From Karl-Henrik Robért, founder of the Natural Step, on flexible fees and strategy.

1. Flexible fees from a strategic sustainability
perspective
Logics revolving around defined purpose
Karl-Henrik Robèrt
Blekinge Institute of Technology, Karlskrona Sweden
The Natural Step, Stockholm Sweden
© 2011 The Natural Step
September 2011

2. Sustainable Development
- A Dynamic Challenge
The ’funnel ’of declining potential to sustain human society
Systematic decline
Forests
Agriculture
Fisheries
Ground water
Climate
Metals
POP’s
Eutrophy
Hormones
Loss of trust
Segregation
Corruption
time Epidemias
Poverty
...
© 2011 The Natural Step

3. Profitable Also in Loneliness
Opportunities
Resource management
Waste management
Tax, legislation,
insurance, loans
New markets
Innovation/design
Trust
Productivity,
Transaction costs
Brand
Stories of meaning
Team building
time Community
…
© 2011 The Natural Step

4. So, what’s the problem?
© 2011 The Natural Step

5. 1. The power of old paradigm assumptions
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6. Cylinder vs Funnel paradigm
An Impact perspective A Systems perspective
It is believed that... In reality...
...sustainable development is to fix ...costs move towards infinity so S.D
social/ecological damage when the costs is to strategically eradicate the systemic
for this are lower than the economic utility errors at the best prize.
...the incetives to undertake measures ...the incentives to undertake measures
are mainly based on ethics are ethical and self-beneficial
...competetive edge is lost when ...role models get competetive advantage
measures are not launched with and create momentum for international
international agreements and policies agreements and policies
© 2011 The Natural Step

7. 1. The power of old paradigm assumptions
2. Reductionism
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8. ate
s clim
alth
ue”
”
distru ol cause
”
ue effect?
he
iss use
re sc
”
n
ption
or
t a reenho
the
n
no he g
Cf
“Etha
g
n
mi ron out
t
to
-PV
r
wa e i ol
han
l nw ter?
ba r win
Et
o Ca
Gl
“
clea
“ “ rming
wa
or nu
G lobal proces
s”
ural
tion is a nat
s extinc
“Specie
or health”
“PVC ”
en -house gases
“Whole list of gre
“Electric cars too
Reductionism expensive.”
“Mankind can not save ev
ery other beetle”
getting lost in the leaves
© 2011 The Natural Step

9. No unifying framework
Reductionism
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10. Unifying framework
Structured overview, like in a clinical conference
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11. Backcasting from Principles
Principles for
success
• Necessary
• Enough
• General
• Concrete
• Non-overlapping
time
© 2011 The Natural Step

12. Unique deliverables of such principles
• Systematic and strict, yet open ended approach
• Trade-offs manageable
• System boundaries are set by purpose
• Resource potentials calculable
• Avoiding unknown problems
• Effective cooperation across value chains and stakeholders
• Community building
• Optimization of bottom line chances
© 2011 The Natural Step
Copyright © 2004 The Natural Step

13. Testning i bolag...
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14. Billions earned…
“ It was not until at least ten years later we
understood how much money Electrolux
had saved and earned from applying the
framework to foresee changes on the
market and in legislation.
”
© 2011 The Natural Step

15. Billions earned…
“ As we climb mount Sustainability, with the four
sustainability principles at the top, we are doing better
than ever on bottom line business.
This is not at the cost of social or ecological systems,
but at the cost of our competitors who still haven’t got it.
”
Ray Andersson
President, Founder and CEO, Interface. Inc.
Portland US, October 2007,
© 2011 The Natural Step

16. Clinical conference from value chains to
communities and cities…
© 2011 The Natural Step

17. Hundreds of Municipalities/Cities
Hu
• Övertorneå • Ottawa
• Robertsfors • Saskatoon
• Morbegno • Wolfville
• Valtellina • Madison
• Livigno • Ashland
• Dublin • Portsmouth
• Whistler • Lawrence Township
• North Vancouver • Twin Ports
• Canmore • Duluth
• Halifax • County of Hawaii
• ...
time
© 2011 The Natural Step

18. “This simple, science- and systems-
based framework is the best out there.
It needs to become part of a new
common language, as well understood
Ken Melamed worldwide as the rules of soccer”.
Mayor
Whistler, Canada
© 2011 The Natural Step

19. 1. The power of old paradigm assumptions
2. Reductionism
3. Also with very clever systems thinkers and
strategic planners: pace of transition too slow*
* Learning curve, scale, market-assumptions etc.
© 2011 The Natural Step

