The Natural Step,
Natural Capitalism &
Conscious Capitalism
in the XXIst century
Terry Thiele
4 December 2014
Corporate Roundtable
Applying old tools
to entirely new circumstances
1
pro·voc·a·tive
prəˈväkədiv/
adjective
1.causing annoyance, anger, or
another strong reaction, especially
deliberately. "a provocative article“
synonyms: annoying, irritating, exasperating,
infuriating, maddening, vexing, galling
2
cur·mudg·eon
kərˈməjən/
noun
a bad-tempered or surly person.
3
THESIS:
Sustainability thinking
in the XXth Century
will have to be “rethought”
for the XXIst Century.
EVIDENCE: emergence of
TNS, Natural / Conscious Capitalism
4
Capitalism & the Industrial Revolution
5
Adam Smith
and Life-cycle Assessment
The Industrial Revolution!
Capital
MASS
PRODUCED
GOODS
Individually made  MASS PRODUCED
6
Adam Smith
and Life-cycle Assessment
1st Industrial Revolution - early
 Energy: open-flame boilers/coal/steam
 Transportation: horses
 Communication: telegraph
Mass production  numerous industries
Round trip by
horse
Adam Smith
and Life-cycle Assessment
1st Industrial Revolution - mature
 Energy: open-flame boilers/coal/steam
 Transportation: horses/railroads
 Communication: telegraph
Water refill for steam locomotive
Towns spread out - industries consolidate
Adam Smith
and Life-cycle Assessment
2nd Industrial Revolution
 Energy: internal combustion engine/oil/electricity
 Transportation: automobiles/trucks/airplanes
 Communication: telephone/television
 Urbanization
Global concentration
Adam Smith
and Life-cycle Assessment
Mass Production and the Environment
“In 1882, A.W. Brayton wrote,
‘The Virginia Deer is rarely met
with in Ohio at present, except as
domesticated in parts.’
“By 1904, White-tailed Deer were
extirpated from Ohio….”
http://www.ohiohistorycentral.org/w/White-tailed_Deer?rec=1117
Huge increase in environmental degradation
http://www.newscientist.com/articleimages/dn14950/1-special-report-the-facts-aboutoverconsumption.html
10
Adam Smith
& the 1st & 2nd Industrial Revolutions
Mass Production and Life-Cycle Assessment
 Environmental profile for mass produced goods
11
John Maynard Keynes &
the 1st & 2nd Industrial Revolutions
Mass Production and Eco-Efficiency
Hecksher-Ohlin-Samuelson 2 sector model of general equilibrium
• Comparative Advantage
•
•
•
•
•
Opportunity Cost
Specialization
Economies of Scale
Barriers to Entry
Inventory / Just-in-Time
 Economic profile for mass produced goods
12
The 3rd Industrial Revolution
13
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy:
Stage setting: role played by energy in the progress of civilization
14
2014
Paleolithic
200,000 BC
ENERGY SOURCE
Vegetation, meat
Wood
12,000 BC
CONVERSION
USE
Muscle
Hunting, gathering,
Fire
Warmth, light, food prep, defense
Mesolithic
2014
12-10,000
7,000 BC BC
15
2014
Mesolithic
12-10,000
7,000 BC BC
ENERGY SOURCE CONVERSION
Vegetation, meat
Muscle
Wood
Fire
Vegetation, meat
Animals
(6 x Muscle)
USE
Hunting, gathering
Warmth, light, food prep, defense
Hunting, gathering, farming,
building, transportation
16
THE FUTURE & Energy
Ox ≈ 4 laborers  better harness ≈ 6 laborers
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
17
Mesolithic Neolithic
2014
10-5,000
7,000 BC
ENERGY SOURCE
Vegetation, meat
Wood
CONVERSION
Muscle
Fire
USE
Hunting, gathering
Warmth, light, food prep, defense
Vegetation, meat
Animals
Wind
Sail
Hunting, gathering, farming,
building, transportation
transportation
grain, meat
Organized labor
“monument building”
(6 x Muscle)
(1000s x Muscle)
18
THE FUTURE & Energy
Early windmill ≈ 14-140 laborers
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
19
Mesolithic Neolithic
5,000 BC
“Classical Era”
5,000 BC
300 AD
2014
“Recorded
History”
“Modern Era”
2014
20
“Classical Era”
5,000 BC
300 AD
“Modern Era”
2014
ENERGY SOURCE
Vegetation, meat
Wood
CONVERSION
Muscle
Fire
USE
Hunting, gathering
Warmth, light, food prep, defense
Vegetation, meat
Animals
Hunting, gathering, farming,
building, transportation
transportation
Wind
grain, meat
grain, meat
(6 x Muscle)
Sail
Organized labor
(1000s x muscle)
Slave labor
(10,000s x muscle)
“monument building”
“Empire building”
21
“Classical Era”
5,000 BC
300 AD
“Pre-Industrial”
300 AD
