Steps to Natural Capitalism

Sustainable Development Sust. Dev. 9, 47–57 (2001) STEPS TO NATURAL CAPITALISM

Frank Birkin*

Sheffield University Management School, UK

The impact of concerns about to be taken if the putative revolution is environmental degradation has to be realized. Copyright © 2001 John prompted many initiatives to improve Wiley & Sons, Ltd and ERP the environmental efficiency of Environment. businesses, such as environmental management systems and industrial ecology as well as recycling, waste Received 7 April 2000 reduction and energy reduction Revised 26 June 2000 programmes. Hawken et al. (1999) argue Accepted 4 September 2000 that these kinds of change are part of processes so profound that humankind is INTRODUCTION actually participating in another industrial revolution, a revolution to awken et al. (1999) argue that the Natural Capitalism. These three authors kinds of change they foresee are part outline basic changes to the capitalist Hof processes so profound that hu- system that necessitate different mankind is actually participating in another mind-sets and sets of values that industrial revolution, a revolution to Natural ultimately lead to profound differences Capitalism. These three authors outline basic in the ways in which businesses are changes to the capitalist system: ‘Natural capitalism and the possibility of a new industrial managed. system are based on a very different mind-set This paper considers the possibility and set of values than conventional capital- that we are on the verge of an industrial ism’, (Hawken et al., 1999, p 9). revolution that will implement a new Basic changes such as those proposed by form of capitalism that will facilitate an Hawken et al. (1999) could have wide-ranging easier transition to sustainable industrial impacts on business practice, but the environ- development. This paper proceeds by mental movement has already brought about first identifying key approaches to the many and varied changes in business practice. management of the environment and Is there then a a col, a high-level pass that we then identifying six steps that will have are approaching after which there will be a new land, a hidden valley, laid out before us? * Correspondence to: Frank Birkin, Sheffield University Man- Or, in other words, to what extent can the agement School, 9 Mappin Street, Sheffield, S1 4DT, UK. changes brought about by such as environ- E-mail: [email protected] mental management systems, whole-system engineering, life cycle assessments, demand Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. management and industrial ecology as well as F. BIRKIN a holistic view of recycling, waste reduction These criteria are argued to satisfy the re- and energy reduction programmes be accom- quirements of sustainable development as modated effectively within the existing busi- defined by the World Commission on Envi- ness framework? ronment and Development, the Brundtland This paper considers these questions and Commission. This definition defines sustain- the possibility that we are on the verge of an able development as: ‘development that meets industrial revolution that will implement a the needs of the present without compromis- new form of capitalism. These considerations ing the ability of future generations to meet proceed in this paper by first identifying key their own needs’ (World Commission on En- approaches to the management of the envi- vironment and Development, 1987). ronment in the section ‘Representing the envi- In practice, much of environmental eco- ronment’. Then the section entitled ‘Taking nomics is concerned with externalities, i.e. the the next steps’ identifies six critical steps that social and environmental costs of economic will have to be taken if the putative revolu- activity that have not been represented in tion is to be realized. previous economic calculations (Pearce and Warford, 1993). Economic instruments are proposed as the means by which externalities REPRESENTING THE may be incorporated within economic calcula- ENVIRONMENT tions such as emission charges, user charges, product charges and marketable permits. Business in practice is already committed to capturing something of the impacts of business activity upon the environment. Few, if Environmental and social accounting any, of these representations of business and environment relationships have anything to Within an environmental economics frame- do with traditional capitalism. Capitalism is work, environmental and social accounting stretching to accommodate these new uses diverse ways of representing the ‘exter- representations. nal’ impacts of industrial activity. These ways In order to identify from whence the ‘next include: environmental cost accounting, envi- steps’ depart, this section reviews key ways in ronmental liabilities, environmental invest- which the environment is already represented ment appraisal, life cycle assessment (LCA) within business circles. In order to justify use and life cycle costing (Owen, 1992; Gray et al., of the word ‘revolution’, Natural Capitalism 1993; Environmental Protection Agency, 1995; will have to do much more than has been Schaltegger et al., 1996; Bennet and James, achieved already. 1999). In summary: ‘the ‘greening of accountancy’ involves reappraisal of how to identify and measure the relevant costs of processes Environmental economics and products (such as ‘Total Cost Assess- Three criteria have been identified that distin- ment’) and a redesign of incentive mecha- guish environmental economics from tradi- nisms. Through these changes managerial tional economics. The three criteria are the decisions and corporate behaviour may be following: refocused towards the goal of achieving sustainable development, for example by pursu- 1. economic systems should be designed less ing a viable industrial ecology’ (Macve, 1995, Homo eco for a ‘rational economic person’ ( - p 17). nomicus) and more for people’s collective needs; 2. a sustainable economy should be able to replicate itself indefinitely and Stakeholder management 3. growth in economic activity needs to be decoupled from the impacts of that activ- The importance of satisfying the requirements ity (Turner, 1995). of a range of stakeholders has been widely

