The move toward more sustainable economies involves everyone from mom and pop companies to major corporations. And the biggest surprise of all may be: It's working.

— By Jane Braxton Little

The new millennium has opened under a barrage of blows to Planet Earth: Shrinking forests and expanding deserts. Collapsing fisheries and disappearing species. Melting glaciers and stratospheric ozone depletion. It's enough to make the most optimistic among us take cover against a future of environmental doom and gloom.

Instead, people around the globe are demonstrating new ways to interact with the earth and the societies that depend upon it. They are adopting a visionary economic model-one in which we grow and get richer by using less, and become stronger by being leaner and more stable.

In place of traditional reinvestment in monetary capital, these entrepreneurs are reinvesting in natural resources. Instead of accepting nature and the services it provides for free, they evaluate them in dollars, pesos, and rupees.

This is a movement about possibilities that emphasizes innovation over convention, cooperation over competition. It is building around the world in a groundswell of commitment by companies that believe their survival-and the planet's-depends on recognizing nature's looming scarcities. Its leaders understand they can no longer take from ecosystems without giving something back. They are assigning market value to what we have always taken for granted.

The groups creating a sustainable and socially just world are the planet's true superpower, says Paul Hawken, founder of one of the first natural-foods wholesaling businesses and a leader of the sustainability movement.

"This is the most untold story on Earth right now. This movement is growing-it's an uprising, it's the biggest movement in the world-and nothing can ultimately stop it despite the efforts of corporations, the military, and politicians to ignore and suppress it. . . It takes a lot of conversation and dialogue and patience, but ethically and morally it's clean," Hawken says.

Uprising or transformation, sustainable development has attracted a host of corporate America's rich and famous:

• Dow Chemical Company developed a process that saves 99.7 percent of the wasted materials and 62 percent of the energy needed to prepare aluminum cans for filling.
• The California Rice Industry discovered that by flooding up to 200,000 acres of Sacramento Valley rice fields after harvest, farmers could create seasonal wetlands that replenish groundwater, improve fertility and support millions of wildfowl.
• Johnson & Johnson redesigned its wrapping and paper stock to save 2,750 tons of packaging, 1,600 tons of paper, $2.8 million and at least 330 acres of forest annually.
• The Metropolitan Water District of Southern California saved 3 billion gallons of water a year and created more than 100 jobs by distributing 300,000 low-flush toilets throughout the metropolitan area.

Some call this movement natural capitalism, others the eco-economy, the restoration economy, sustainable development, and "spreadsheet earth." By any name, it is revolutionary, the second industrial revolution, says Hunter Lovins, a director with The Global Academy, a Florida-based institution working to build sustainable economies.

"Economics as we know it is going to change in ways we can't imagine. We will have new ways of accounting, new ways of keeping score," Lovins says.

A Green Opportunity

The companies and municipalities already committed consider investing in natural resources and their services a business opportunity-the opportunity of the 21st century. By protecting the ecosystems that supply the raw materials, these big-picture thinkers are convinced businesses can generate profits far greater and for far longer than under conventional capitalism.

Those making the shift to resource reinvestment are not just doing good. They are doing well, reaping profits from entrepreneurial innovations. Sometimes it's as simple as switching to a new-powered light bulb. Rooftop solar cells have transformed more than a million buildings worldwide into mini-power plants that heat and light themselves. The owners sell the excess electricity they generate to the power grid. Along with long-term savings through less-expensive solar power production, their photovoltaic systems are cutting smog, particulate, and carbon emissions by as much as 97 percent, according to the book Natural Capitalism, which Hawken wrote with Amory Lovins and Hunter Lovins.

Development that sustains and restores natural resources is one of the biggest opportunities in the history of commerce, says Theodore Roosevelt IV. He believes the Bill Gates of the next generation will make his or her fortune in these new technologies.

"It actually looks like doing the right thing by communities and the environment is quite likely to also be the profitable thing," says Roosevelt, managing director of Lehman Brothers, a New York-based international investment banking firm.

It has been for Drew and Myra Goodman of Earthbound Farm. They started in 1984 with 2.5 acres, where they grew organic raspberries, specialty greens, and culinary herbs. Today Earthbound Farm is the largest organic produce brand in North America, with $300 million in gross sales in 2003.

