Thursday, June 5, 2014

A Road Map for Natural Capitalism (HBR, 1999)

Natural capitalism comprises four major shifts in business practices. The first involves dramatically increasing the productivity of natural resources—by as much as 100-fold. In the second stage, companies adopt closed-loop production systems that yield no waste or toxicity. The third stage requires a fundamental change of business model—from selling products to delivering services. For example, instead of selling lightbulbs, a manufacturer sells lighting services, with both the seller and the customer benefiting from the development of extremely efficient, durable bulbs. The last stage involves reinvesting in natural capital to restore, sustain, and expand the planet’s ecosystem. 
Because natural capitalism is both necessary and profitable, it will subsume traditional industrialism, the authors argue, just as industrialism subsumed agrarianism. And the companies that are furthest down the road will have the competitive edge.