A Road Map for Natural Capitalism

Introduction

• Originally published in 1999, the article discusses the importance of accounting for the earth’s ecosystem services in business.
• Authors: Amory B. Lovins, L. Hunter Lovins, and Paul Hawken.

Concept of Natural Capitalism

• Natural Capitalism: Conducting business in a way that is both profitable and protective of natural resources.
• Unaccounted Costs: In 1999, the value of ecosystem services was estimated at $33 trillion per year.
• Traditional industrialism often overlooks these services, leading to large-scale waste.

Four Major Shifts in Business Practices

1. Increasing Productivity of Natural Resources

   • Aim to increase resource productivity by up to 100-fold.
   • Example: Interface's Shanghai factory reduced power requirements by redesigning its liquid pumping system.

2. Closed-Loop Production Systems

   • Adopt systems that produce no waste or toxicity.
   • Example: Interface's Solenium floor-covering material is fully recyclable, reducing landfill waste.

3. Changing Business Models

   • Shift from selling products to selling services.
   • Example: Interface leases floor-covering services, reducing waste and improving client productivity.

4. Reinvesting in Natural Capital

   • Restore, sustain, and expand natural ecosystems.
   • Example: Living Technologies uses natural methods to convert sewage into clean water.

Implementation Benefits

• Companies like DuPont and Xerox have already adopted natural capitalism principles, leading to business opportunities and environmental benefits.
• Natural capitalism is seen as a necessary evolution beyond traditional industrialism, with those adopting it gaining a competitive edge.

Case Studies and Examples

• Interface: Redesigned manufacturing processes to be more resource-efficient and environmentally friendly.
• Living Technologies: Developed systems to convert waste into valuable resources using natural processes.

Conclusion

• Urgency: The principles of natural capitalism have become even more pressing since the article's original publication.
• Profitability and Sustainability: Businesses can achieve profitability while restoring the planet's ecosystems, ensuring long-term sustainability.

Authors and Background

• Amory B. Lovins: Co-founder and chairman of Rocky Mountain Institute (RMI).
• L. Hunter Lovins: President and founder of Natural Capitalism.
• Paul Hawken: Executive director of Natural Capital Institute.

Related Topics

• Operations and supply chain management
• Sustainable business practices
• Capitalism and fabrication manufacturing

Note: This article was published in the July-August 2007 issue of Harvard Business Review.