by Judith Curry
There is a new book out entitled “Climate Capitalism: Capitalism in the Age of Climate Change,” by Hunter Lovins and Boyd Cohen, authors of an earlier book entitled “Natural Capitalism: Creating the Next Industrial Revolution“.
Product description from Amazon.com:
- Shai Agassi (Israel), of Better Place
- Ray Anderson (U.S), founder of Interface Flor
- Richard Branson (U.K.) of Virgin and Carbon War Room
- Christina Figueres (Costa Rica) UNFCCC
- Norman Foster (UK) designer of Masdar City in Dubai
- Al Gore (US) of Generation Investment Management
- Van Jones (US) Green for All
- Vinod Khosla (India) Khosla Ventures
- Jaime Lerner (Brazil) Bus Rapid Transit System
- Shi Zhengrong (China) SunTech Power
I haven’t read either of the books, but the authors have published an article in the Harvard Business Review in 2008 that puts forward their main thesis, with the title off this section [link]. A summary of the article is provided here, with excerpts below. Note especially their descriptions of Interface Flor, Ray Anderson’s company:
The earth’s ability to sustain life is in peril—as companies consume natural resources in ways that prevent ecosystems from regenerating our air, water, and food supplies. For example, clear-cutting forests for wood fiber damages forests’ ability to store water, provide animal habitats, and regulate climate.
Why such rampant exploitation? Unlike the value derived from consuming natural resources, the value of ecosystems’ most crucial services don’t appear on balance sheets. Yet that value is worth $33 trillion a year.
You can capture some of that $33 trillion and help restore the planet by practicing natural capitalism—conducting business profitably while also protecting natural resources. Some strategies suggested by Amory Lovins, Hunter Lovins, and Paul Hawken: Adopt technologies that extend natural resources’ usefulness. Design production systems that eliminate costly waste. And reinvest in nature’s capital; for instance, by planting trees to offset power-plant carbon emissions.
Work with nature, and you boost profitability—pulling ahead of rivals who continue to work against nature.
The authors recommend these steps to natural capitalism:
Increase Natural Resources’ Productivity
Develop dramatically more efficient production processes that stretch natural resources—energy, minerals, water, forests—5, 10, even 100 times further than they go today. You’ll ensure that these resources pay for themselves over time. And you may save on initial capital investments.
In its new Shanghai carpet factory, Interface redesigned their process for pumping liquids by using fatter-than-usual pipes, which created less friction than thin pipes do. The move cut power requirements by 92%. The new system also cost less to build, involved no new technology, and worked better than traditional systems in all respects.
Imitate Biological Production Models
In nature, nothing goes to waste. Ensure that every output of your manufacturing processes is composted into useful natural resources or recycled for further production. You’ll preserve ecosystems while eliminating the cost of waste disposal.
Interface invented a new floor-covering material, Solenium, which can be completely recycled into the identical floor product, reducing landfill waste. Solenium lasts four times longer and uses 40% less material than ordinary carpets. It’s toxin-free and stainproof, resists mildew growth, and is easily cleaned with water. Between 1994 and 1998, Interface’s revenues rose by $200 million. Of those revenues, $67 million has been attributed to the company’s decreased waste.
Change Your Business Model
Your customers don’t necessarily need to own your products. Often they merely need to be able to use them. Therefore, consider shifting your business model from selling products to providing services.
Interface realized clients want to walk on and look at carpets—not necessarily own them. So it transformed itself from a company that sells carpets into one that provides floor-covering services. It leases its service for a monthly fee, taking responsibility for keeping its carpets clean and replacing worn carpet tiles. This business model vastly reduces the amount of carpeting sent to landfills. And it improves customers’ productivity by eliminating the need to close offices and remove furniture to replace entire carpets.
I am a big fan of Ray Anderson, who is a Georgia Tech alum. Interface corporate headquarters is in Atlanta, right on the edge of the Georgia Tech campus.
JC comments: climate/natural capitalism has been taking its hits, e.g. problems with the Chicago Climate Exchange, WalMart gives up going green, etc. But it seems like there are sound principles behind this, and some notable success stories. Your thoughts?