Natural Capitalism: Creating the Next Industrial Revolution

They call their approach natural capitalism because it's based on the principle that business can be good for the environment. For instance, Interface of Atlanta doubled revenues and employment and tripled profits by creating an environmentally friendly system of recycling floor coverings for businesses. The authors also describe how the next generation of cars is closer than we might think. Manufacturers are already perfecting vehicles that are ultralight, aerodynamic, and fueled by hybrid gas-electric systems. If natural capitalism continues to blossom, so much money and resources will be saved that societies will be able to focus on issues such as housing, contend Hawken, author of a book and PBS series called Growing a Business, and the Lovinses, who cofounded and directed the Rocky Mountain Institute, an environmental think tank. The book is a fascinating and provocative read for public-policy makers, as well as environmentalists and capitalists alike. --Dan Ring

Product Description
Most businesses still operate according to a world view that hasn't changed since the start of the Industrial Revolution. Then, natural resources were abundant and labor was the limiting factor of production. But now, there's a surplus of people, while natural capital natural resources and the ecological systems that provide vital life-support services is scarce and relatively expensive. In this groundbreaking blueprint for a new economy, three leading business visionaries explain how the world is on the verge of a new industrial revolution. Natural Capitalism describes a future in which business and environmental interests increasingly overlap, and in which companies can improve their bottom lines, help solve environmental problems and feel better about what they do all at the same time. Citing hundreds of compelling stories from a wide array of sectors, the book shows how to realize benefits both for today's shareholders and for future generations and how, by firing the unproductive tons, gallons, and kilowatt-hours it's possible to keep the people who will foster the innovation that drives future improvement.

Business readers and anyone concerned about the changing global economy and its impact on the ecosystem will want more than copies of the HBR article once they realize it was actually a tantalizing synopsis of the authors' new book, "Natural Capitalism: Creating the Next Industrial Revolution" (Little, Brown, 1999). This important book can take its place alongside such touchstone volumes as "Future Shock," "Megatrends " and "The New New." The authors describe in vivid detail how business and industry can gain competitive advantage through a new business model based on doing much more with much less.

The authors set out to prove that changing realities of the information economy and global competitiveness are already transforming industry and commerce in ways unforeseen even a few years ago. The new business model takes into account the values of all forms of "capital" including human, manufactured, financial, and natural. "Natural Capitalism" starts with an elegantly simple premise: economies need no longer be based on the idea that human capital is finite and natural resources are infinitely abundant when the obvious truth of the 21st Century is exactly the opposite.

With mounting confidence, Lovins, Lovins and Hawken predict that the latest industrial revolution will create "a vital economy that uses radically less material and energy." Businesses that recognize the trend toward this new type of industrialism will gain advantage over their less alert competitors. Those that postpone this shift will be left behind and will eventually, make themselves irrelevant in the new economy.

Theirs is not merely a detailed updating of Buckminster Fuller's "small is beautiful" thesis. Rather, the authors describe a step-by-step process of business restructuring that should result in more efficiency at the corporate, national and global level. Such a process, if carried out across several industries simultaneously, would make it much easier for governments to promote social equity and conserve or even restore the natural ecosystems reaching across traditional borders.

This next stage of industrialism, the authors' "natural capitalism," is founded on four core business strategies already being adopted by the most innovative corporations across the globe. The strategies suggest that companies need to:

1) employ technology and design innovations to use resources much more productively. This results, of course, in companies using fewer resources, reducing pollution, and setting the stage to create more jobs;

2) practice "biomimicry" by redesigning industrial systems to be more like biological systems, leading to an elimination of even the concept of waste;

3) shift from an economy based on goods and purchases to an economy based on service and flow. This concept leads to a quantum shift in how manufacturing companies service their clients, especially in terms of inventories, sales strategies, etc; and

4) reinvest in "natural capital" to sustain, restore and expand the resources on which industry, and ultimately all life, and therefore all livelihood, depends.

"Natural Capitalism" is not a "gloom and doom, industry vs. the environment" anti-consumerism rant. Neither do the authors fall into the trap of proposing a Pollyanna hypothesis that begins with "if only we could change our basic cultural values." Lovins, Lovins and Hawken make elegant use of facts and examples from several industrial sectors and actual case histories of large and small companies based in the US and overseas.

Consider the "Hypercar," a synthesis of emerging automobile technologies developed in 1991 by the Rocky Mountain Institute, the think tank founded by Amory and Hunter Lovins. Imagine "a family sedan, sport-utility, or pickup truck that combines Lexus comfort and refinement, Mercedes stiffness, Volvo safety, BMW acceleration, Taurus price, four-to eightfold improved fuel economy (that is, 80 to 200 miles per gallon), a 600 to 800 mile range between refuelings, and ZERO emissions."