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9, 47–57 (2001) 48 STEPS TO NATURAL CAPITALISM recognized and appropriate changes in man- In German speaking countries, this ap- agement have been implemented by many proach is known as an Ecobalance (White companies (Royal Society of Arts, 1995; Sus- and Wagner, 1996). It has been implemented tainAbility–UNEP, 1996; Wheeler et al., to good effect by Kunert AG, who are also 1998). Strong and weak stakeholder theory is developing an integrated environmental cost differentiated by how much weighting is management system (Kunert AG, 1998). The placed on non-economic stakeholders, weak practice of monitoring energy and material stakeholder theory maintaining that only inputs is the basis of life cycle management economic stakeholders are really significant. or life cycle inventory analysis (National Of- The approach of stakeholder management fice of Pollution Prevention, 1999). The ap- has application beyond that of company plication of mass balancing techniques on a management. It could, for example, be ap- regional scale is the basis of industrial ecol- plied on a regional scale or to significant ogy such as has been developed in the Dan- social groups (Grimble and Wellard, 1996). ish township of Kalunburg (Ehrenfeld and Gertler, 1997).

Environmental management systems (EMSs) Several environmental management systems standards have been developed by national TAKING THE NEXT STEPS and international agencies. The principal systems are the International Standards Organi- In response to social and ecological degrada- sation 14000 series and the European tion, many steps have already been taken to Eco-Management and Audit Scheme, EMAS broaden the content of existing economic (Sheldon, 1997). and accounting concepts and accounts. This These systems typically use output con- paper argues that these first steps are not trols to initiate measures of industrial envi- big enough to satisfy the requirements of ronmental impacts within the formal records sustainable industrial activity. The reason for and management procedures of companies this is that the first steps represent the envi- and other institutions. Such systems have ronment in significantly negative ways such been adopted by parts of the hotel sector as additional costs, penalties, licenses, per- (Twist and Macmillan, 1996). mits and other obstacles that stand in the way of making a profit. A second series of step needs to be taken. Those second steps Energy and mass balance accounts needs to incorporate sustainable develop- Environmental management systems typi- ment within core industrial values in such a cally use output controls and have little to way that economic wealth is synonymous say about the system by which environmen- with the wealth of social, environmental and tal information is gathered. In the German- ecological systems. These second steps might speaking world and Scandinavia, a sys- well precede an industrial revolution that tematic approach to collecting, monitoring may indeed establish a form of Natural Cap- and reporting the environmental impacts of italism. process companies has been developed. In Some of the terminology used in the first Danish Steel A/S, physical units (weights, steps reflects the problems encountered with volumes, energies etc) were substituted for these steps. The ‘environment’ is, by defini- costs in the company’s computerized cost action, a stymied response to the needs of sus- counting system. The result is an analysis of tainable development because of the mean- the physical flows through the company that ing of the word. According to the Oxford is represented in a physical balance sheet, English Dictionary (OED), ‘environment’ the Green Account (Jorgensen, 1993; Danish means ‘surrounding, surrounding objects, re- Steel, 1998). gion, or condition, esp. circumstances of life