“Modern Era”
2014
“Industrial Revolution”
1750
2014
22
“Pre-Industrial”
300 AD
“Industrial Revolution”
1750
2014
ENERGY SOURCE
CONVERSION
USE
Vegetation, meat
Muscle
Hunting, gathering
Wood
Fire
Warmth, light, food prep, defense
Animals
(6 x Muscle)
Hunting, gathering, farming, building,
transportation
Sail
transportation
Vegetation, meat
Wind
grain, meat
grain, meat
Organized labor
(1000s x muscle)
Slave labor
(10,000s x muscle)
“city building”
“Empire building”
Water
Watermills
Food prep, fiber prep
Wind
Coal
Windmills
Open Fire
Food prep, fiber prep
Warmth, light, food prep23
“Pre-Industrial”
300 AD
1750
“Industrial Revolution”
1750
“Industrial Revolution”
2014
2014
24
1750
“Industrial Revolution”
SOURCE
CONVERSION
USE
Oil
Renewables
Nuclear
%
37%
Gas
Coal
2014
Electrical
Mechanical
Transportation
Agriculture
Manufacturing
Food preparation
Climate control
Illumination
Warfare
Entertainment
28%
20%
9%
8%
25
THE FUTURE & Energy
1785 Watt/Bolton steam engine ≈ 333 laborers
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
26
THE FUTURE & Energy
1901 35 HP Mercedes ≈ 280 laborers (1 HP ≈ 8 laborers)
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
27
THE FUTURE & Energy
118 HP ≈ 1,144 laborers (MINI COOPER S)
≈
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
28
THE FUTURE & Energy
US individual energy consumption:
18.3 mil barrels  42 gal ≈ 2.43 gal/person/day
360 mil people
136,567 BTU/gal  2.43 ≈ 331,857 BTU/person/day
 0.0002931 ≈ 97.3 kW ≈ 1,300 laborers/person/day
468 billion laborers…
HTTP://WWW.ABE.UFL.EDU/ACADEMICS/COURSE-LISTINGS/AOM-UNDERGRADUATE/AOM2520.SHTML
GLOBAL SUSTAINABLE ENERGY: PAST, PRESENT AND FUTURE. Dr. Wendell A. Porter, P.E. Univ of Florida
29
Paleolithic
“Industrial Revolution”
200,000 BC
2014
“Energy plays a fundamental role in shaping the human condition.
“Indeed, it has been argued that energy is the key "to the advance
of civilization," that the evolution of human societies is
dependent on the conversion of energy for human use.
“Few people have questioned the long-held assumption that
standard of living and quality of civilization are proportional to
the quantity of energy a society uses.
“However imprecise it may be, most people still accept the
steadfast formula: energy=progress=civilization.”
HTTP://WWW.FI.EDU/LEARN/CASE-FILES/ENERGY.HTML 3030 HISTORY OF ENERGY James
C. Williams, Ph.D. April 25, 2006
30
THE FUTURE & Energy
http://www.globalchange.umich.edu/globalchange2/current/lectures/human_pop/human_po
p.html
31
THE FUTURE & Energy
www.ourfiniteworld.com
32
THE FUTURE & Energy
“The world has an
astonishing chance to
take a billion people
out of extreme poverty
by 2030.” June 2013
http://www.economist.com/news/briefing/21578643-world-has-astonishing-chance-takebillion-people-out-extreme-poverty-2030-not
33
THE FUTURE & Energy
“The advanced projects team at Lockheed, known as Skunk
Works, has unveiled a plan to develop a compact,
magnetic fusion device in less than a decade.”
34
THE FUTURE & Energy
Nonrenewables
Nuclear
Fuel
Cells
Renewables
CHEAP OFF-GRID GLOBAL ENERGY
35
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
36
THE FUTURE & the “Internet of Things”
http://elearningroadtrip.typepad.com/elearning_roadtrip/2009/02/mobile-learning-at-last.html
37
THE FUTURE & the “Internet of Things”
38
THE FUTURE & the “Internet of Things”
39
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
40
Adding material
INSIDE  OUT
Removing material
OUTSIDE  IN
http://www.withinlab.com
41
It can print everyday articles…
42
It can print something really big…
43
It can print something really small…
44
It can print something incredibly sophisticated…
[ kidney being printed ]
45
It can print jet engine turbine blades…
GE produces jet engine turbine blades with 3D printing
… saves ≈ $25,000 per engine. The Motley Fool 10/12/12
46
It can print something at the store around the corner…
“Staples Easy 3D”… upload designs to website… pick up
printed objects at local store. Wired.com 11/29/12
47
It can print something on your kitchen table…
48
It can print something impossible…
Shell Tech Centre
(Amsterdam)
(internal cooling channels / structures)
“impossible to make with existing machining techniques.”
