The Natural Step for Business
241 Pages

The Natural Step for Business


241 Pages


The Natural Step for Business examines how four very successful "evolutionary" corporations in Sweden and the United States - including IKEA and Scandic Hotels in Sweden, and Collins Pine and Interface in the U.S. - are positioning themselves for long-term competitiveness using The Natural Step as a central part of their corporate strategy. Nattrass and Altomare puncture the myth that a company must choose between profitability and care for the natural environment, and present a timely and practical application of this exciting model for global sustainability.



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Published 01 January 1999
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EAN13 9781550923995
Language English
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   
“The great challenge of this era is to bring human activities everywhere into
alignment with the rest of the natural world. Business, with its resources and
capacity for innovation, has both the opportunity and the responsibility to
facilitate the transformation of industrial society. The Natural Step provides an
elegant framework, a compass, to guide us on the road ahead. The Natural
Step for Business is a powerful tool for all seeking a new mental model,
documented with the actual experience of successful corporations, to move
their business into a sustainable future.” — Maurice F. Strong,
SecretaryGeneral, United Nations Conference on Environment and Development;
Chair, The Earth Council; former Chairman and CEO, Ontario Hydro
“The question confronting leaders in all sectors is how to build enterprises
that can prosper by operating in greater harmony with the natural
environment. The Natural Step for Business illuminates principles to guide this quest.
Even more important in these times of momentous transition, it examines
four successful corporations quietly leading by example. I believe this book
will eventually stand out as a watershed of sorts, not only as a provocative
glimpse of what is being accomplished by a few, but as a spark to the
imaginations of a great many more.” — Peter M. Senge, Senior Lecturer, MIT;
Chairperson, Society for Organizational Learning; Author, The Fifth
Discipline: The Art and Practice of the Learning Organization
“The Natural Step is a lucid, science-based way to marry sustainability with
value. Now we have practical examples of how leading businesses are using its
principles to create exceptional competitive advantage.” — Amory B. Lovins,
Director of Research, Rocky Mountain Institute
“At Mitsubishi Electric, we have pursued sustainable development by utilizing
The Natural Step as the compass to guide our way together with the
implementation of an environmental management system. This book provides
easyto-understand concepts of lasting value because it helps people see the
relationship between their daily activities and larger environmental issues.”
— Tachi Kiuchi, Managing Director, Mitsubishi Electric Corporation;
Chair, Future 500   
“The Natural Step for Business should be compulsory reading for all those
concerned for the future of our planet. It provides a crisp, clear and powerful
analysis of how four corporations in very different businesses have taken
responsibility for their role in our shared future and successfully integrated
their business goals with environmental sustainability. I congratulate the
authors for making a valuable contribution that will be read by corporate
leaders for many years to come.” — Nicholas B. Sonntag,
Executive Director, Stockholm Environment Institute
“This book illustrates in a profound way how The Natural Step has helped
shape a new strategy for four diverse companies who are pioneers in the
sustainable business movement. The authors not only deliver The Natural Step
framework with real clarity but have also developed deep insights into how
four very diverse organizations have used The Natural Step to profit from
cooperation with ecology.” — Sarah Severn, Global Director,
Nike Environmental Action Team
“This book is a valuable resource for a variety of readers, from the uninitiated
in The Natural Step, to the academic seeking a sustainable development
perspective, to the TNS trainers and corporate practitioners. One is guided
through the fundamentals of The Natural Step in the context of the learning
organization, the evolutionary corporation, and other concepts and approaches
that have formed industry's sustainability learning curve. I strongly endorse
this book as a timely, thoughtful and articulate contribution to the body of
evidence in support of The Natural Step.” — Beth Beloff, Executive Director,
Institute for Corporate Environmental Management, University of Houston;
Managing Director, BRIDGES to Sustainability
“This book is a compelling interweaving of the disciplines of organizational
learning in action, to support corporate breakthroughs in sustainable
development. The learning histories of four companies are presented as
engaging stories, with the kind of evocative details and human challenges that
make for wonderful reading, insights and learning.” — Bryan Smith,
Co-Author with Peter Senge of The Fifth Discipline Fieldbook;
Vice-President, Arthur D. Little Inc.   