20. Examples of outreach from proactive corporations
– knowledge in combination with pragmatism –
• Asking for higher tax
• Asking for tougher legislation
• Complementary currencies (local, regional, global)
Differentiated fees...
© 2011 The Natural Step

21. © 2011 The Natural Step

22. Strategic Sustainable Development and
Flexible Fees
• The current new-paradigm incompetence amongst our leaders implies an
unexploited competitive opportunity also within current economic system.
• However, new economic means are needed to increase pace of S.D, and to move
latecomers.
• No silver bullet, but combined with robust sustainability on the table and a balance
between magnitude and timing of prizing, flexible fees offers an elegant pragmatic
means for policy making to support strategic sustainable development.
• Flexible fees would benefit from:
(i) Further exploration of underpinning assumptions e.g. a fairer outline of green
taxes.
(ii) Exploration of other objectives than those linked to flows e.g. halting encroaching and
mismanagement of fertile land and waters, and a "humanization" of the economy.
You cannot play chess against one principle of checkmate at a time.
(iii) Exploration of the landscape for policy making, and how this could be improved for
© 2011 The Natural Step
the implementation of flexible fees.

23. “Would you tell me, please, which way I
ought to go from here?” asked Alice.
“That depends a good deal on where you
want to get to,” said the cat. “I don’t much
care where,” said Alice. “Then it doesn’t
matter which way you go,” said the cat.
© 2011 The Natural Step

24. Applying the Framework in four steps
- ABCD planning process
The funnel
A Understanding
sustainability
Brainstorm
C solutions Vision
Mission Vision within
Core values
sustainability
Strategic goals principles
Today
Baseline analysis
B Whereisare we today? Prioritization & action planning
What the gap?
D • Right direction?
• Flexible?
• Economic enough?
© 2011 The Natural Step

25. Modelling… from the Globe down
into Drillholes
A B C
C ... ...
B
D ... ...
... ...
 J  &&
m2u3 +  m2 rw +
&& φ = ci u1 − ci u3 + k iu1 − ki u3 ...
& &
 rw 
Actions
© 2011 The Natural Step

26. © 2011 The Natural Step

27. Forecasting: Planning from trends in rear-
view mirror, minus problems (”Cylinder
paradigm”)
•”Nothing is harmless”
•”Little harm as possible”
•”X% better than before”
•”More science needed”
”Expert-drift” and
detachment from
leadership
© 2011 The Natural Step

28. Backcasting: Success in whole
system through front screen (Funnel
paradigm)
• ”These are our objectives…”
• ”This is the gap…”
• ”We have done this…”
• ”We are going to do this…”
Leadership from overview (vision),
community (shepard) and support
(coach)
Begin game immidiately
Celebrate early wins
Gray areas from experience
Develop tools as needed (and ask
masters students for help)
© 2011 The Natural Step

29. Indicators
METAL IN TOP WEATHERING MINING FOSSIL F (M+F) / W
SOIL (W) (M) (F)
(MG/KG) (KTON/YEAR) (KTON/YEAR (KTON/YEAR)
)
Al 72 000 1 100 000 18 000 34 000 0,047
Fe 26 000 390 000 540 000 34 000 1,5
Ti 2 900 44 000 2 500 1 700 0,095
Cr 54 830 3 800 34 4,6
Cu 25 380 9 000 55 24
Pb 19 290 3 300 85 12
Cd 0,35 5,3 20 3,4 4,4
Hg 0,09 1,4 5,2 10 11
(table from Azar, C., J. Holmberg and K. Lindgren. 1996. Socio-ecological indicators for
sustainability. Ecological Economics 18: 89-112, listed in Course Outline: Additional
Readings)
© 2011 The Natural Step

30. Put into Clinical Conference in
International Research: Real Change
Volume: from 1 to10 M USD in 3 years
Not counting education Product-Service Innovation (Sweden)
Not counting partners input
New Research Alliance launched
Business development (Sweden)
Eco-efficiency (Finland) Algae biomass (Australia)
Energy systems (Sweden) Conflict resolution (Israel)
Traffic systems (Sweden) Industrial metal flows (Norway)
Rainforest ecosystems (Brazil) Green Science / Chemistry (USA)
Water management (Netherlands)
© 2011 The Natural Step

31. • Purpose: To explore, test and
share unifying framework.
• International NGO
• Role models
• Areas of action:
– Research
– Training
– Coaching
– Advice
© 2011 The Natural Step