Natural capitalism involves four shifts in business practices: (1) radically increasing resource productivity, (2) shifting to biologically-inspired closed-loop production models that eliminate waste, (3) moving from selling goods to selling solutions through leasing models, and (4) reinvesting in natural capital to ensure future resource availability and gain a reputation for environmental stewardship. Examples provided illustrate how companies have implemented these shifts to reduce costs, create new revenue streams, and build their brand through greater sustainability.

1. The Basics of Natural Capitalism Natural capitalism -- what our economic system would look like if the ecosystem services were truly valued -- entails four basic shifts in business practice. Source: Peter Senge, Don Seville, Amory Lovins and Chris Lotspeich, Systems Thinking Primer for Natural Capitalism: Four Basic Shifts , Rocky Mountain Institute, September, 2000

2. When labor was scarce and nature seemed unlimited, the First Industrial Revolution made labor 100 times more productive. Now that people are abundant and nature is scarce, the Next Industrial Revolution will raise natural resource productivity 10- to 100-fold. Such radically efficient solutions are possible today through design that optimizes whole systems for multiple benefits—not isolated components for single benefits. Rocky Mountain Institute The First Industrial Revolution Labor is scarce, resources are abundant The Next Industrial Revolution People are abundant, resources are scarce

3. Shift #1: Radical Resource Productivity — dramatically increase the productivity of natural resources Increasing resource productivity means getting more product out of each ton of natural material extracted. Changes in technology can create ways to stretch natural resources 5, 10, even 100 times further than they do today. And these resources savings can easily save money and increase profits. Essential Argument : saving resources is possible, helping the environment and saving money

5. Tide Coldwater Tide Coldwater is a line extension of Tide that is helping it build brand equity and stay fresh in the marketplace. A Life Cycle Assessment found that 80%-85% of the energy used to wash clothes comes from heating the water. P&G calculated that US consumers could save $63 per year by washing in cold water rather than warm. So, P&G positioned the product as a way to save on energy bills.

6. The Sierra Nevada Brewery has installed a 1-megawatt fuel-cell power plant that is fueled by digester gases given off in the beer production process. The system provides virtually 100 percent of Sierra Nevada’s base load requirements. The result is high-quality, utility-grade electric power, usable heat from cogeneration, and ultra-clean emissions.

7. The University of New Hampshire has signed a deal with Waste Management to get 80% of the power and heat for its 14,000-student campus, using methane piped in from a nearby landfill. UNH must build a 12.7-mile pipeline to carry the gas, but the $45 million project is expected to save enough to pay for itself in 10 years.

8. Shift #2: Ecological Re-Design — shift to biologically inspired models Shifting to a "closed loop" production system — recycling, re-manufacturing, and industrial ecology. This is focused on the elimination of waste in the system. Such production models seek to emulate nature, where waste from any system is food for another system. Essential Argument : Eliminating waste in production saves resources and money

9. We don’t believe in waste. In fact, we built an industry around it .

10. General Mills used to pay to have its oat hulls, a Cheerios by-product, hauled off to a landfill. Then the company realized the waste could be burned as fuel. Now customers compete to buy the stuff. General Mills recycles over 85% of its solid waste, earning more from that than it had spent on disposal.

12. Shift #3: Service and Flow Economy — Move from producing and selling goods to selling solutions In a traditional goods-based business model, the purchaser has ultimate responsibility for disposition of goods and most are discarded after use. In a solutions-based business model, the producer maintains ownership of goods produced, which encourages "take back" when the productive life is over, remanufacturing and recycling. This requires different expectations for both customers and producers, and fundamentally shifts the relationship between the two. Thus, basic economic arrangements support closed loop production and consumption models. Essential Argument : Moving to leasing models shifts emphasis to providing satisfaction with as little material throughput and waste as possible in the entire economic system.

13. Interface Carpets -- Evergreen Lease™ Selling carpet without selling carpet - Interface is one of the first companies to pioneer a product of service approach to selling carpet. One step closer to closing the loop, this program allows Interface to own the carpet, ensuring proper disposal and no carpet to landfills. Interface produces, installs, cleans, maintains and replaces the carpet for customers. Customers lease the service of keeping a space carpeted, rather than buying carpet. They get the services of a carpet warmth, beauty, color, texture and acoustics. A whole new sustainable business model.

14. Building Vehicles, Selling Mobility Volvo Mobility Services

15. Shift #4: Investment in Natural Capital — reinvest in natural capitalism Businesses must restore and expand the planet’s ecosystems so that they can produce their resources and services even more abundantly. If business do not do so proactively, costs of reinvesting in natural capital will continue to increase with depleting stocks and rising ecological problems, leading to societal pressures through regulation and costly and inefficient governmental actions. Essential Argument : This must be done to ensure that there will be resources in the future and to prevent a reputation of environmental irresponsibility; conversely, increasing environmental stewardship will provide market boost with growing consumer awareness .

16. The Great Green Wall of Africa www.biopact.com/2007/12/eu-and-africa-to-build-green-wall.html Senegal started planting a "Great Green Wall" of trees stretching for nearly 7,000 km, all the way from Dakar to Djibouti, to stop the relentless advance of the Sahara desert The idea is to plant a 5 km wide band of trees crossing the continent from east to west to stop the desert from swallowing arable land.

17. Florida Buying Big Sugar Tract for Everglades

18. Rich Carlson (312) 899-0614 [email_address]