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9, 47–57 (2001) 49 F. BIRKIN of person or society’. Hence, environmental tal life systems and will at best be ineffi- management and accounting, for example, cient. Such inefficiency arises in those ways define themselves as marginal activities. This in which it always arises when two separate does not help managers to work with sus- approaches are taken to do the same job: tainable development as a core issue. To duplicated effort; satisfy the requirements of sustainable devel- conflicts; opment an evolutionary change is required: stress and other dysfunctional attributes; this means that there are opportunities for confusion and industry on an evolutionary scale. The op- inconsistencies. portunities for industry created by the needs of sustainable development cannot be taken The situation is, however, much more seri- without a change of heart. ous than one of inefficiency. We are living Six aspects of the next steps are now con- beyond our ‘ecological means’. We are being sidered. These aspects are important to paid in the ‘wages of overshoot’ (Catton, achieving that kind of change of heart that 1982), such as global warming, climate change will make sustainable development a core and species loss, which cause more costs than business goal. In this way, the concept of benefits and threaten our existence. sustainable development may itself become There is simple common sense in acting in unsustainable, being replaced by normal accordance with the ways of the living world. business practice within a framework of Nat- We do, after all, apply this principle to our ural Capitalism. own personal health care; we need to do the same for planetary health.

Aspect of the next step 1: new knowledge When the foundations of most contemporary Aspect of the next step 2: new values and technology and economics were laid down, meaning ‘scientific’ knowledge about ecosystems and It is one thing to know what is the best 1 carrying capacity was minimal and hence it thing to do and another to do it. To put the was not a significant factor. Times have new knowledge into practice, an alternative changed: ‘the new information on the earth’s framework for making and implementing carrying capacity brings with it a responsi- decisions is needed. The framework has to bility to educate and to act that, until re- be multidisciplinary since the living world cently, did not exist’ (Brown, 1994, p 196). knows no such distinctions. In one understanding, such information is However, certain descriptions of the world not new. There is, and always has been, a we now possess are exclusive; that is, they huge amount of information available about do not allow for other descriptions, other ecosystems and carrying capacity. Every liv- values and other meanings. This is nothing ing thing embodies such information. We new in itself. In the second decade of this just chose to ignore it. Wilson, the Harvard century, the philosopher Whitehead wrote socio-biologist, argues that existing economic ‘every age produces people with clear logical models are hermetic or sealed off from social intellects, and with the most praiseworthy and natural realities (Wilson, 1998). Sustain- grasp of the importance of some sphere of able development is about the recovery of human experience, who have elaborated, or this knowledge and its application in indus- inherited, a scheme of thought which exactly try. fits those experiences which claim their in- Failure to co-ordinate in this way will at terest’ (Whitehead, 1997, p 223). Such in- worst lead to serious damage to fundamen- sights are usually vigorously defended and are exclusive. 1 The maximum population of a given species that a particular Whilst environmentalists in industry have habitat can support indefinitely (Catton, 1982, p 272). to recognize and work within a multi-

