Sustainability UsingThe Natural Step Framework

January 23, 2008

Agenda

The Fundamentals of The Natural Step

• Bob Willard: The Business Case for Sustainability

• Sustainability Overview

• Science & the Natural Step Framework

• Case studies

Applying The Natural Step

• Guest Speaker

• Exercise: How to develop a sustainability plan

• Taking the Natural Step back to your organization

Green vs. Sustainability

Green

• Detail focused

• Tactical

• Ecological

• Focus on being less “bad”

• Lacks common definition of success

Sustainability

• Whole systems focus

• Strategic

• Triple bottom line

• Focus on aligning with nature’s cyclical processes

• Capable of defining success

Living Planet Report 2006, WWF

http://www.st.nmfs.gov/st1/econ/oleo/chap2.pdf

US Fishing Landings: 1830 - 1990

“Approximately 20-30% of plant and animal species … are likely

to be at increased risk of extinction if increases in global average

temperature exceed 2.5-4.5oF” – UN IPPC Report 4-6-07

Species Extinction

Global Perspective

Decline in Life Supporting Resources

Margin for Action

Population x Affluence x Technology

?

Path to Sustainability Origins of The Natural Step

The Character of Environmental Problems has changed:

Local Global

Few Large Sources Diffuse

Short Time Delay Long Time Delay

Low Complexity High Complexity

A Systems Perspective Emphasizes:

• Focusing "upstream"

• Principles rather than details

• Shared framework and a common language

• Unalterable system conditions

• Matter and energy do not disappear

• Matter and energy tend to disperse

• Value of matter is in its concentration and structure

• Photosynthesis is principal process by which net order is produced

Basic Science

Earth as a System

Open System

with respect to

energy

Closed System

with respect to

matter

Sustainability is

about the ability of

these cycles to run

forever.

1) Nothing disappears

2) Everything disperses

Slow geological

cycles - materials

from the Earth’s

crust

“Photosynthesis pays

the bills”

How we influence cycles

Relatively large flows

of materials from the

Earth’s crust

1Introduce persistent

compounds foreign

to nature

2

Physically inhibit

ability of nature to

run cycles

3

Barriers to people

meeting their

basic needs

worldwide

4

Sustainability defined: The four System Conditions

Concentrations of substances

extracted from the earth's crust

Concentrations of substances

produced by society

Degradation by physical means

and, in that society, people are not

subject to

Conditions that systematically

undermine their capacity to meet their

needs.

In a sustainable society, nature is not subject to systematically increasing:

1

2

3

4

System Condition #1

In a sustainable society, nature is not subject to systematically increasing

… concentrations of substances extracted from the earth’s crust.

HALOGENATED COMPOUNDS

chlorodifluoromethane chlorotrifluoromethane

dichlorofluoromethane

chloromethane

trichlorofluoromethane dichloroethylene

Freon 113 methylene chloride

chloroform

1,1,1 – trichloroethane

carbon tetrachloride trichloroethylene

chloropentane chlorobenzene

iodopentane

3-methyl-1-iodobutance

chloroethylbenzene

dibromodichloromethane

dichlorobenzene chlorodecane

trichlorobenzene ALDEHYDES

acetaldehyde

methyl propanal

n-butantal methylbutanal

crotoaldehyde n-penanal

n-hexanal furaldehyde

n-heptanal

benzaldehyde

n-octanal phenyl acetaldehyde

n-nonanal methyl furaldehyde

n-decanal

n-undecanal

n-dodecanal KETONES

acetone methyl ethyl ketone

methyl propyl ketone

methyl vinyl ketone

ethyl vinyl ketone

2-pentanone

methyl pentanone methyl hydrofuranone

2-methyl-3-hexanone 4-heptaonone

3-heptaonone

2- heptaonone

methyl heptaonone furyl methyl ketone

octanone acetaphenone

2-nonanone 2-decananone

alkylated lactone

phthalide

OXYGENATED ISOMERS C4H6O

C4H8O C5H10 O

C4H6O2

C6H12 O

C7H10 O C7H14 O2

C6H6O2 C6H14 O2

C6H16 O

C7H8O2

C7H10 O2

C9H18 O

C8H6O2 C10H12 O2

C10H14 O C10H16 O

C10H18 O

C10H20 O

C10H22 O C9H8O2

C11H20 O ALCOHOLS

methanol isoproponal

2-methyl-2-propanol

n-proponal

1-butanol 1-pentanol

x-furfuryl alcohol 2-ethyl-1-hexanol phenol

2,2,4-trimethylpenta-1,3-diol

x-terpineol

ACIDS acetic acid

decanonic acid SULFUR COMPOUNDS

sulfur dioxide

carbon disulfide

dimethyl disulfide

carbonyl sulfide

NITROGEN COMPOUNDS nitromethane

methyl acetamide benzonitrile

methyl cinnoline

ESTERS

vinyl propionate ethyl acetate

System Condition #2

In a sustainable society, nature is not subject to systematically increasing

… concentrations of substances produced by society.