Brian Nattrass and Mary Altomare
Foreword by Karl-Henrik Robèrt
Epilogue by Paul Hawken
NEW SOCIETY PUBLISHERS   
To further the dialogue about business and sustainability, you can
contact Brian Nattrass and Mary Altomare via e-mail at:
Cataloguing in Publication Data:
A catalog record for this publication is available from the National Library of
Canada and the Library of Congress.
Copyright © 1999 by Brian Nattrass and Mary Altomare.
Second edition, February, 2001. Short run edition, September 2010.
All rights reserved.
Cover design by Miriam MacPhail.
Printed in Canada on acid-free, partially recycled (20 percent post-consumer) paper.
New Society Publishers acknowledges the support of the Canadian government’s
Book Publishing Industry Development Program and the British Columbia Arts
Council in the publication of this book.
Inquiries regarding requests to reprint all or part of The Natural Step for Business:
Wealth, Ecology, and the Evolutionary Corporation should be addressed to New
Society Publishers at the address below.
Paperback ISBN: 978-0-86571-384-0
To order directly from the publishers, please add $4.00 to the price of the first
copy, and $1.00 for each additional copy (plus GST in Canada). Send check or
money order to:
New Society Publishers,
P.O. Box 189, Gabriola Island, BC V0R 1X0, Canada.
New Society Publishers aims to publish books for fundamental social change
through nonviolent action. We focus especially on sustainable living, progressive
leadership, and educational and parenting resources. Our full list of books can be
browsed on the world wide web at:
The Natural Step for Business is part of NSP’s Conscientious Commerce series.
New Society Publishers
Gabriola Island, British Columbia, Canada
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Chapter 1 - the challenge of design: an introduction
As a guiding star, a compass, for our environmental work,
we have adopted the [Natural Step] four System Conditions for a
sustainable society. Everyone who has attended IKEA’s environmental
training has learned of the importance of these conditions. Each of us
in our various roles must now seek to put these into practice,
within the framework of IKEA’s business idea.
Anders Moberg — President, IKEA
What it’s all about, really, is to utilize the resources that we have on this
planet in the best way. That is part of our vision. We say that we are
turning from a resource over-consuming society to a resource-saving
society and that the environment discussion is really about taking care of
resources in a better way. Everybody still acts as if these resources were
unlimited, and as if we will always find other sources. But they will hit the
funnel as described by The Natural Step. By focusing on these items —
energy, water and waste — we are creating competitive advantages.
We are also saving the environment.
Roland Nilsson — CEO, Scandic Hotels
Interface is committed to shifting from linear industrial processes to
cyclical ones. To do this, we use a compass to guide us, and a
set of tools to help us. They are both the result of The Natural Step.
Interface will use four fundamental principles of science described
by The Natural Step as a guide to reduce its impact and footprint
upon the planet. We believe that institutions that continuously
violate these principles will suffer economically.
Ray Anderson — CEO, Interface
The Natural Step is one of the easier things to get people to
buy into even though they may not be able to remember what the
four System Conditions are. Once they’ve been exposed to them,
they have an instinctive understanding of what is being talked about.
It’s easier to get people to equate to this as opposed to other
management concepts that are designed to motivate people.
This is one that you can internalize quickly.
Jim Quinn — CEO, Collins Pine Company
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To my daughter Sarah,
whose life, and those of the children of tomorrow,
is my inspiration for engaging in this work;
and to my father and mother with gratitude for
providing me with the many opportunities and insights
that helped make this path possible.
To those I hold most precious, Staci, Kristen, and Mingo,
and especially Kylee and Sydney, tomorrow’s children,
who will inherit the world we are creating;
and to my parents, brother, and sisters
for teaching me to love, question, and dream.
Finally, to each other
for the deepening courage, commitment,
and love that is emerging
through our shared lives and work.