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9, 47–57 (2001) 50 STEPS TO NATURAL CAPITALISM disciplinary framework, industry itself does possess personal values that are favourable not. Economic core values dominate. An to sustainable development and also that economic bottom-line for business activity is these accountants do not put their beliefs self-evident and essential but, in order to be- into practice (Geno, 1998). come sustainable, economics needs to move aside and make space for other core values. In order to accommodate these other core Aspect of the next step 3: new skills values, accounting for industrial activity will To gain business benefits from sustainable have to change: ‘to summarise, the criteria development, managers require new skills. [with regard to sustainable development] The main difference in approach has to do will affect the principles and practices of ac- with the complexity and interdependence of counting in a number of ways. It is primar- the subject matter itself. It is impossible to ily the need to determine the category of deal with problems in isolation. Conversely, resources used by the entity (renewable, the best solutions are systems solutions that non-renewable, critical to ecosystem func- change not one or two factors but that affect tioning or subject to irreversible effects) and a whole system or several systems at once. a longer-term view which produces these For example, an island waste disposal prob- necessary changes in the practice of account- lem is best addressed not by better disposal ing. Daniel Rubenstein has labelled the quest facilities (i.e. treating the problem in isola- for sustainable accounting as representative tion) but by a range of system changes in- of the ‘Age of Other Values’ in the sense volving such as there is an expanded role for monitoring the stocks and flows of natural resources and importing less to be wasted (particularly with regard to packaging), that not all values pursued are in terms of historical costs or even monetary measures reusing and recycling (such as kitchen wastes, building materials), at all’ (Geno, 1995, p 188). efficiency in use gains (involving final use Recognition that values and meanings are considerations as well as straight forward changing may be found along the corridors reductions) and of the European Commission: ‘the work of redesigning for local solutions. ensuring acceptance of environmental policies and sustainable development involves Each of these actions would help to solve the more than getting instruments to work. It is waste disposal problem but each of them also also changing the way we live’ (European saves on transport costs, buying costs and Commission, 1996, p 5). Black captures the material handling costs. essence of this change: ‘the logic which un- With a moment’s reflection, it is clear that dergirds the wholesale adaptation of nature integrated solutions such as these need more to serve utilitarian ends is spent . . . We than a technical remit to handle them. Diplo- must cease our peripatetic search for an ana- matic and political skills are also required. To lytical solution to what are political and effect change over a broad range of activities, philosophical problems . . . Instead of glee- a manager needs to consult, persuade, negoti- fully manipulating nature, we must reinvent ate and motivate. our own beliefs, behaviour and cultures in Consider the situation of life cycle assess- keeping with biologically healthy rivers. If ments (LCAs) (Pederson, 1996). This is an westerners pay sufficient heed, wild salmon account developed first all to assess the im- may just be capable of showing us the way’ pact that a product or service has during its (Black, 1995, pp 63–64). whole life cycle. This is a conceptually simple It is one thing to recognize other values but very difficult to do in practise: and meanings but it is another to express ‘the case study research indicated that it is them in practice. Hence a survey of rural virtually impossible to identify accurately accountants in Australia revealed that they the specific environmental impact of a

