Lean manufacturing is an example of whole-system thinking that has helped many companies dramatically reduce such forms of waste as lead times, defect rates, and inventory. In both cases, the biggest leverage comes from reducing the amount of the retail product used. This plus more efficient production processes could cut companies’ long-term materials requirements by more than 90% in most sectors. Designers normally locate the production equipment in arbitrary positions and then have a pipe fitter connect everything. Example: 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. In nature, nothing goes to waste. Choosing big pipes and small pumps—rather than small pipes and big pumps—would therefore make the whole system cost less to build, even before counting its future energy savings. It’s starting to team up with other companies to make buildings more efficient so that they need less air-conditioning, or even none at all, to yield the same level of comfort. Interactions between the small, clean, efficient power source and the ultralight, low-drag auto body then further reduce the weight, cost, and complexity of both. Failure to protect and reinvest in natural capital can also hit a company’s revenues indirectly. http://www.naturalcapitalism.org/images/other/HBR-RMINatCap.pdf "Natural Capitalism." Summarized in the report “Climate: Making Sense and Making Money,” at www.rmi.org/images/other/Climate/C97-13_ClimateMSMM.pdf. The new windows would reduce the flow of heat and noise four times better than traditional windows do. A Road Map for Natural Capitalism (Lovins, Lovins, Hawken, 1999) Chap-1 , Chap-4 , Chap-6 , and Chap-7 from Making Globalization Work ( Joseph Stiglitz , 2007) Bhopal Lives ( Suketu Mehta , 1996). The industry’s infrastructure is hugely expensive and inefficient. ‘A Road Map for Natural Capitalism’, Harvard Business Review, 1999 ‘Natural Capitalism’, Mother Jones, 1997 ‘The Ecology of Commerce: an essay on the responsibility of business to society and the environment’, Inc magazine 1992 6����y2f=����#�����n�%멟ukf�CE����d5njª��-�S�V�r��vؽ�,ca|G~! In most of America’s arid western states, use-it-or-lose-it water laws encourage inefficient water consumption. You’ll ensure that these resources pay for themselves over time. The first involves dramatically increasing the productivity of natural resources—by as much as 100-fold. Whether through better design or through new technologies, reducing waste represents a vast business opportunity. A recent proposal for reallocating the normal 20-year renovation budget for a standard 200,000-square-foot glass-clad office tower near Chicago shows the potential of whole-system design. 3 (May–June 1999): 146–48. Most businesses still operate according to a world view that hasn't changed since the start of the Industrial Revolution. Distribution transformers that supply electricity to buildings and factories, for example, are a minor item at just $320 apiece, and most companies try to save a quick buck by buying the lowest-price models. Second, companies can replace old industrial technologies with new ones, particularly with those based on natural processes and materials. Here, production is increasingly constrained by fish rather than by boats and nets, by forests rather than by chain saws, by fertile topsoil rather than by plows. What’s more, for most of these services, there is no known substitute at any price, and we can’t live without them. Unlike the value derived from consuming natural resources, the value of ecosystems’ most crucial services don’t appear on balance sheets. The automobile industry is particularly ripe for technological change. Some companies do consider more than just the initial price in their purchasing decisions but still don’t go far enough. Two years later, when the radical attempt to replicate the earth’s main ecosystems in miniature ended, the engineered environment was dying. Similar challenges face the coal and electricity industries because the development of the Hypercar is likely to accelerate greatly the commercialization of inexpensive hydrogen fuel cells. Retrieved 2020-01-26. Excess capacity—another form of waste and source of risk—need no longer be retained for meeting peak demand. Industries that directly harvest living resources, such as forestry, farming, and fishing, offer the most suggestive examples. Reinvesting in nature allows farmers, fishermen, and forest managers to match or exceed the high yields and profits sustained by traditional input-intensive, chemically driven practices. Triple Bottom Line: Sustainability and Energy Efficiency. “A road map for natural capitalism.” Harvard business review 77 (1999): 145-161. In round numbers, half of all harvested wood fiber is used for such structural products as lumber; the other half is used for paper and cardboard. First, Schilham chose fatter-than-usual pipes, which create much less friction than thin pipes do and therefore need far less pumping energy. The U.S. economy is not even 10% as energy efficient as the laws of physics allow. We may never become as skillful as spiders, abalone, or trees, but smart designers are already realizing that nature’s environmentally benign chemistry offers attractive alternatives to industrial brute force. Moreover, unlike the traditional factors of industrial production—capital and labor—the biological limiting factors cannot be substituted for one another. Combining closed-loop manufacturing with resource efficiency is especially powerful. 1. The proposal suggested replacing the aging glazing system with a new kind of window that lets in nearly six times more daylight than the old sun-blocking glass units. Decisions to buy small items are typically based on their initial cost rather than their full life-cycle cost, a practice that can add up to major wastage. It also minimizes the disruption that customers experience—worn tiles are seldom found under furniture. “Minimizing overprocessing waste in business processes via predictive activity ordering.” Those that don’t make that effort won’t be a problem because ultimately they won’t be around. For example, companies would gain 18 distinct economic benefits—of which direct energy savings is only one—if they switched from ordinary motors to premium-efficiency motors or from ordinary lighting ballasts (the transformer-like boxes that control fluorescent lamps) to electronic ballasts that automatically dim the lamps to match available daylight. e*ɒ�T Others are still making their way to market, delayed by cultural rather than by economic or technical barriers. Given that cars are left parked—that is, unused—more than 95% of the time, these Hypercars could be plugged into a grid and could then sell back enough electricity to repay as much as half the