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Chapter 1 - the challenge of design: an introduction
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Foreword by Karl-Henrik Robèrt,
Founder of The Natural Step . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
1. The Challenge of Design: An Introduction . . . . . . . . . . . . . . . . . . . . . . . 3
2. A New Framework for Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Scientific Background to The Natural Step Framework . . . . . . . . . . . . . 31
Introduction to the Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4. IKEA: “Nothing is Impossible” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5. SCANDIC HOTELS: “Interactive Values Creation” . . . . . . . . . . . . . . . . . . 75
6. INTERFACE INC.: “The Next Industrial Revolution” . . . . . . . . . . . . . . . 101
7. COLLINS PINE COMPANY: “Journey to Sustainability” . . . . . . . . . . . . 125
8. Transformation by Design: Lessons, Tools, and Methodologies . . . . . . . . . 149
9. A Compass for Environmental Management Systems
by Susan Burns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
10.The Evolutionary Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Epilogue by Paul Hawken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
Index 215
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
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2.1 Industry’s Sustainability Learning Curve . . . . . . . . . . . . . . . . . . . . . . .16
2.2 Resource Funnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
2.3 Back-casting from Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.4 The Four System Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
3.1 Summary of the Rationale Behind the TNS System Conditions . . . .42
4.1 IKEA Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
4.2 IKEA Textiles: Four Green Steps towards Greater Environmental
Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
5.1 Scandic Hotels Operating Profit 1991-1997 . . . . . . . . . . . . . . . . . . .78
6.1 Interface Net Sales 1988-1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
7.1 Collins Products, Investing for the Future . . . . . . . . . . . . . . . . . . . .135
8.1 Tools and Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152-153
8.2 The Scandic Environmental Index 1996-1997 . . . . . . . . . . . . . . . . .157
8.3 Sånga-Säby: EnvirReport . . . . . . . . . . . . . . . . . . . . . . . . .159
8.4 Collins Products: Product Evaluation Team Form . . . . . . . . . . . . . .160
8.5PrExpense Request Checklist . . . . . . . . . . . . . . . . . .161
9.1 ISO 14001 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171
9.2 The ISO 14001 Environmental Management System . . . . . . . . . . .172
9.3 Integrating The Natural Step and ISO 14001 . . . . . . . . . . . . . . . . .173
9.4 The Natural Step, Back-casting, and Environmental
Management Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
9.5 Mitsubishi Electric America: Corporate Environmental Targets . . . .182
9.6 Electrolux Environmental Indicators . . . . . . . . . . . . . . . . . . . . . . . .183
10.1 Why Companies Practice Sustainable Development . . . . . . . . . . . . .193
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Chapter 1 - the challenge of design: an introduction
LTHOUGH WE ARE THE STORYTELLERS, the real credit for the content of
this book is the deeply inspiring work of others. The Natural Step orig-Ainated with its pioneering founder, cancer researcher and physician Dr.
Karl-Henrik Robèrt and his principal collaborator, physicist Dr. John
Holmberg. Visionary businessman/author Paul Hawken has been chiefly
responsible for bringing The Natural Step to North America and is a source of
continual inspiration to us. It is, of course, the innovative work of the business
people described in this book, especially the men and women of IKEA, Scandic
Hotels, Interface, and Collins Pine, that provides its real content. They very
generously opened their doors to us and granted us the time and the opportunity
to pursue the research which is the foundation of this book. Corporate
sustainability consultant Susan Burns shared her knowledge with us and contributed
Chapter 9 on environmental management systems. To all of these people we are
deeply grateful.
The first company to adopt The Natural Step, to experiment with it and to
discover its utility in business, and the first of our case studies, is IKEA. We are
very grateful to the co-workers of IKEA who shared their time and expertise. We
especially thank Russ Johnson and Kalle Nilsson who made our work with
IKEA as fruitful as it was. In addition, we thank Carina Andersson, Glenn
Berndtsson, Magnus Bjork, Chriztel Carleson, Mats Flygare, Bjorn Frithiof,
Magnus Guselin, Ingemar Hallberg, Anders Lennartsson, Erik Linander, Didi
Malabuyo, Marty Marsten, Dan McCulloch, Peter Olofsson, Cecilia Svensson,
Sven Olof Trulsson, Marianne Wir, and John Zurcher who shared their time and
stories with us.
We particularly thank Roland Nilsson and Ola Ivarsson at Scandic Hotels
for sharing Scandic’s environmental vision, achievements, aspirations, and
challenges; and Mia Olden for her kind assistance in coordinating our many
meetings. We extend special thanks to Jan Peter Bergkvist and the entire staff at the
Scandic Hotel Bromma for their warm hospitality. In addition, we thank Unni
Astrom, Gunnar Brandberg, Ethel Capelle, Steve Davidson, Charlie Eldh, Emil
ix   
Gammeltoft, Kerstin Goransson, Marie Hallander, Tommy Hansson, Kristina
Helin, Ken Hopper, Helene Jendelin, Pia Lonnroth, Monia Orstal, and Katri
Savolaninen. We also thank Peter Havéus and Staffan Persson of Sophus
Berendson, an important supplier to Scandic Hotels.