3ders.org 9/18/12
49
50
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
51
THE FUTURE & NanoTECHNOLOGY
http://www.nanowerk.com/nanotechnology-applications.php
52
THE FUTURE & NanoTECHNOLOGY
http://www.nanowerk.com/nanotechnology-applications.php
53
THE FUTURE & NanoTECHNOLOGY
http://www.futuretimeline.net/subject/nanotechnology.htm
54
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
 Automation: ROBOTICS
55
THE FUTURE & Automation
56
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
 Automation: ROBOTICS
 New Materials: ???
http://engineering.unt.edu/materials/research
57
THE FUTURE & New Materials
http://www.fastcompany.com/biomimicry/the-booming-business-of-biomimicry
58
THE FUTURE & New Materials
9 Materials That Will Change the Future of
Manufacturing
Researchers are developing cutting-edge foams,
coatings, metals and other substances to make our
homes, vehicles and gadgets more energy efficient
and environmentally friendly
59
THE FUTURE & New Materials
60
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
 Automation: ROBOTICS
 New Materials: ???
What does this all mean?
61
Karl-Henrik Robert, Amory Lovins, Raj Sisodia
& the 3rd Industrial Revolution
Sustainability and THE FUTURE
The
Natural
Step
Natural
Capitalism
Conscious
Capitalism
62
Karl-Henrik Robert & the 3rd Industrial Revolution
The Natural Step (TNS)
• Non profit
• Science based model to integrate environmental, social,
and economic considerations into business
decisionmaking.
• Founded in 1989 by Dr. Karl-Henrik Robèrt in Sweden.
• Offices in 11 countries and a list of partners that
includes some of the world’s leading brands.
http://www.thenaturalstep.org/en
63
Karl-Henrik Robert & the 3rd Industrial Revolution
TNS Rationale
64
Karl-Henrik Robert & the 3rd Industrial Revolution
TNS and Life-Cycle Assessment
#3. Natural functions and diversity
must not be systematically
impoverished by displacement,
overharvesting or other manipulation.
#1.
Substances
from the
earth’s crust
must not
systematically
increase in the
biosphere.
#2. Substances produced
by society must not
systematically increase in
the biosphere.
#4. Resources must be
used fairly and efficiently
to meet basic human
needs globally.
TNS establishes LCA interpretation objectives.
65
Amory Lovins (and Paul Hawken)
& the 3rd Industrial Revolution
Natural Capitalism
• Future economic development needs “natural capital” (“macro” lifesupporting services that currently have no “micro” market value).
• Badly designed business systems + population growth + wasteful
consumption  increasing loss of natural capital.
• Need market-based system where human, manufactured, financial,
and natural capital are fully valued.
• Economic/environmental sustainability depends on redressing global
inequities of income and material well-being.
Natural Capitalism  The Circular Economy
http://en.wikipedia.org/wiki/Natural_Capitalism
66
Amory Lovins (and Paul Hawken)
& the 3rd Industrial Revolution
Natural Capitalism and Eco-Efficiency
Social Justice
Human
Capital
Environmental
Circular
Economy
Natural
Capital
MASS
PRODUCED
GOODS
Capital
Natural Capitalism expands traditional H-O-S definition of capital
(money/goods) to include NATURAL and HUMAN capital
67
Raj Sisodia (and John Mackey)
& the 3rd Industrial Revolution
Conscious Capitalism
Conscious Capitalism expands the objective of Capitalism beyond
merely delivering a return on shareholder capital investment.
68
Raj Sisodia (and John Mackey)
& the 3rd Industrial Revolution
Conscious Capitalism and Eco-Efficiency
Conscious Capitalism expands objective of Capitalism beyond merely
delivering a return on shareholder capital investment.
69
Benefit Corporations and CERTIFIED Benefit Corporations
70
Karl-Henrik Robert, Amory Lovins, Raj Sisodia
& the 3rd Industrial Revolution
Sustainability and THE FUTURE
What is going on here? Why now?
The
Natural
Step
Conscious
Capitalism
Natural
Capitalism
Certified Benefit
Corporations
Benefit
Corporations
71
Sustainability, the 3rd Industrial Revolution
and the Kuznets Curve
“The view that greater economic activity inevitably
hurts the environment is based on static
assumptions about technology, tastes and
environmental investments …” [emphasis added]
“… as incomes rise, the demand for improvements
in environmental quality will increase, as will the
resources available for investment.”