product’ (Dermody and Hanmer-Lloyd, that shows the fallacy of CBA (and LCA) 1997, p 379), and objectivity. Adams concludes ‘whenever ‘such an approach [i.e. an LCA approach] people can be found arguing from different will need to be ethical and take an ever premises progress toward agreement can wider view of the definition of the envi- only be made if they can be persuaded to ronment and sustainability’ (Welford, examine the foundation of their disagree- 1995, p 113). ment. The skills in shortest supply for this task are not economic, but scientific and To use LCA in the tourism industry is to diplomatic’ (Adams, 1995). evaluate, say, the impact that a package holiday has on home country transport in- frastructure; the host country’s transport in- Aspect of the next step 4: new metrics frastructure, resources and community; road, Monetary measures of institutional perfor- rail, air and other transports in or over other mance do not capture enough relevant infor- countries; the making and service of the mation to render institutions sustainable. transport capital goods such as planes, cars Economics and traditional accounting mea- and boats; the suppliers of goods and ser- sures represent only a subsidiary, possibly vices to meet the tourist’s needs; the tour minor, performance system when the needs operator’s impacts; marketing impacts and a of sustainable development are encountered. whole host of other items. Obviously, deci- This limitation of existing economic sys- sions have to be made that limit the scope of tems is recognized by some economists. Daly an LCA to make the account usable, but (Daly and Cobb, 1990) argues that traditional when such decisions are made subjectivity economics possesses a ‘misplaced concrete- creeps in. Hence, LCA users need to be fully ness’ that relies excessively on abstract nu- aware of any decisions made regarding (i) meric analysis. In response to this kind of boundaries of the LCA study and (ii) any limit, elegant and detailed proposals have weights assigned to various social and eco- been made for enlarging the information logical impacts in order to scale their prior- content of both economics and accounting. ity. The boundaries and weights are chosen Pearce (1989) proposed that the cost base of subjectively but can significantly alter the economics could be simply extended by in- outcome of an LCA study. troducing additional cost categories for such In what way are we informed if the result as social and environmental costs. The of an LCA of the nuclear power industry United States’ Environmental Protection shows that nuclear fuel is an environmen- Agency (1995) has given Pearce’s proposals a tally friendly fuel when that LCA is paid for detailed and practical expression in the form by the nuclear fuel industry? Do we expect of 67 new environmental and social costs in that a Friends of the Earth LCA study of six new categories. Additional categories for nuclear power will present a different result? social and environmental costs are popular Adams performed a study of UK govern- because they make no fundamental changes ment applications of cost–benefit analysis (Society of Management Accountants of (CBA), an account with similar boundary Canada, 1992; Schaltegger et al., 1996; Bennet problems to LCA. The CBA account is used and James, 1999). Gray takes a different ap- to evaluate significant decisions regarding proach from that of merely identifying and such as motorway locations, siting of new accumulating additional costs. He proposes a towns and airports. Adams applied the CBA ‘sustainable cost’ accounting system in which account to the decision regarding the siting calculations are made to ascertain the addi- of London’s third airport. By applying gov- tional cost that must be borne ‘at the end of ernment guidelines to the letter, Adams’ the accounting period to return the planet CBA analysis showed that the best location and biosphere to the point it was at the be- for London’s third airport was in the middle ginning of the accounting period’ (Gray, of Hyde Park. This is a ludicrous answer 1992, p 419).

If it were the case that accumulated costs ness accountants to simply add additional establish value then the simple recognition social and environmental costs to their profit of social, environmental and ‘sustainable de- statements to reflect their subjective assess- velopment’ costs would indeed bring about ments of impacts. As stated above, value, fundamentally change to the things we for contemporary economics and accounting, value and, consequently, the decisions we is based on free-market interactions; i.e. make, but business values are not derived in value equals price in a free market. But even this way. In the contemporary world, values those properties that are the essence of a are established by market transactions based business or which clearly are a business’s on supply and demand. This means that greatest asset, may not be given a value by costs are not relevant to the derivation of contemporary accounting because of the ab- economic values (this is not to say that costs sence of appropriate market transactions. are not important to economic decision- Such properties include brand names, mar- making). ket strengths, intellectual capital, innovative Hence, for example, the accumulated so- capacity, learning ability, esprit de corps, tech- cial, environmental and sustainable develop- nical skills and organizational legitimacy. ment costs of clear-cutting a stretch of Furthermore, properties such as these will forests have no significance for creating eco- become increasingly important as e-com- nomic value. The economic value of the merce and virtual businesses develop. Mi- forests depends on market valuations of the crosoft, for example, is a business worth far wood, labour and other resources needed more than an accountant’s valuation of as- for the ‘production’ and sale process. For sets. However, values are, of course, critical in social and ecological accounting: ‘one of the accumulated social, environmental and the key elements of Ecologically Sustainable sustainable development costs to attain real Development that has been identified and is value, a framework other than traditional evident is to ensure that environmental as- economics is required. sets are valued appropriately’ (Bell and Leh- Other frameworks are indeed on offer. In man, 1998, p 178). spite of the comments made above, there is much that is new in environmental economics (Daly, 1991; Pearce and Warford, 1993), environmental accounting (Gray et al., 1993), social reporting (Zadek et al., 1997) and Aspect of the next step 5: new goals stakeholder corporations (Wheeler et al., Issues of value cannot be separated from 1998). The UK’s Department of the Environ- those of wealth. The wealth sought in the ment, Transport and the Regions (DETR) has first step is clear enough: it is that wealth the stated intention of working with diverse measured by economics. Crudely speaking, and multidisciplinary indicators across all economic wealth means money in the bank industrial sectors (Department of the Envi- or at least assets with price tags. In the ronment, Transport and the Regions, 1999). OED, wealth is defined as ‘riches, large pos- The DETR’s example effectively establishes a sessions, opulence; being rich; abundance, a triple bottom line for measuring industrial possession of a great quantity or display’. performance. Mathews (1997) suggests that a Hence wealth could also mean a rich, abun- mega-theory of accounting is emerging and dant, vibrant, fulfilling, opulent human and that this also utilizes a triple bottom line non-human community within which we measurement framework. live. ‘Possession’ in this alternative definition What is unrealistic about the first step ap- of wealth takes the form of common experi- proach that involves additional cost cate- ences, relationships, memories, shared iden- gories or other appraisal bases is that it tity and common fate. assumes that values will change somehow Consideration of this second interpreta- on their own. It is unrealistic to expect busi- tion of wealth reveals that sustainable

