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Natural Capitalism

Orginally written in 1999 by Paul Hawken, Amory B. Lovins, and L. Hunter Lovins, "Natural Capitalism: Creating the Next Industrial Revolution"
is a ground-breaking blueprint for a new economy.

A classic text, the book describes a future on the verge of a new industrial revolution in which business and environmental interests increasingly overlap, and one where companies can improve their bottom lines, help solve environmental problems—and feel better about what they do—all at the same time.

Companies Can Profit From the Principles of Natural Capitalism

Previous industrial revolutions made people vastly more productive when low per-capita output was limiting progress in exploiting a seemingly boundless natural world. Today we face a different pattern of scarcity: abundant people and labor-saving machines, but diminishing natural capital.

"Natural capital" refers to the earth's natural resources and the ecological systems that provide vital life-support services to society and all living things. These services are of immense economic value; some are literally priceless, since they have no known substitutes. Yet current business practices typically fail to take into account the value of these assets — which is rising with their scarcity. As a result, natural capital is being degraded and liquidated by the very wasteful use of resources such as energy, materials, water, fiber, and topsoil.

Learn more about how businesses can profit from natural capitalism in this article from the Harvard Business Review.

The Four Principles of Natural Capitalism

1. Radically Increase the Productivity of Natural Resources

Through fundamental changes in both production design and technology, farsighted companies are developing ways to make natural resources — energy, minerals, water, forests — stretch five, ten, even 100 times further than they do today. The resulting savings in operational costs, capital investment, and time can help natural capitalists implement the other three principles.

2. Shift to Biologically Inspired Production Models and Materials

Natural capitalism seeks not merely to reduce waste but to eliminate the very concept of waste. In closed-loop production systems, modeled on nature's designs, every output either is returned harmlessly to the ecosystem as a nutrient, like compost, or becomes an input for another manufacturing process. Industrial processes that emulate the benign chemistry of nature reduce dependence on nonrenewable inputs, make possible often phenomenally more efficient production, and can result in elegantly simple products that rival anything man-made.

3. Move to a "Service-and-Flow" Business Model

The business model of traditional manufacturing rests on the sale of goods. In the new model, value is instead delivered as a continuous flow of services—such as providing illumination rather than selling light bulbs. This aligns the interests of providers and customers in ways that reward them for resource productivity.

4. Reinvest in Natural Capital

Capital begets more capital; a company that depletes its own capital is eroding the basis of its future prosperity. Pressures on business to restore, sustain, and expand natural capital are mounting as human needs expand, the costs of deteriorating ecosystems rise, and the environmental awareness of consumers increases. Fortunately, these pressures all create business opportunity.

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