72
Sustainability, the 3rd Industrial Revolution
and the Kuznets Curve
Dasgupta, Susmita, Benoit Laplante, Hua Wang, and David Wheeler. 2002. "Confronting the
Environmental Kuznets Curve." Journal of Economic Perspectives, 16(1): 147-168.
73
Sustainability, the 3rd Industrial Revolution
and the Kuznets Curve
You are HERE!
74
Hans Rosling and the Kuznets Curve
75
Karl-Henrik Robert, Amory Lovins, Raj Sisodia
& the 3rd Industrial Revolution
Sustainability and THE FUTURE
What is going on here?
http://www.impactlab.net/2013/06/05/how-did-the-work-life-balance-get-soawful-in-america/
76
Karl-Henrik Robert, Amory Lovins, Raj Sisodia
& the 3rd Industrial Revolution
Sustainability and THE FUTURE
What is going on here?
http://www.impactlab.net/2013/06/05/how-did-the-work-life-balance-get-soawful-in-america/
77
Karl-Henrik Robert, Amory Lovins, Raj Sisodia
& the 3rd Industrial Revolution
Sustainability and THE FUTURE
What is going on here?
http://www.telegraph.co.uk/finance/personalfinance/comment/iancowie/6274
049/Would-you-put-your-pension-on-a-politicians-promise.html
78
Viktor Frankl & the 3rd Industrial Revolution
Sustainability and THE FUTURE
What WILL you do
WITH YOURSELF
When you aren’t
working
to put food
on the table?
79
Viktor Frankl & the 3rd Industrial Revolution
Sustainability and THE FUTURE
80
Sustainability & the 3rd Industrial Revolution
81
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
 Automation: ROBOTICS
 New Materials: ???
What does this all mean?
82
The 3rd Industrial Revolution
Mass Production and THE FUTURE
 Energy: CHEAP OFF-GRID ENERGY
 Communication: IoT KNOWLEDGE MANAGEMENT
 Manufacturing: 3D PRINTING
 Scaling: NANOTECH
 Automation: ROBOTICS
 New Materials: ???
We really are facing a “meta” revolution
83
Adam Smith
& the 3rd Industrial Revolution
Mass Production to Mass Customization
Capital
Individually made  MASS PRODUCED  Individually made
84
“Manufacturers should start by assessing the vulnerability of
their output to substitution by the home craftsman. Analyzing
the nature of the items that were made in large enterprises
before the Industrial Revolution will suggest what types of
product line are most defensible. Relevant independent
variables might include bulk, product complexity, the ability to
personalize design or features, and the potential for display.
Strategies for the most vulnerable products might need a
complete rethink.”
https://hbr.org/2014/12/is-the-era-of-mass-manufacturing-coming-to-an-end
85
Sustainability & the Maker Movement
The exact definition of “makers” is a bit imprecise, but you can
think of them as the web generation creating physical things
rather than just pixels on screens. To use the terminology of the
MIT Media Lab, they’re treating atoms like bits—using the
powerful tools of the software and information industries to
revolutionize the way we make tangible objects.
There are three underlying forces at work in this transformation of
tinkering.
1. The first is the emergence of digital tools for design and
manufacturing…
2. The second factor is the digital means of collaboration…
3. The third element is the rise of the factory for hire…
86
Adam Smith
& the 3rd Industrial Revolution
Mass Customization and Life-Cycle Assessment
Environmental profiles for custom made-to-order goods???
87
John Maynard Keynes & the 3rd Industrial Revolution
Mass Customization and Eco-Efficiency
Hecksher-Ohlin-Samuelson 2 sector
model of general equilibrium
• Comparative Advantage GONE
•
•
•
•
•
Opportunity Cost GONE
Specialization GONE
Economies of Scale GONE
Barriers to Entry GONE
Inventory / Just-in-Time GONE
Economic profiles for custom made-to-order goods???
88
Sustainability & the 3rd Industrial Revolution
Mass Customization
The
Natural
Step
Natural
Capitalism
IS THE FUTURE
Conscious
Capitalism
Sustainability tools will have to be re-engineered
89
Sustainability & the 3rd Industrial Revolution
Mass Customization
IoT
???
Robotics
???
New
Natural
Capital
???
Materials
???
Energy
???
Nano
tech
???
IS THE FUTURE
3D
Printing
???
Human
Capital
???
CUSTOM
ITEM
Capital
???
Getting to the Circular Economy is going to be exciting!
90
Sustainability & the 3rd Industrial Revolution
Mass Customization
IS THE FUTURE
Human
Capitol
?
The rate of change is accelerating!
91
What the 3rd Industrial Revolution might look like
PUBLISHED
IN 1995…
92
Thank you.
93