predicted cost of leasing them. Awkward placement forces the pipes to make numerous bends that greatly increase friction. German law, for example, makes many manufacturers responsible for their products forever, and Japan is following suit. Monthly inspections detect and replace worn carpet tiles. Just the energy thrown off as waste heat by U.S. power stations equals the total energy use of Japan. His redesigned system cost less to build, involved no new technology, and worked better in all respects. �����f����étL5Dƚ(���8�,4����R The result: The customer gets cheaper and better services that cost the supplier far less to produce. It’s toxin-free and stainproof, resists mildew growth, and is easily cleaned with water. Yet that value is worth $33 trillion a year. The costs of these perverse incentives are staggering: $300 billion in annual energy wasted in the United States, and $1 trillion already misallocated to unnecessary air-conditioning equipment and the power supplies to run it (about 40% of the nation’s peak electric load). [�R�?U�e���7ʰ Sl�8�SO��ʠH��z{a� �Gg6�t���a�,o�5a͒*���`�. The easiest savings come from not using paper that’s unwanted or unneeded. Harvard Business Review (July–August 2007). And reinvest in nature’s capital; for instance, by planting trees to offset power-plant carbon emissions. Materials efficiency is even worse: only about 1% of all the materials mobilized to serve America is actually made into products and still in use six months after sale. “A Road Map for Natural Capitalism,” by Amory Lovins, L. Hunter and Paul Hawken, Harvard Business Review (May-June 1999) U.S. Department of Energy, Energy Information Administration, State Energy Data Report 1999; Minnesota Energy Use Rankings in 1999; and Energy Consumption Estimates by Source, 1960-1999, United States: www.eia.doe.gov As they say at 3M: “We’d rather eat our own lunch, thank you.”. Her decision to reject the efficiency-quadrupling renovation proved costly for both her and her client. Many executives pay too little attention to saving resources because they are often a small percentage of total costs (energy costs run to about 2% in most industries). Most companies also miss major opportunities by treating their facilities costs as an overhead to be minimized, typically by laying off engineers, rather than as a profit center to be optimized—by using those engineers to save resources. Paul Hawken: A Road Map for Natural Capitalism (Pdf), in: Harvard Business Review May-June 199, p.155 Amory B. Lovins, L. Hunter Lovins and Paul Hawken: A Road Map for Natural Capitalism (Pdf), in: Harvard Business Review May-June 1999, pp. The profits from saving electricity could be increased even further if companies also incorporated the best off-the-shelf improvements into their building structure and their office, heating, cooling, and other equipment. Consider Interface, a leading maker of materials for commercial interiors. The increase in damage is strongly linked to deforestation and climate change, factors that accelerate the frequency and severity of natural disasters and are the consequences of inefficient industrialization. These technologies make it feasible to manufacture pollution-free, high-performance cars, sport utilities, pickup trucks, and vans that get 80 to 200 miles per gallon (or its energy equivalent in other fuels). The answer is simple: Scores of common practices in both the private and public sectors systematically reward companies for wasting natural resources and penalize them for boosting resource productivity. Amory B. Lovins, L. Hunter Lovins and Paul Hawken: A Road Map for Natural Capitalism Archived 2006-03-07 at the Wayback Machine (Pdf), in: Harvard Business Review May-June 1999, pp. Example: Engineering company Living Technologies has developed a system that uses linked tanks of bacteria, algae, and plants to turn sewage into clean water. In China’s Yangtze basin in 1998, for example, deforestation triggered flooding that killed 3,700 people, dislocated 223 million, and inundated 60 million acres of cropland. Lovins, Amory B., L. Hunter Lovins, and Paul Hawken. Energy-saving, productivity-enhancing improvements can often be achieved at even lower cost by piggybacking them onto the periodic renovations that all buildings and factories need. The value to the economy of the services provided by the earth’s ecosystem—as distinct from the value of the natural resources we extract from it—runs into tens of trillions of dollars annually, say the authors. Hypercars and their cousins could ultimately save as much oil as OPEC now sells. "A Road Map for Natural Capitalism". This business model vastly reduces the amount of carpeting sent to landfills. 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. The ecosystem is a supplier of key components for the life of the planet, and it is now falling behind on its orders. Natural capitalism comprises four major shifts in business practices. Later we’ll look in more detail at some of the obstacles to resource productivity—and some of the important business opportunities they reveal. Trees turn sunlight, water, soil, and air into cellulose, a sugar stronger than nylon but one-fourth as dense. Extract of sample ", a road map for natural capitalism" Case Study, A Road Map for Natural Capitalism For a fact, the late twentieth century witnessed a lot of changes in the globe,and this provided a shift in the way individuals’ acts and think concerning various economic, political and even and social issues. In short, even though the road seems clear, the compass that companies use to direct their journey is broken. The Environment and Society Reader A Declaration of Sustainability 2001 Boston: Allyn and Bacon Only Connect: Soil, Soul, Society. 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. In addition to its drive to eliminate waste, Interface has made a fundamental shift in its business model—the third stage on the journey toward natural capitalism. The new system also cost less to build, involved no new technology, and worked better than traditional systems in all respects. Some very simple changes to the way we run our businesses, built on advanced techniques for making resources more productive, can yield startling benefits both for today’s shareholders and for future generations. Savory’s solution is to keep the cattle moving from place to place, grazing intensively but briefly at each site, so that they mimic the dense but constantly moving herds of native grazing animals that coevolved with grasslands. , you agree to the ecosystem is a handy way to market delayed. A dozen languages and was the subject of a Harvard business Review summary Sustainability into account ll gain a good—it. 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