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9, 47–57 (2001) 53 F. BIRKIN development will be greatly assisted, and biosphere itself. Lehman understands this perhaps only feasibly, when real ‘real’ val- essential requirement and draws on Taylor’s ues and not economically ‘real’ values guide communitarian theory for a solution: ‘An ac- our decisions. We can only go a small way countable world constructed according the to moving industrial activity and society tenets of modern communitarian theory in- onto sustainable development pathways if vites our thinking to span across ‘the earth, the promised wealth, the goal, is biased and sea and sky and recognise that these forces incomplete. If what we are really working are all a part of a formable world which for is money in the bank, then environmen- is open to greater cosmic forces’ (Taylor, tal and social aspects will always remain ob- 1995, p 122) ‘that allow them to flourish and stacles to our ‘real’ goals. over which humanity has no ultimate Money in the bank cannot be overlooked. control’ (Lehman, 1999, No. 227, p 238). This too would be unsustainable if absent. A These are wonderful thoughts, but what do truly integrative goal is required: a goal in they mean on a Monday morning in the which social and ecological values are not office? forced through the filter of established eco- McDonough and Braungart are creating nomic and accounting methods, and thus the ‘Next Step’ or, in their terms, the next distorted beyond recognition in the process. industrial revolution, by promoting the use A sustainable development goal is required of nature’s design criteria. They write ‘. . . within which all forms of desirable wealth eco-efficiency is a valuable and laudable ac- are measured and valued on their own count, and a prelude to what should come terms. next. But it, too, fails to move us beyond the Integrated goals are now available. In the first revolution. It is time for designs that previous section, Mathews (1997) and the are creative, abundant, prosperous, and in- UK government’s DETR (Department of the telligent from the start. The model for the Environment, Transport and the Regions, Next Industrial Revolution may well have 1999) explain how the three arenas of eco- been right in front of us the whole time: a nomic, social and environmental perfor- tree’ (McDonough and Braungart, 1998). This mance appraisal may be integrated in a is perceptive, inspirational and, indeed, rev- multidisciplinary measurement system. Simi- olutionary writing, but do the goals that a larly, McDonough articulates sustainable de- tree possesses translate without elaboration velopment by means of the three categories into the kind of goal that can motivate and of equity, economy and ecology (Mc- organize several billion people around the Donough and Braungart, 1998). Callenbach world? et al. (1993) present an intriguingly organic illustration of the information systems that define an industrial entity. The illustration is Aspect of the next step 6: new management suggestive of a new concept of industrial activity. However, in all these examples, it is The previous five aspects of the next step not explained how the present economic (knowledge, values and meaning, skills, met- core of industrial activity will be changed so rics and goals) each say something about that economic, ecological and social goals New Management. But what is it that New become equally desirable. In the absence of Management does? that explanation, it is assumed that in spite New Management could implement sus- of the breadth of the schemes the real reality tainable development according to such as remains economic. Sustainable development Lamberton’s five rules: is again that obstacle to be overcome in or- 1. critical natural capital to be maintained der to achieve our real desires. intact; On a more visionary level, perhaps sus- 2. use of non-renewable resources to be lim- tainable development goals need to be as ited to the rate of creation of renewable adaptable, as pervasive and as ancient as the substitutes;