If such technological innovations sound like eco-friendly pipe dreams, think again. Today, DaimlerChrysler, Ford, GM, Honda, Toyota, Volkswagen and others are actively competing to bring this revolutionary vehicle to the market within the next few years.

As global a corporate presence as DuPont is already feeling (and no doubt, influencing) a sea change in manufacturing philosophy. The Delaware-based chemical giant is on record in favor of "comprehensive resource productivity". In DuPont's words, "sustainable growth has to be focused on a functionality, not a product. The next major step toward sustainable growth is to improve the value of our products and services per unit of natural resources employed." To that end, DuPont is "down-gauging" its polyester film, making it thinner, stronger and more valuable so that it may sell less material at a higher price.

What the Lovins and Hawken have given us with "Natural Capitalism" is nothing less than an up-to-date business manual for the next century, complete with clear explanations and solid, real world examples. Their thinking finds common ground between business and environmental interests and makes the common sense case for how the two outlooks are merging into a new, practical, eco-friendly approach to making a profit.

Just as business and civic leaders in Atlanta and elsewhere are redefining how sprawling cities should grow, "Natural Capitalism" redefines how businesses and ultimately the entire planet should grow to sustain a prosperous and equitable quality of life for the indefinite future.


Beyond Darwin   January 4, 2000
Robert Morris (Dallas, Texas)
87 out of 99 found this review helpful

As this new century begins, if there is only one book which everyone on the planet should read, it would be Natural Capitalism. Why is it so important? In my opinion, because it provides the most convincing, the most compelling argument in support of Wendell Berry's assertion that "what is good for the world will be good for us." Darwin's concept of natural selection becomes irrelevant if there is no environment in which such selection can occur. The authors introduce us to "The Next Industrial Revolution" with all oif its emerging possibilities. In subsequent chapters, they continue to examine natural capitalism in terms of "four central strategies": radical resource productivity, biomimicry, service and flow economy, and investment in it. According to the authors, natural capitalism "is about choices we can make that can start to tip economic and social outcomes in positive directions. And it is already occurring -- because it is necessary, possible, and practrical." For me, the information provided in Chapter 3 was almost incomprehensible in terms of the nature and extent of waste. Of the $9 trillion spent every year in the United States, at least $2 trillion is wasted annually. How? For example: Highway accidents ($150 billion), highway congestion ($100 billion in lost productivity), total hidden costs of driving (nearly $1 trillion), nonessential/fraudulent healthcare ($65 billion), inflated and unnecessary medical overhead ($250 billion), and crime ($450 billion). All of this waste can and should be reduced, if not eliminated. What the authors present, in effect, is a blueprint for the survival of the planet. All manner of statistical evidence supports their specific recommendations. Unless "The Next Industrial Revolution" succeeds in implementing those recommendations, natural capitalism will eventually be depleted ...and no one left to regret its loss.


Compliments and Complement   November 9, 1999
31 out of 35 found this review helpful

Paul Hawken is an excellent writer, clear thinker and first-rate synthesizer; Amory Lovins is a genius; and Hunter Lovins is a world-class organizer and positive force. So it's not surprising that this team has written a very important, must-read book. Capitalism does have its advantages after all, but as it is currently practiced it will lead us to our collective grave. Fortunately the dynamic trio, shows better ways of doing business.

For those of us who aren't CEO sorts (and can't immediately implement the type of innovations Natural Capitalism advocates), yet who still want their financial life to move us in a positive direction, I highly recommend The Mindful Money Guide. This book is an excellent complement to Natural Capitalism as it thoughtfully guides us to a healthier (in all senses of the word) and simpler financial life. It's also very well written.


The One Book That Can Save Capitalism & The Planet   December 12, 2006
Robert D. Steele (Oakton, VA United States)
15 out of 16 found this review helpful

Edit of 19 Jan 08 to add links.

This book is pro-business, pro-market, and pro-life. It outlines how profits can be made by going green and getting in touch with the actual cost of goods and services. It demonstrates how efficiencies can produce a 71% per year after tax Return on Investment (ROI).

On page 261, the following quote summarizes the intellectual victory that this book represents over economic fundamentalism: "That theology treats living things as dead, nature as a nuisance, several billion years' design experience as casually discard able, and the future as worthless."

The three authors are "originals" whose genius dates back to the 1980's, and I am finding that the books written in the 1970's and 1980's were a quarter-century before their time of acceptance, and now pressing urgent and relevant.

They advocate a shift from a production economy that disregards the actual costs of goods, toward a service economy in which durability, ease of repair, and the elimination of waste transforms commerce so that we have sustainable profit, not short-term destructive profit.

The basic premise of the book is that in the next 100 years the population will double while available natural resources will drop by one half to three quarters.

The authors are damningly trenchant when they point out that we have taken just 300 years to consume 3.8 billion years of natural capital by turning scarce resources into permanent waste.

