Natural Capitalism: definition & examples
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- Опубликовано: 14 мар 2016
- This whiteboard animation video presents the concept of Natural Capitalism: a way of doing business that recognizes the market value of natural and human resources and life-supporting ecological services. In a nutshell, natural capitalism means taking good care of the goose that lays the golden egg: what nature provides for your business should be on your balance sheet.
Natural Capitalism Book: Creating the Next Industrial Revolution -- amzn.to/2PyEYJF (by Paul Hawken, Amory Lovins & L. Hunter Lovins)
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en.wikipedia.org/wiki/Natural...
en.wikipedia.org/wiki/Collaps...
www.natcap.org
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Transcript:
What is natural capitalism? It is a way of doing business that recognizes the value of natural and human resources and life-supporting ecological services. Here's a story to illustrate.
In the 1950's in the Atlantic northwest, equipment and technology made it possible to fish cod faster than the fish stocks could replenish. The cod was treated like an infinite resource; no financial value was assigned to cod in the balance sheets, but income from selling the fish was. Using financial language, essentially we liquidated our capital of cod and called it income. In 40 short years, the northern cod biomass fell to 1% and in 1992, the Canadian government declared a moratorium, ending the region's 500-year run with the Northern Cod.
As discussed in our triple bottom line video, the economy is part of society, which is part of the environment. This means all economic and social progress ultimately depends on the environment, the largest circle. That's natural capital: the ecosystem services and natural resources that we need to survive and thrive. The middle circle represents society, or the human capital. Our economy is the smallest circle because it is governed by the rules, regulations and structures of the other two circles. The economy depends on human capital and natural capital to thrive. In the collapse of the Northern Atlantic cod fishery, the environment circle of cod was destroyed when the fish were gone. Then the social circle of fishing communities on the eastern coast of Canada was badly damaged when people were out of work, and with it the economic viability of the cod fisheries.
What would a natural capitalism approach to this issue have looked like? Well, it would have meant:
Feeding people and increasing material welfare by providing fish without impacting our resources and ecological systems
Imitating nature (also known as biomimicry) in the fishing processes and products: managing cod as a living resource and making sure it is not removed from the ocean faster than it naturally replenishes
And focusing on the service being provided (feeding people) and not only the product that provides it (the cod). This would have helped to create sustainable business models that feed people and support fishing communities while culling fewer fish. In other industries, focusing on the service rather than the product is called "dematerialization" and this will be the subject of another video.
Here is an another example about an every day product that we can all relate to. Say you are a clothing company making and selling jeans. What would accounting for natural capital look like? The value of cotton for fabric of course, but also the plants used to make the dye that gives the jeans their colour; copper and steel for rivets and zippers; plastic and leather for labels; and even the raw material for the machinery needed for dyeing, spinning, weaving, etc.. It would also include the value of the human capital wherever the jeans are made. All of this would be added to the production costs and compared with the income generated by selling the clothes.
In a nutshell, natural capitalism means taking good care of the golden goose so it keeps on giving: what nature provides for your business should be on your balance sheet.
Businesses all over the world are innovating and gaining competitive advantage from applying the natural capital business model. I'll share some stories about some of these companies in future videos. I'll also be sharing videos on circular economy, biomimicry and the associated business opportunities, so stay tuned!
Nice explanation
Wonderful! Thanks!
I love this.
"Businesses all over the world are innovating and gaining competitive advantage from applying the natural capital business model. I’ll share some stories about some of these companies in future videos."
That sounds really interesting, I'm looking forward to hearing those stories. Currently I feel a bit confused how companies get a competitive advantage in a society where money takes priority, but I'm hoping those stories will clear it up for me.
+numgun Hi, I have a couple of videos to post before getting to that but in the meantime, you can read about the success of the company InterfaceFLOR over the last two decades and the story of their CEO Ray Anderson. You will find a lot online but here is one of my favourite as a teaser :-) ruclips.net/video/9qrQKA0xMko/видео.html
It doesn't but pure socialism never works, so...
I noticed that your jeans anaolgy didn't mention that every step that was discussed is dependant on huge amounts of energy. So jeans are really made from energy. See Nate Hagens for an explanation.
Thanks for your comment Scott! This is exactly right. I tried to keep it simple for the sake of this video on "natural capital" by listing mostly things extracted directly from nature but like with most manufactured items, energy is a major part of how jeans are made. If one was to assess how sustainably the jeans are made, the way the energy used to create them is generated (from nature) should be taken into account.
Energy is always the forgotten aspect since it has become so cheap compared to human labor. 1 barrel of oil contains the same energy as 11 man years. See Nate Hagens. ruclips.net/video/YUSpsT6Oqrg/видео.html
Will whomever reads my comment - if you can, please tell me where I can find a free PDF of their book.
Thank you very much.
I have no idea if the books by Amory Lovins is available in PDF nor where to find it. Sorry.
First of all: kudos for all your great videos ... they are great work and a great introduction in the topic and a valuable source for activists and educators :-)
While i can fully understand that the concept behind this videos is to make short and easily comprehensive sets, I've been missing out the limitations of natural capitalism. While i fully agree, that that externalities shall be included in costing, I also believe that the idea of offsets and Pay for Environmental Services combined will not be enough (Jutta Kill has summarized this critique really nicely: www.rosalux.de/fileadmin/rls_uploads/pdfs/sonst_publikationen/Economic-Valuation-of-Nature.pdf )
I'm sure, that you are aware about much of these limitations (just seems logical from the course of your videos) and was curious if you have planned to pick this up in any of your future videos?
Hi Ingeborg, thank you for your insightful comment.
On a personal level and as a sustainability consultant, I totally agree with your comment and I don't think we should put a price tag on natural systems. This video is a just a neutral explanation of what natural capitalism is about for people who are new to the concept. I also believe that capitalism being part of our problem (as Naomi Klein explained very elegantly in her book "This changes everything: Capitalism vs. the Climate) and that we can't solve our sustainability by using the same way of thinking that got us there. This being said, the concept of Natural Capital can maybe help businesses who are not familiar with this concept, understand how their organization relies on natural resources and that it is their responsibility to manage those resources and use as few as possible.
Carbon offset is a great example of that. My wife used to say that "carbon offset is like beating your wife and then donating to the woman shelter". While it can help temporarily, it does not address the root cause of the problem :-)
RIP Amory Loins, and Eustace Mullins before him.
What humans are doing now is the same as this according to the video: while we give the golden egg a lot of value, we do not place any value on the hen that lays the egg. 3:29
Or you recognise the exploitation that is needed for capitalism and make a system change to a system that is not based on that.
Thank you for sharing your opinion!
imagine capitalists actually giving a fuck about humans and environment