3. use of renewable resources to be governed vision of Natural Capitalism but they are by natural regeneration rates; wide-ranging. 4. waste discharges to be limited by assimila- The ‘next steps’ identified in this paper tion rates and complement the possibility of a transition to 5. scale of human activity to be within carry- Natural Capitalism. If a critical mass of com- ing capacity (Lamberton, 1998). panies implement the practical solutions de- scribed in the book Natural Capitalism However, in the same way that recognition (Hawken et al., 1999), and if some of this of the interconnectedness and interdepen- paper’s ‘next steps’ had been taken, then per- dence of ‘individuals’ within an ecosystem haps a new form of capitalism will have been has changed our understanding of the world implemented, but capitalists will still want within which we live, so too is the same their returns and investors will look to move- recognition changing management practice. ments in the financial markets to make their Senge argues that we need to develop ‘learn- fortunes. ing organisations’ in order to manage in this Furthermore, any new form of capitalism new environment (Senge, 1993). The old ways will come with a new set of problems. So too of management may be familiar and seem- what extent do concepts or terminology mat- ingly intractable: ‘yet we are together running ter, apart from providing a catchy title to an economic system that violates the basic boost book sales? There are many real prob- laws of natural systems, and just hoping that lems in the world and is it highly unlikely we can keep it going long enough that the that a new concept will solve them all. problems will have to solved by someone Perhaps Natural Capital is telling us that else’ (Senge, 1998, p 126). we do not have to solve all our current prob- Handy is a professor of management devel- lems. Natural Capital and the ‘next steps’ are opment at the London Business School. He not intended to solve our current problems at has a vision of what the new management all: they work by the natural processes of might look like: ‘these days almost nothing is evolution. They cannot solve current prob- certain. In the old days, when organisations lems since these problems belong to those were younger, there was a feeling that we minds that created them: Natural Capital and would in due course arrive at some sort of the ‘next steps’ move on to a new kind of scientific law about organisations. Companies understanding, an evolutionary step. Natural would succeed because they would be able to Capital just might be related to existing forms predict the future and be able in some sense of capitalism in the same way that all the to even manage the future. So back then we trappings of our modern age relate to designed and constructed our organisations feudalism. on the basis of planning, predictability and control. We used words like plan, operate, control, measure. But in my view, all those words are now wrong. They are not terribly REFERENCES useful in a world which is flowing rather than standing still. All we can really do now is go Adams J. 1995. Cost–Benefit Analysis; Part of the Problem, Not the Solution. Green College Centre for Environ- with the flow, and try to steer things a little’ mental Policy and Understanding: Oxford. (Handy, 1998, p 22). Bell F, Lehman G. 1998. Recent trends in environmental accounting: how green are your accounts? Accounting Forum 23(2): 175–192. Bennet M, James P. 1999. The Green Bottom Line: Environ- CONCLUSION mental Accounting for Management. Greenleaf: Sheffield. Futurology, like fortune-telling, gains in- Black M. 1995. The unnatural policies of natural resource agencies: fishery policy on the Scaramento creased probability of being right by keeping River. In Greening Environmental Policy: the Politics of a forecasts either vague or wide ranging. Sustainable Future, Fischer F, Black M (eds). Chapman: Hawken et al. (1999) are not vague about their London; 82–103.

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