June 01, 2001
Instilling the fear of God into corporations
In the promotional preface to Natural Capitalism: Creating the Next Industrial Revolution, Peter Senge writes, "If Adam Smith's The Wealth of Nations was the bible for the first industrial revolution, then Natural Capitalism may well prove to be it for the next." While his acclamation might be historically premature, Senge's point is worth noting. Natural Capitalism aims at nothing less than a second industrial revolution.
It does so with a decidedly innovative approach. Rather than pleading with corporations to bestow acts of charity upon the environment, authors Paul Hawken, Amory Lovins, and L. Hunter Lovins announce that CEOs who fail to prioritize earth's natural resources are causing their own financial downfall.
Such a strategy—and Natural Capitalism is, above all, a strategic book—plays well on a CEO's late-night insecurities. It doesn't bemoan the competitive nature of modern Western capitalism. It doesn't try to convert corporate moguls into Greenpeace activists. Natural Capitalism simply tells companies that with the dawn of the 21st century, the rules for economic success are changing. The most successful companies will soon be those that "recognize the critical interdependency between the production and use of human-made capital and the maintenance and supply of natural capital" (4). In other words, the best corporations in the 21st century will be environmentally and socially responsible corporations. Its CFOs will know that profits depend not only on marketing ploys but also on investments in, and conservative use of, earth's natural resources.
So don't be left behind. The authors strike fear in the hearts of corporate leaders by proclaiming that certain companies have already gotten a jumpstart on the competition. These corporations are beginning to figure into their bottom lines the "real costs" of water, air, ecosystems, and nonrenewable resources. They are starting to act "as if" a rigorous standard for ecologically attentive accounting is already in place (9).
An example that even the non-corporate among us can grasp is the race to build efficient and affordable alternative-fueled vehicles. In 1998 Volkswagon's Ferdinand Piëch announced that his company would begin volume production of a new, highly efficient "hypercar." Within months, other automotive corporations (including GM, Toyota, and Honda) began singing the same tune. Each has promised to invent a vehicle that weighs little, consumes and expels virtually no toxic fuels, and combines the latest technology with economic and environmental efficiency.
The message that this and other examples send is clear. Although an established code for environmentally sustainable corporate activity has not yet descended upon the corporate landscape, such a code is coming. We see signs of it in the automotive industry, in agricultural innovations, and in the move from an economy of consumption to an economy of leasing (rather than owning) resources and services. Consequently, the wise CEOs—or should we call them the wise bridesmaids?—are now those who faithfully prepare themselves for the arrival of a natural capital revolution. To continue the biblical metaphor, we might say that they keep their sustainability "lanterns" filled; they refuse to rest until the new revolution appears in all its bridegroom finery.
A comparison between the advent of a new industrial revolution and the coming of Christ as heavenly bridegroom does, of course, overstate the point. At the same time, such an equation still raises questions. Chief among these is the problem of motivation. Hawken, Lovins, and Lovins seem to assume that if they proclaim the coming of a new industrial revolution, and if they provide a sampling of cases that appear to validate its imminent arrival, then corporations will respond accordingly. Whether a CEO acts out of terror—that is, the fear of being left behind—or out of genuine transformation remains irrelevant. What matters is not the motive for change, but change itself.
In theological terms, this is akin to saying that a person who practices her religion because she is terrified of hell is no different than one who practices it for the sake of love or conviction. While the behavior of both individuals might seem identical, their motivations remain quite distinct. What happens if the terror-based convert to sustainability eventually decides that the "hell" he fears does not exist? Profits are up. People are buying stock. Sure, there might be a few companies introducing creative ways of doing business. By and large, however, it's still business as usual. So why bother keeping the ecological lantern lit?
Without any real conviction about the value and importance of earth's natural resources, corporate leaders will "do the right thing" only to the extent that they remain terrified of losing financial profits. While Natural Capitalism makes a Herculean effort to instill the fear of God—that is, the fear of money—into today's CEOs, it overlooks the critical problem of a corporation's motive for change. In the biblical parable, the bridesmaids who waited faithfully for the bridegroom were not merely afraid; they were awed and exhilarated. They stayed awake because they could not tolerate the thought of missing that which they most loved and honored.
Staying awake for sustainability means being genuinely committed to sustainability. While genuine commitment takes many forms, one thing Natural Capitalism misses remains clear. A commitment based on fear of judgment is ultimately no commitment at all.
Natural Capitalism: Creating the Next Industrial Revolution. By Paul Hawken, Amory Lovins, and L. Hunter Lovins. Back Bay Books, 2000. 396pp. $17.95.
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