The Goodmans' break- through product was an assortment of salad greens bagged for sale in retail stores. When they began marketing their spring mix in 1986, their outlets asked them not to call it organic because the label would detract from the sales. Consumers proved the retailers wrong.

People then and now are looking for healthy choices, says Myra Goodman, Earthbound's co-founder and executive vice-president. In the last decade organic food sales have skyrocketed with 20 percent annual growth, making organics the fastest-growing food trend in America.

It's a consumer revolution, Goodman says. It is changing how America farms and eats. Organic foods cost a little more, but consumers are willing to pay the difference to fund their long-term benefits, she says. Earthbound alone avoids the use of 400,706 pounds of pesticides and 3.1 million pounds of synthetic fertilizers every year. That's a significant contribution to cleaner water and more productive soil as well as healthier human beings.

"People are beginning to understand that quality is a better choice than quantity," says Goodman. "We're beginning to change how people look at what is a good value."

The opportunities extend beyond what we eat to the details of our lives, at home and at work. Interface Corporation, a leading maker of materials for commercial interiors, jumped into the sustainability movement in 1994 setting daunting goals for itself: To become the first sustainable corporation in the world; and then, to become the first restoration company. Four years later, its revenues had doubled and its employment nearly doubled. Its profits had tripled.

New Business Models

Exciting as it is, the transition from traditional capitalism to a conservation basis poses enormous problems. How much is pollution-free air worth? Empty landfills? Unspoiled oceans? And who decides?

Gretchen C. Daily, a Stanford University ecologist, is part of an effort to evaluate ecosystem capital as a first step in shifting industries from a take-make-waste mentality to using natural resources more productively. She is working with the business sector. Changes in governments will follow, she says.

Hawken, Amory Lovins, and Hunter Lovins have developed a business model to guide companies through the transition. They describe dozens of companies already harnessing their concepts to generate competitive advantage. The authors call it natural capitalism because it's what capitalism might become if its largest category of capital-natural resources and their ecosystem services-were properly valued.

The journey to natural capitalism involves simple but major shifts in business practices. Interface, a commercial interiors company, moved from a zero-waste budget to another stage in the journey to natural capitalism: It shifted from product to service orientation. Among Interface's products are carpets for office buildings. These are traditionally replaced every 10 years, requiring companies to shut down and remove their furniture. Damaged carpet generally goes to a landfill, where it last up to 20,000 years.

Under Interface's new business model, it no longer sells carpets. Instead, it leases a floor-covering service for a monthly fee, which gives Interface responsibility for carpet replacement. Since less than 20 percent of the carpeted area typically shows 80 percent of the wear, Interface switched to carpet tiles. Only the worn ones are replaced, reducing waste and office disruption. As a bonus, the customer leasing carpets turns a capital expenditure into a tax-deductible expense. Interface has achieved a stunning 35-fold reduction in the flow of materials needed to sustain a superior floor-covering service.

Although it introduces a host of mind-bending economic theories, the movement for sustainable economies includes more than a little whimsy. It has inspired ingenuity resulting in weird but useful products. Velcro, for example, grew out of a summer hike. When Swiss amateur-mountaineer George de Mestral returned from an amble in 1948, he imitated the burrs that covered his pants to design a two-sided fastener, one with stiff hooks like the burrs, the other with soft loops like his pants fabric. Mestral built his Velcro Industries into a multi-million-dollar business.

A German industrialist noticed the pure luminescence of lotus blossoms in the midst of their muddy marshes. Studying them, he found bumps on the surfaces of the lotus petals. The bumps cause the water passing over the flower to pick up particles of dirt in a constant natural cleaning action.

The entrepreneur designed Lotusan Paint for building exteriors, billing it as self-cleaning surface. His invention saves the time and labor of washing walls and reduces the need for repainting.

Many Benefits

Natural systems are models of efficiency that use everything they produce. Plants take up carbon dioxide animals expire. Forest wastes become nutrients for soil and new plants. Mimicking the closed-loop production of natural systems can generate multiple products with wide-ranging benefits, says Hawken.