We express our heartfelt gratitude to Ray Anderson of Interface, Inc. for
sharing his vision with us, and special thanks go to Charlie Eitel, Michael
Bertolucci, and Jim Hartzfeld. We also thank Nicole Armstrong, Jo Ann
Bachman, Tim Barnes, David Black, Chris Carson, Cheryl Eaton, Kay Gordy,
David Gustashaw, Buddy Hay, Dan Hendrix, Michael Hutton, David Hobbs,
Joyce LaValle, Mac McGowan, David Oakey, Mindy O’Gara, Daniel Price, Bill
Reynolds, Jim Rowe, and Linda Timms.
We are particularly grateful to Jim Quinn of Collins Pine for being so
generous with his time, and to Connie Grenz for keeping us informed about the fast
pace of developments in 1998. In addition, our special thanks to Nancy L.
Helseth, R. Wade Mosby, Larry Potts, Dale Slate, Cami Waner, and W. Travis
We extend our special gratitude to Mats Fack and Jimmy Sjoblom of
SångaSäby for sharing with us their trail-blazing work in utilizing The Natural Step
four System Conditions as the basis for a useful and innovative system of
environmental metrics.
In addition, we extend heartfelt thanks to Nick Sonntag, Executive Director
of the Stockholm Environment Institute, and his gracious wife, Linda, for their
enduring friendship and warm hospitality; to Dr. Rigmor Robèrt for sharing so
much with us during our months in Sweden; and to all of the staff at The Natural
Step in Sweden, particularly Kerstin Abrahamsson and Magnus Huss, for their
very helpful advice, co-operation, and interest in this project. We also thank Leif
Johansson, CEO of Volvo, Mats Lederhausen, CEO of McDonald’s of Sweden,
Bertil Rosquist, Environment Director of McDonalds of Sweden, and Göran
Carstedt, Managing Director of the Society for Organizational Learning for
sharing with us their insights and experience regarding The Natural Step.
The genesis of this book is Brian’s doctoral research in Learning and Change
in Human Systems at the School for Transformative Learning, California
Institute of Integral Studies in San Francisco. Brian is deeply grateful to the head
of his dissertation committee, Dr. Ralph Metzner, for his guidance and
inspiration; to Dr. Alexander Laszlo for his introduction to the field of evolutionary
systems design; and to Dr. Lynn Tanner for his example of bringing academic
discipline into the results-oriented world of business.
There are countless others to whom we owe gratitude for their constant
support and interest in this project. We thank you all, particularly Tony Barrett,
Kelly Hawke Baxter, Beth Beloff, Catherine Gray, John Hagen, Jill Rosenblum,
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and Dr. Bryan Smith for taking the time to read parts of the manuscript and to
provide insightful suggestions on ways to improve it. Thanks to Bob Willard for
allowing us to read and quote from his unpublished paper on sustainability and
business. Finally, we extend special gratitude to Christopher and Judith Plant of
New Society Publishers for their faith in us and for their enduring patience and
good nature.
xi   
xii   
Karl-Henrik Robèrt
Founder of The Natural Step
when I was working as a medical doctor and cancer-treatmentMresearcher. During those years, I saw many things that confused me
about how we as human beings take care of our habitat. On the one hand,
messages from the mass media and the general public made it sound as if people
were more interested in getting richer and driving their cars faster than in
preserving our environment for the sake of their children’s future. On the other
hand, I saw an endless stream of concerned parents come into the hospital with
their cancer-diseased children. And these parents were prepared to do anything
for their children. So, something was wrong here: how could both of these
descriptions of human nature be true? Despite this deep concern for our
children’s well-being and futures, we seemed to handle the problem of maintaining
our environment by fighting instead of cooperating. Was there some way, I
asked myself, that we could learn to reach some consensus on how to change?
I was not only passionate in the beginning — I was obsessed. When I first
started out, I felt a very clear sorrow in my heart and fear about the destruction
of the environment. I am a cell scientist, and I see the cell as a metaphor for the
whole Earth, as there must be a balance of all flows in both the cell and the Earth
for each to survive. What I see is that humankind is running into a funnel of
declining life-sustaining resources and increasing demands. The converging walls
of the funnel represent the globally declining productivity of renewable resources
per capita. More and more resource input is required for each unit of production
from forests, agricultural land, and fishing waters. At the same time, the
declining vital life-sustaining resource base of nature is exposed to climate change and
increased concentrations of pollutants. Finally, the population of the world is
xiii   
increasing, projected to reach 10 billion people in the next generation, while the
traditions that keep our cultures together are getting weaker and weaker.
