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February 17, 2000

Book Review: Natural Capitalism
    by Philip Johansson

Three visionaries give practical steps toward the next industrial revolution, where business is NOT as usual.

SocialFunds.com -- In 1993, Paul Hawken revolutionized economic theory with the publication of "The Ecology of Commerce," a book that pioneered the concept of sustainable business practices. Now Hawken has teamed up with Amory and L. Hunter Lovins, founders of Rocky Mountain Institute, to put that economic theory into more practical suggestions for companies to pioneer a sustainable future.

In "Natural Capitalism," the authors replace the world's economy to its rightful position within the larger economy of natural resources and ecosystem services that sustain us. This is done simply by attributing value to things not normally found on the books, from human intelligence and cultures to hydrocarbons, minerals, trees, and microscopic fungi.

The authors firmly plant the idea that only through recognizing this essential relationship with the earth's valuable resources can businesses, and the people they support, continue to exist.

"We believe that the world stands on the threshold of basic changes in the conditions of business," they write. "Companies that ignore the message of natural capitalism do so at their peril."

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.

But Natural Capitalism is more than a philosophical discourse expanding on the tired old "three Rs", Reduce, Reuse, and Recycle. It provides concrete suggestions and examples that can bring this message home to business leaders, in the areas of transportation, house construction, materials development, design, and more.

Amory and L. Hunter Lovins bring a wealth of practical experience from Rocky Mountain Institute, a nonprofit resource policy center and startup incubator that advises dozens of leading firms on sustainability issues. For example, they have pioneered the design of hybrid-electric cars, or Hypercars, that stand to produce negligible pollution and reach fuel efficiencies of up to 200 miles per gallon.

"The automobile industry of the late twentieth century is arguably the highest expression of the Iron Age," write the authors. Hypercars, on the other hand, would require about 92 percent less iron and steel, one-third less aluminum, three-fifths less rubber, and up to four-fifths less platinum, nominating them as the flagship for the "next industrial revolution."

Although many of the suggestions in "Natural Capitalism" may seem intuitive to some readers, such as using natural lighting or recycling wastewater, the fundamental changes encouraged by the book will not be easy for businesses to accomplish. But easy or not, the authors make a convincing argument that natural capitalism may be the only thing between our future and the Earth's imminent demise.

"To make people better off requires no new theories, and needs only common sense," write the authors. "It is based on the simple proposition that ALL capital be valued. While there may be no 'right' way to value a forest, a river, or a child, the wrong way is to give it no value at all."

Natural Capitalism: Creating the Next Industrial Revolution By Paul Hawken, Amory Lovins, and L. Hunter Lovins. Little, Brown and Company. 1999.

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