Precis: A Roadmap for Natural Capitalism

by Vanessa Lord

In “A Road Map for Natural Capitalism,” the authors contend that altering business practices in ways that will help save the environment can ultimately improve a business’ bottom line and make it more competitive in the future economy. The article appeared in the Harvard Business Review—a journal for the current and future business leaders of America—ten years ago. The authors’ argument seeks to find an acceptable compromise between pursuit of two seemingly exclusive goals: a compromise between the protection of the earth’s natural resources and a business’ ability to make a substantial profit in a capitalist society. They say, “The reason companies (and governments) are so prodigal with ecosystem services is that the value of those services doesn’t appear on the business balance sheet. But that’s a staggering omission. The economy, after all, is embedded in the environment.” For the authors, wasteful consumption of natural resources in the modern economy is not only bad for the environment and for the future of our planet, it’s just plain bad business. From that follows the idea that if we start practicing business the way it was intended—by economizing our scarcest resources—we will save the environment in the process. Explicitly, it states its thesis as, “Business strategies built around the radically more productive use of natural resources can solve many environmental problems at a profit.” The article serves as an instructional roadmap for the future business leaders of America to follow as they make business decisions. The authors contend that there are four main stops on the “roadmap”:
1. dramatically increase the productivity of natural resources
2. shift to biologically inspired production models
3. move to a solutions based business model
4. reinvest in natural capital

The argument is particularly compelling, especially to the business set, because it is essentially comforting. The other environmentalists were too doomsday, the authors seem to say. It is not our lifestyle behavior that needs to be drastically changed in order to save the planet; business leaders just have to start practicing smarter business practices. Other texts we have analyzed in this class offered solutions that would be much more difficult to implicate—solutions that involve changing an entire way of life. This article lends hope to the idea that we aren’t doomed after all: we just have to, once again, trust in sturdy old capitalism.
The authors assume (and probably accurately so) that its readers—business leaders and future business leaders—will agree that markets can be predictable, trusted, and, when managed correctly, will result in profit for companies. The evidence in support of practicing each of the four roadmap points consists of statistics surrounding the successful bottom lines of companies who have followed these practices. It details how certain businesses have drastically minimized their use of natural resources while maximizing their profits, and it explains the way new technologies could do more of the same for more businesses in the future. It reads the same way a letter from a consultant written to the CEO of a big firm would read: namely, this is how you can cut costs and increase your bottom line.

Business jargon doesn’t seem out of place in a business journal, but the authors incorporate a discourse of nature into the text as well. In the authors’ argument, words like capital, value, and bottom line now seem to be applicable to environmental issues. The authors distinguish a drastic difference between natural resources and “ecosystem services,” (they say that is the distinction between exploitable resources, like petroleum that can be sold for profit, and the services that the earth provides for free, like maintainence of habitats and climates, etc.), and they put forth the term “natural capitalism” as their idea of what the future of capitalism will become if it follows the traditional capitalist logic of capitalizing on the scarcest resources. All of a sudden, mother nature seems to become a key player in big business. Mother nature provides ecosystem services in the sum of $33 trillion a year, they say. The article’s essential argument depends on these neologisms that work by combining environment and business, like “natural capitalism” and “ecosystem services.” These phrases are the rhetorical integration of our economical and ecological goals, and they are signifiers for the conceptual integration of those goals.

The “broken compass” serves as a recurring metaphor throughout the text. The compass stands for capitalism, essentially—for an invisible hand phenomenon. The fact that the compass is “broken” is indicative of the authors’ belief that “the instruments companies use to set their targets, measure their performance, and hand out rewards are faulty. In other words, the markets are full of distortions and perverse incentives.” The compass is still set on the premises of the world during the Industrial Revolution. If we reestabish these mechanisms, namely, fix the compass, capitalism will be successful, and as an added advantage we can do this in a way that preserves natural resources, the authors say. The compass metaphor is consistent with the use of the term “roadmap” as the title for the article. Both are interesting terms because they connote the type of tools pionneers used when first exploring nature in the sense of unknown territory. Pioneers used compasses when they explored, created maps, chartered terrain—when these pioneers, in a sense, made the natural world knowable and managable in the realm of the social construct of humankind. Similarly, with natural capitalism, ecological systems can become a part of the realm of capitalism.

Yet the authors seem to directly contradict their argument, and to finally get one thing irrefutably right, when they say: “In the industrial system, we can easily exchange machinery for labor. But no technology or amount of money can substitute for a stable climate and productive biosphere. Even proper pricing can’t replace the priceless.” But isn’t natural capitalism doing just that—putting a price on the priceless? The authors admit we cannot put a price on a stable climate and a productive biosphere, why then can we include ecosystem services as a integral aspect of the money-oriented “bottom lines” of the businesses that engage in “natural capitalism”?

Vanessa Lord