Many people are blaming business. It is easy to understand why. A large part
of the destruction we see is either directly attributable to business activities, or
indirectly to the consumption of the products and services that business
provides. On the other hand, even for a restorative society it is not difficult to see
the potential that exists in business to slow the convergence of the walls of the
funnel and to accelerate the opening of the funnel. Business is the economic
engine of our Western culture, and if it could be transformed to truly serve
nature as well as ourselves, it could become essential to our rescue. Perhaps there
are even quite simple solutions just waiting to be discovered. Perhaps the
strategies and traditions of our firms — developed in another and relatively simpler
time — are simply not relevant anymore. If so, could they be exchanged for new
traditions and strategies, which would combine protection of the common good
with a clear self-interest to do so? How much legislation would be required? To
what extent can we expect a profound and desirable transformation of our
business corporations to occur of their own free will?
There are many driving forces other than legislation. Many big
transnational companies have already suffered economically from public stigmatization due
to unethical ecological and/or social behavior. There are also many examples of
big transnational companies that have benefitted from taking a clear social and
ecological stand and from the international dissemination of such standards,
thus leveraging the companies’ impact for the public good. In addition, there are
many examples of business corporations that have suffered economically from
increased resource costs, increased costs for waste management, new rules from
international business agreements, etc. Part of the economic pressure that many
firms are beginning to encounter is due to increased competition from proactive
business corporations that are learning how to anticipate and avoid problems far
in advance of their competition.
Will businesses expand their focus beyond short-term profits to long-term
goals for our common good? Will the driving forces be strong enough? Or will
we need tougher legislation? Most likely, a successful transition will require a
combination of these factors. It is even reasonable to expect that proactive and
successful strategies implemented by some corporate actors will support the
development of constructive and proactive legislation to accelerate change in
other companies. In any event, it seems desirable to develop effective strategic
and tactical tools to ensure that business for the common good will pay off in
the short term as well as in the long term.
Whether we expect to see tougher legislation or tougher and tougher
competition from proactive companies, the question of whether the resource funnel
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may in any way influence tomorrow’s markets is, of course, rhetorical. And it is
likely that intelligent strategies to avoid problems — whether induced by
legislation or tough competition from proactive firms — will be virtually the same.
So, the interesting question is: how will the market change? It seems obvious that
good business in times of expected, profound change should avoid hasty or
precipitous solutions in the long run, and avoid investment strategies that will lead
to dead ends. Each step in the right direction should provide return on
investment quickly enough and sufficient enough to fuel the transition further ahead.
In short, when tackling the problems at hand, how can a company align
shortterm with long-term objectives in a step-by-step manner allowing each step to
pay off? And how can companies avoid the creation of new problems when they
solve the old ones?
It is obvious that sustainable development requires a sufficiently broad
perspective. From an overall point of view, the ultimate starting point would be a
framework given by first-order principles for ecological, economic, and social
sustainability for the whole ecosphere. Thereafter, the consequences of this
framework can be drawn for the individual business corporation. Finally, programs for
transition should be launched in which the following two aspects are combined:
1. Each investment provides as flexible a platform as possible for subsequent
investments in the direction given by the framework; and
2. Highest priority is given to “low hanging fruits,” i.e. investments that are
believed to give rapid returns on investment; this finances and empowers
the steps that follow which, in turn, become the next flexible platform
from which additional low hanging fruits are chosen in an iterative
The Natural Step is an environmental not-for-profit organization I started in
Sweden in 1989. The objective of The Natural Step was to address these
problems by seeking the advice and expertise of a growing circle of scientists,
economists, business leaders, and other stakeholders in society. I wondered if it would
be possible, if the participants in this dialogue represented the community well
enough, to develop relevant and solid, shared mental models for the definition
of sustainability based on first-order principles of sustainability. Could such
models then be used for problem-solving and investment strategies? If so, would
it be possible to demonstrate a competitive advantage from using such models?
