to eventual depletion. He further argues that nature’s resistance to pollution is limited as well. He concludes that government effort must be concentrated on sustainable development, because relatively minor improvements, for example, technology transfer to Third World countries, will not solve the underlying problem of an unsustainable economy…Schumacher’s philosophy is one of ‘enoughness’, appreciating both human needs, limitations and appropriate use of technology. It grew out of his study of village-based economics, which he later termed Buddhist economics, which is the subject of the book’s fourth chapter…He faults conventional economic thinking for failing to consider the most appropriate scale for an activity, blasts notions that ‘growth is good’, and that ‘bigger is better’, and questions the appropriateness of using mass production in developing countries, promoting instead ‘production by the masses’. Schumacher was one of the first economists to question the appropriateness of using gross national product to measure human well-being, emphasizing that ‘the aim ought to be to obtain the maximum amount of well being with the minimum amount of consumption’. In the epilogue he emphasizes the need for the ‘philosophy of materialism’ to take second place to ideals such as justice, harmony, beauty, and health.”


“Natural Capitalism: Creating the Next Industrial Revolution” is a 1999 book co-authored by Paul Hawken, Amory Lovins andHunter Lovins. It has been translated into a dozen languages and was the subject of a Harvard Business Review summary.

In Natural Capitalism the authors describe the global economy as being dependent on natural resources and ecosystem services that nature provides. Natural Capitalism is a critique of traditional “Industrial Capitalism”, saying that the traditional system of capitalism “does not fully conform to its own accounting principles. It liquidates its capital and calls it income. It neglects to assign any value to the largest stocks of capital it employs – the natural resources and living systems, as well as the social and cultural systems that are the basis of human capital.”

Natural capitalism recognizes the critical interdependency between the production and use of human-made capital and the maintenance and supply of natural capital. The authors argue that only through recognizing this essential relationship with the Earth’s valuable resources can businesses, and the people they support, continue to exist.

Their fundamental questions are: What would an economy look like if it fully valued all forms of capital? What if an economy were organized not around the abstractions of neoclassical economics and accountancy but around the biological realities of nature? What if Generally Accepted Accounting Principles recognized natural and human capital not as a free amenity in inexhaustible supply but as a finite and integrally valuable factor of production? What if in the absence of a rigorous way to practice such accounting, companies started to act as if such principles were in force.

Their fundamental questions are: What would an economy look like if it fully valued all forms of capital? What if an economy were organized not around the abstractions of neoclassical economics and accountancy but around the biological realities of nature? What if Generally Accepted Accounting Principles recognized natural and human capital not as a free amenity in inexhaustible supply but as a finite and integrally valuable factor of production? What if in the absence of a rigorous way to practice such accounting, companies started to act as if such principles were in force.

The Authors of Natural Capitalism say that these choices are possible and “such an economy would offer a stunning new set of opportunities for all of society, amounting to no less than the next industrial revolution. The book has many practical suggestions for companies interested in a sustainable future.

According to the authors, the “next industrial revolution” depends on the espousal of four central strategies: “the conservation of resources through more effective manufacturing processes, the reuse of materials as found in natural systems, a change in values from quantity to quality, and investing in natural capital, or restoring and sustaining natural resources”.

While traditional industrial capitalism primarily recognizes the value of money and goods as capital, Natural Capitalism extends recognition to natural capital and human capital. Problems such as pollution and social injustice may then be seen as failures to properly account for capital, rather than as inherent failures of capitalism itself.

The fundamental assumptions of Natural Capitalism are as follows:

1. The limiting factor to future economic development is the availability and functionality of natural capital, in particular, life-supporting services that have no substitutes and currently have no market value.

2. Misconceived or badly designed business systems, population growth, and wasteful patterns of consumption are the primary causes of the loss of natural capital, and all three must be addressed to achieve a sustainable economy.

3. Future economic progress can best take place in democratic, market-based systems of production and distribution in which all forms of capital are fully valued, including human, manufactured, financial, and natural capital.

4. One of the keys to the most beneficial employment of people, money, and the environment is radical increases in resource productivity.

5. Human welfare is best served by improving the quality and flow of desired services delivered, rather than by merely increasing the total dollar flow.

6. Economic and environmental sustainability depends on redressing global inequities of income and material well-being.



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