Take New York City's $1.4 billion investment in its municipal water system. For decades the city's 8 million residents enjoyed one of the nation's purest water supplies, a free-flowing system that cascades from the forests and meadows of the Catskill Mountains upstate down into the apartments and highrises of Bronx, Manhattan, and Queens. In 1990 this natural supply was threatened by a federal decree mandating that the water be filtered for microbial contaminants.

It took years of controversy, but in 1998 city, state, and federal officials adopted a landmark agreement. Instead of building a $6 billion filtration plant that would have cost $1 million a day to operate, New York invested in its 1,600-square-mile watershed. The arrangement recognizes the value of the water and the watershed, and acknowledges the workers who protect the land and water table.

New York City is spending $666 million to acquire land and conservation easements that will preserve open space throughout large parts of the watershed (see American Forests, Winter 1998). Assisted by city funds, landowners are adopting creative agricultural and forestry programs designed to protect water quality. Dozens of communities throughout the watershed are getting new or upgraded septic and sewage treatment systems, eliminating a major threat to the unspoiled water table.

New York's investment in its watershed has social benefits, too. The filtration plant jobs that would have been concentrated in the city are instead spread upstate. Dispersing the jobs allows local workers to stay home, keeping their rural economies intact and contributing to the local quality of life. The decentralized system also lowers the risk of natural disaster or attack, says Chris Page of Rocky Mountain Institute, a Colorado nonprofit "think and do" tank that promotes sustainable economic development.

A mechanical filtration system would have provided clean water and met federal requirements, but the natural system also offers flood control, recreation, open space, and a host of additional paybacks, tangible and intangible. New York is proof of the multiple benefits from a single action. Its investment in its watershed demonstrates that water is not mere gallons of a life-essential liquid, to be taken away as quickly as possible in large concrete pipes.

"Water is habitat. Water is life," says Lovins.

Companies restructuring their businesses around ecosystems and their services have attracted financial institutions that understand their potential for long-term profits. Dozens of socially responsible investment firms now analyze a company's effect on the environmental as well as its bottom line. Calvert Group, a mutual funds firm based in Bethesda, Maryland, screens company performance in seven areas that include environmental impact, product safety, human rights, and corporate governance.

This research adds to a financial analysis with a full picture of what a company does and stands for, says Julie Gorte, Calvert's director of social research. Social and environmental performance can have profound impacts on financial performance, she says. A successful investment today not only earns competitive returns but helps build a sustainable future.

This investment philosophy has helped nudge several companies into new commitments to the environment. Home Depot adopted a policy of carrying no products from old-growth forests, in part because of Calvert's assessment process, Gorte says.

After the investment group analyzed Staples, it requested an increase in products using a high percentage of postconsumer waste. The office supply company went one further, committing to selling only paper from forests certified under the American Forest and Paper Asso-ciation's Sustainable Forest Initiative.

Calvert's investment process is its way of developing business leaders that are committed to a sustainable future, says Gorte. "We all have to treat the planet and people with respect. We have to make it possible for children to live at a standard not diminished by what we did," she says.

But it would be a mistake to look to Wall Street to drive the sustainability movement, says Roosevelt. "Green portfolios? They're nice. But they haven't reached enough marketplace mass for investment bankers to pay more than peripheral attention to them," he says.

It's up to ordinary citizens to prove what most already believe: we can have jobs and clean rivers, thriving rural communities and healthy ecosystems. Consumers have successfully gotten the food products industry's attention by demanding more organic foods. They have helped convince Home Depot and Staples to support products from sustainable forests.

"How we come out is going to be determined by what we do in our daily lives in small ways, how each of us contributes to the uprising," says Hawken.

Restructuring economies around natural resources is a movement of hope, where people and their pocketbooks play a powerful role. It promises a future where companies invest in sustaining and expanding natural capital, where production is sized to the limits of natural resources. The challenge, says Roosevelt, is to think like an ecosystem: "to understand that economics and ecology are embedded in one another, that our human communities are enmeshed with our natural communities, and that it is time to honor all of them." AF

Contributing editor Jane Braxton Little covers environmental topics from her home in Greenville, California. [TOP]