To that end, a number of scientific reports and dissertations, as well as
teaching tools and good examples of the application of these tools, have been
published. The dialogue has spread internationally and Natural Step organizations
have been launched in the United States, Canada, the United Kingdom,
Australia, New Zealand, and the Netherlands. Japan and South Africa are now in
the process of establishing Natural Step organizations. In parallel with these
xv   
developments, a growing number of business corporations around the world have
started to gain experience from allowing global sustainability in the future to be
a guiding force of business today. Up to this point, the implementation of The
Natural Step principles in business has been anecdotal or described in annual
reports or the statements of individual business leaders. Until now there has been
no systematic study of the implementation procedures of The Natural Step
concepts, and consequently, there have been no answers to the following questions:
1. What has motivated specific companies to integrate ecological
sustainability into their business strategies and operations?
2. Why have they chosen The Natural Step framework as the most effective
means to accomplish this?
3. How exactly have specific companies used The Natural Step framework?
How does it relate to corporate change, visioning, strategic planning,
day-to-day operations, etc.?
4. How has The Natural Step framework been implemented?
5. What factors contribute to the successful integration of The Natural Step
framework into business operations?
6. What measures or indicators of success exist with respect to the
implementation of The Natural Step framework?
7. What lessons and tools can be derived from the experience of the
companies using The Natural Step framework, and how can these be made
available to other companies?
Brian Nattrass set out to answer these questions, and many others, in his
dissertation research. He and Mary Altomare have translated the insights gained
through that research into this book. They have done this in a comprehensive and
elegant study of four innovative and successful business corporations that have
adopted The Natural Step framework. It is my belief that this study is the first in
a long series of similar studies to come. In my mind there are few more
challenging and demanding scientific tasks than to study systematically the driving
forces behind sustainable development along with strategies, tools, stumbling
blocks, common denominators for success, and other important aspects of
sustainable development in every-day business. And it is yet another challenging task
to make these findings easy to understand and relevant to a wide audience. I am
deeply grateful to Brian Nattrass and Mary Altomare for giving themselves the
demanding task of producing the first implementation study of The Natural Step
framework in business. They have answered many questions that we have had,
and posed new and important questions for future studies.
xvi   
Chapter 1 - the challenge of design: an introduction
In an age when the speed, intensity, and complexity of change
increase constantly and exponentially, the ability to shape
change — rather than being its victims or spectators — depends
on our competence and willingness to guide the purposeful
evolution of our systems, our communities, and our society.
Bela H. Banathy
Designing Social Systems
in a Changing World
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Chapter 1 - The Challenge of Design: An Introduction
The Challenge of Design:
An Introduction
The journey to a different future must begin by defining the problem
differently than we have done until now….The task is not to find
substitutes for chemicals that disrupt hormones, attack the ozone layer,
or cause still undiscovered problems, though it may be necessary to
use replacements as a temporary measure. The task that confronts
us over the next half century is one of redesign.
Theo Colborn, Dianne Dumanoski, John Peterson Myers
Our Stolen Future
N 1628, ONE OF THE GREATEST WARSHIPS ever designed, the powerful
manof-war Vasa, pride of the King of Sweden, abruptly sank at the beginning ofIits maiden voyage with a full crew and many noble and illustrious guests on
board. It had suddenly reached the limits of its woefully inadequate design when
hit by a squall while still in its home port of Stockholm. Despite the frantic
efforts of its increasingly desperate crew, once the limits of the ship’s design had
been exceeded and overwhelmed, nothing that they could do in their frenzy
would be sufficient to stop a disaster that could have been avoided.
Today, more and more people throughout the world are becoming
concerned that the basic design of our entire industrial society is both faulty and
inadequate for the long-term voyage that is the dream of humanity. The
precious cargo of our family and friends, the multitude of other life forms, and all
that we hold dear is in danger while we maintain our present course. From
eminent scientists in leading research institutes with the most sophisticated global
climate computer models to Earth-wise shamans embodying the collective
wisdom of some of the planet’s oldest surviving indigenous peoples, urgent
warnings are signalling the approaching, yet still avoidable, collision with the limits
imposed by the natural world.