I am at one with these authors when they suggest that labor is now abundant--I for one believe that national leaders must demand full employment and cease substituting technology, which requires natural capital, for human capital. We need to reverse the process and restore full employment, community-based resource allocation.

In the course of two days with this book, I pulled 21 key ideas that I list here in tribute to these authors and their work:

1) Cars can generate electricity during the 90% of the time they are parked, and this will allow the replacement of ALL coal and nuclear plants

2) We waste 1 million pounds per person per year in the USA

3) Authors are saving business, not fighting business

4) Two trillion out of nine trillion in the total economy per year is waste of no value, including time spent in automobile gridlock

5) Real-time feedback is the number one resource saver

6) Biological processes create Kevlar strength silk (spiders) and walls (oysters)--we should emulate them instead of continuing our toxic ways.

7) Green buildings increase human productivity while reducing waste

8) Continuous education of designers and engineers is the single best investment for continually updating our ability to eliminate waste

9) Point to point air travel in smaller more numerous aircraft is a much more efficient alterative to the hub systems

10) We must end our perverse subsidies of wasteful agricultural, energy, forestry, fishery and other harmful practices by publicizing the foolish budget allocations

11) We should tax pollution and waste rather than income

12) Agricultural residues can be used to make paper, which can be recycled and substituted (e.g. electronic). We must end junk mail and unneeded packaging that outlasts its contents.

13) Restore localized agriculture, deep sustainable farming that does not deplete topsoil, get smart on water and fuel consumption.

14) Get a national water policy and water education, recover all rain (which can meet all of Africa's needs), use gray water; get a grip on toilets to include separate capture of urine and feces.

15) Protect the climate

16) Conserving energy is cheaper, faster, better than trying to produce more

17) Canceling or updating antiquated laws long overdue (for example, giving away billions of gold based on 1800 laws, for pennies)

18) Adjust prices to reflect external costs

19) Implement no fault insurance purchased at the pump

20) Create information feedback loops at all levels

21) Need systemic approach (what I call the ten threats, twelve policies, eight challengers) to avoid unintended spill-over consequences

22) The market cannot do it all. We need government.

Above all intelligence and information can make this happen. Simply labeling switches allows localized awareness and individual actions to save energy. The lack of accurate and up to date information is the largest correctible deficiency

I put this book down hoping that I might one day be able to take the secret intelligence budget of $60 billion a year, cut it by two thirds, and apply one third of that budget to implementing this book's ideas, and one third to creating a new form of global education that is continuous, free, online, in every language, and equally balanced between structured human teaching, interactive social networking, and self-paced online learning through serious games.

There is plenty of money and plenty of brainpower to save our planet and our quality of life while elevating the five billion poor, what we lack is inspired political transpartisan leadership, and a model, perhaps a model to be created in British Columbia, Washington, and Oregon.

I want to be part of this "big push" and am in awe of these authors and the big ideas they represent.

My top ten green to gold books:
The Limits to Growth
Seven Tomorrows
Silent Spring
Ecological Economics: Principles And Applications
High Noon 20 Global Problems, 20 Years to Solve Them
The Future of Life
Plan B 3.0: Mobilizing to Save Civilization, Third Edition
Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage
Cradle to Cradle: Remaking the Way We Make Things

I would also point with enormous respect to books on green chemistry, beneficial bacteria, sustainable design, and what I think of as the "home rule" literature: an end to corporate personality, localized agriculture, localized credit (e.g. Interra Project), and an end to absentee landlords and mega farms that produce indigestible corn for cattle whose waste gets into our spinach, and for fuel (one tank of ethanol consumes enough corn to feed an individual for an entire year).


A Breath of Fresh Air   August 30, 2000
Brian Maurizi (Sacramento, CA)
11 out of 11 found this review helpful

I thought this book was amazing- I came upon it in the most random way (another book by the same author was lying around my office) and, wow, it was worth it! I doubted that it could deliver on its sweeping claim from the first chapter, but deliver it did, and then some. Some of the most compelling ideas that I found were: The beautiful aquariums set into the architecture of a company headquarters- that was also a sewage treatment facility! The fact that simply changing the piping setup for installing a backup water pump can vastly improve the efficiency (and the bottom line)of a factory. And, perhaps the most eye-opening chapter for me, the city of Curitiba in Brazil that was completely renovated under the watch of visionary city planners with (for example) the most effective bus system in the world. If any of these things pique your curiosity, READ THIS BOOK. It goes from the most nitty-gritty considerations of what gadge wire should be used in building codes to the most far-reaching aspirations of how our civilization is capable of reforming itself. I am nineteen years old, I've read lots of books, and this is one of the five best, hands down. I have since checked out the Rocky Mountain Institute (the organization that produced the book) and I am hoping to intern there one day. That is how important Natural Capitalism is.