3   
Our industrial economy, indeed any human economy, is contained within
and dependent upon the natural world. The natural world is not separate from
the human economy. All of our basic life needs — breathing, drinking, and
eating — are entirely dependent on the continuing capacity of the natural world to
provide us with pure, uncontaminated air, water, and food. We are totally
dependent upon what visionary businessman and author Paul Hawken and
others call “ecosystem services.” These are the services valued at trillions of dollars
annually, provided at no cost by nature, such as global oxygen production,
regulation of climate, detoxification and recycling of human wastes, regulation of
the chemical composition of the oceans, maintenance of soil fertility, protection
against cosmic and ultraviolet radiation, and countless other services – none of
which have adequate technological substitutes.
Unfortunately, the natural world is becoming more and more impaired
everywhere on the planet in its capacity to continue to provide us with the vital
services we need to exist and to thrive with dignity and pleasure. The reality is
that in many parts of the world, and for vast and growing numbers of people,
life no longer provides much dignity or pleasure. Evidence is mounting that
living systems throughout the world are in increasing jeopardy. For example, Lester
Brown and others report that “unless humanity stabilizes the global atmosphere
that we have been steadily altering for more than a century, virtually every
1ecosystem on Earth will be at risk.”
Yet there is another way, a better way. The emerging conflict of humanity
with the rest of the natural world need not be inevitable if we use our insight,
muster forces globally, and act now. A small yet growing number of leading
business people from around the globe have heard and understood the warnings of
our cultural look-outs, those scientists, shamans, and other people of wisdom,
whose vision can pierce the mists of the future more clearly than most of us. It
is these perceptive business people who have made a remarkable discovery: if we
align the business economy with the economy of nature, there are still great
profits to be made — profits made in ways that enhance rather than endanger
the future of life on Earth.
There need be no conflict or compromise between commercial profits and
the environmental health and well-being of humanity and other life forms if the
design of commerce is aligned with the inherent design of the natural world.
Prominent architect and designer William McDonough and his colleague,
industrial chemist Dr. Michael Braungart, express it this way: “If people are to
prosper within the natural world, all the products and materials manufactured
by industry must after each useful life provide nourishment for something
new…. Products composed of materials that do not biodegrade should be
designed as technical nutrients that continually circulate within closed-loop
4   
Chapter 1 - The Challenge of Design: An Introduction
2industrial cycles — the technical metabolism.” Humanity must rediscover its
ancient ability to recognize and live within the cycles of the natural world. We
have done this since the birth of our species, and it is only comparatively
recently that we have veered off course.
The focus of this book is the insights of a passionate and dedicated cancer
physician, Dr. Karl-Henrik Robèrt of Stockholm, and the application of his
insights by leading-edge business people who have understood the urgent need to
change the design parameters of our global industrial system. The Natural Step
framework, created by Dr. Robèrt and subsequently endorsed by some of the
world’s leading scientists, provides a comprehensive definition of an
environmentally sustainable society that is easily understood and grounded in natural science.
Implementing it on a corporate level, practitioners of The Natural Step employ
methods similar to those of the quality movement and concepts from learning
organization theory, both of which are respected by many business people.
This book does not have the space to adequately explore the topics of
organizational learning and change, particularly the five learning disciplines as
described by Peter Senge in his best-selling book The Fifth Discipline and further
elaborated by Dr. Senge and his colleagues in the Fifth Discipline Fieldbook
series. However, our research has shown us that for those business corporations
that make the commitment to sustainable development, the understanding and
practice of the organizational learning disciplines will be the indispensable
prerequisite of a successful transformation to sustainability. We touch briefly upon
the learning organization as a metaphor in Chapter 2; — for more in-depth
reading, refer to the Resources in the back of the book.
This book does not describe at length the ecological drama that is now being
played out in virtually every region of this planet. We assume the reader has
some familiarity with the issues or can quickly gain it. There are many quality
books and reports, far too numerous to list here, that describe and document the
environmental, societal, and economic trends that are shaping the markets of
the future. For example, refer to The Ecology of Commerce by Paul Hawken, The
Choice: Evolution or Extinction? by Ervin Laszlo, Our Stolen Future by Colburn
et al, the annual State of the World and Vital Signs series by the Worldwatch
Institute, and to the books and websites listed in Resources.
What this book does deal with is the business journey to sustainability. The
very concepts of “sustainability” and “sustainable development” are relatively new,
and there is debate about their precise definitions. A consensus definition does not
exist. A commonly cited definition came out of Our Common Future, the 1987
report of the World Commission on Environment and Development (the
Brundtland Commission). According to the commission, development is
sustainable “if it meets the needs of the present without compromising the ability of
5   
3future generations to meet their own needs.” The vagueness of this definition
raises several questions: How are needs (present and future) defined? How are
those needs prioritized? What about equity (now and in the future) and the just
distribution of resources? Carl Frankel, in his insightful book In Earth’s
Company, explores the evolution of the concept, and finds that once we get
beyond the Brundtland Commission’s definition, sustainability is characterized
in terms of harmonizing three elements: economics, environment, and social
equity. As Frankel observes, “Growth is to be pursued in a manner consistent
4with long-term environmental protection and social fairness.”
John Elkington, in his recent work Cannibals with Forks, cites Herman
Daly’s definition that to be sustainable, a society needs to meet three conditions:
“its rates of use of renewable resources should not exceed their rates of
regeneration; its rates of use of non-renewable resources should not exceed the rate at
which sustainable renewable substitutes are developed; and its rates of pollution
5emissions should not exceed the assimilative capacity of the environment.” As
is pointed out in the next chapter, the very concept of sustainability arose
because of our growing awareness that human activities appear to be reaching
thresholds that are unsustainable with respect to the natural environment that
supports those activities. We are beginning to understand that crossing some of
these thresholds may be irreversible.
The need to develop a more precise definition of sustainability and related
concepts such as sustainable development and sustainable growth has been a
driving force behind the work of Dr. Karl-Henrik Robèrt, his colleague, physicist
Dr. John Holmberg, and other scientists and researchers affiliated with The
Natural Step. As Dr. Robèrt has commented, “Everyone talks about
sustainability, but no one knows what it is.” It is precisely this dilemma that he sought to
clarify, a search which resulted in the identification of four “System Conditions”
that define societal sustainability. The very issue of how we can clearly
conceptualize a sustainable society is at the heart of The Natural Step framework
described in Chapters 2 and 3.
6Carl Frankel speaks of “the great divide” that exists between two categories
of corporations in their attitudes toward “the environment.” On one side of the
great divide are those companies and individuals who have come to understand
that their relationship to the natural world affords a true business opportunity
for the corporation, that properly approached, it can represent a source of new
profits and creativity. On the other side of the divide are those companies and
individuals who still regard the environment as merely a cost to the corporation,
something to be dealt with through regulatory compliance and risk
management surely, but rarely an opportunity for innovation and new revenues, with a
kind of second-class status amongst the corporate echelons.
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Chapter 1 - The Challenge of Design: An Introduction
The central thrust of this book is to describe how four successful and
dynamic companies, two of them global in nature, one principally European and one
principally American — IKEA, Scandic Hotels, Interface, and Collins Pine —
are learning to integrate sustainable development at both the strategic and
operational levels for improved performance and profitability. These companies,
described in Chapters 4–7, have shown marked improvement in each aspect of
their relationship to sustainability’s triple bottom line: profits, people, and
planet. For these corporations, the environment has attained first-class status within
their organizations. These companies have crossed the great divide to the
positive side, where sustainable development takes its place in the executive suite
with the other core competencies of the corporations.
As we will examine in the chapters to follow, benefits to the companies that
have integrated The Natural Step framework into the heart of their corporate
strategy and operations include improved competitiveness, lowered costs,
enhanced profits, greater resource productivity, enhanced new product
innovation, improved staff morale, reduced staff turnover, lower environmental
impact, and greater market share.
In the last section of the book, Chapters 8–10, we summarize the major
lessons and tools that emerged from our research on these four companies.
These chapters detail what we’ve learned, along with a vision of what
corporations can become — and need to become — in order to contribute to the
healthy continuation of the communities of which they are a vital part. We
include here a very useful chapter written by corporate sustainability consultant
Susan Burns that describes the relationship between The Natural Step
framework and environmental management systems; this concept is gaining
popularity worldwide as an effective resource for management in the movement toward
corporate sustainability. In the final chapter, we explore what we mean by an
evolutionary corporation.
A Synopsis of Our Argument
1. The whole structure of industrial society is based on a faulty design.
Ours is a take-make-waste society that violates the conditions for
sustainable human life on Earth. To understand the problem, we need
to take a natural systems view of our society and its relationship to the
2. Although the elements of the problem are complex in their many
dimensions, the core issues are easy to understand through the
intellectual framework developed by The Natural Step.
3. It is likely not too late for industrial society to take action, if we act
now. There is no more time for business as usual. It is not necessary or