HALOGENATED COMPOUNDS

chlorodifluoromethane chlorotrifluoromethane

dichlorofluoromethane

chloromethane

trichlorofluoromethane

dichloroethylene

Freon 113 methylene chloride

chloroform 1,1,1 – trichloroethane

carbon tetrachloride trichloroethylene

chloropentane

chlorobenzene

iodopentane

3-methyl-1-iodobutance

chloroethylbenzene dibromodichloromethane

dichlorobenzene chlorodecane

trichlorobenzene ALDEHYDES

acetaldehyde

methyl propanal

n-butantal

methylbutanal

crotoaldehyde n-penanal

n-hexanal furaldehyde

n-heptanal benzaldehyde

n-octanal

phenyl acetaldehyde

n-nonanal

methyl furaldehyde

n-decanal n-undecanal

n-dodecanal KETONES

acetone methyl ethyl ketone

methyl propyl ketone

methyl vinyl ketone

ethyl vinyl ketone

2-pentanone

methyl pentanone methyl hydrofuranone

2-methyl-3-hexanone 4-heptaonone

3-heptaonone 2- heptaonone

methyl heptaonone

furyl methyl ketone

octanone

acetaphenone

2-nonanone 2-decananone

alkylated lactone phthalide

OXYGENATED ISOMERS C4H6O

C4H8O

C5H10 O

C4H6O2

C6H12 O

C7H10 O C7H14 O2

C6H6O2 C6H14 O2

C6H16 O C7H8O2

C7H10 O2

C9H18 O

C8H6O2

C10H12 O2

C10H14 O C10H16 O

C10H18 O C10H20 O

C10H22 O C9H8O2

C11H20 O

ALCOHOLS

methanol

isoproponal

2-methyl-2-propanol n-proponal

1-butanol 1-pentanol

x-furfuryl alcohol 2-ethyl-1-hexanol phenol

2,2,4-trimethylpenta-1,3-

diol

x-terpineol

ACIDS

acetic acid decanonic acid

SULFUR COMPOUNDS sulfur dioxide

carbon disulfide dimethyl disulfide

carbonyl sulfide

NITROGEN

COMPOUNDS

nitromethane

methyl acetamide benzonitrile

methyl cinnoline ESTERS

vinyl propionate ethyl acetate

ethyl-n-caproate

isoamyl formate

ETHERS

dimethyl ether

dihydropyran EPOXIDE

Chemicals found in Mother’s Milk

System Condition #3

In a sustainable society, nature is not subject to systematically increasing

… degradation by physical means

System Condition # 4

In a sustainable society

people are not subject to conditions that systematically undermine their capacity to meet their needs .

society

environment

economy

What is the purpose of business?

• “Business that focuses just on money doesn’t invest in

the future -- in its employees, new ideas, markets or

products -- and won’t be around for long. Any successful

business is part of society, and exists to meet society’s

needs.”

– Sir John Browne, Group Chief Executive, B.P.

Subsistence

Idleness

Understanding

Identity

Participation

Affection

Human Scale Development,

Manfred Max-Neef

Creation

Freedom

Protection

Meeting Human Needs

How can a business be socially sustainable?

Start with the basics:

• The Golden Rule: “Do unto others as you would have them do

unto you”.

• Make decisions with: Participation, Transparency,

Accountability, Honesty.

Examples

• TerraClean – special rates for employees’ children's day-care centers

• Doubletree - Tri-Met Passes for all employees

• SERA Architects – ESOP, PTO in exchange for all transportation benefits

• Portland Roasting – Farm Friendly Direct program buying coffee directly from farmers and investing in community

• New Seasons – Neighborhood hiring and support, health benefits for family including partners

• Rejuvenation – ESL support, paid service days, Katrina project, interest free loan to support home buying

Specific opportunities

We will never learn to take care of nature until we learn to take care of each other.

Four System Conditions

In a sustainable society, nature is not subject to systematically increasing…

1. … concentrations of substances extracted from the earth’s crust;

2. … concentrations of substances produced by society;

3. … degradation by physical means;

and in that society,

4. people are not subject to conditions that systematicallyundermine their capacity to meet their needs .

How many pounds of material does it take to make

one laptop computer?

40,000 pounds or 20 tons

- Paul Hawken

Hitting the Wall

• Ecological - species, atmosphere, oceans, land ,water

• Health of workers, society, self

• Competition, prices, shortages, insurance

• Customer pressure, boycotts, bad publicity

• Social stigmas, recruiting problems

• Governments regulations, standards

Capacity

Demand

Interface, Inc.

• World’s largest commercial floor covering company

• First U.S. company to adopt TNS principles

• “Mission Zero” - eliminate negative impact by 2020

• Finance long term investments with short term savings

Interface

- from Interface web site

Interface - Seven Steps to Sustainability

1. Eliminate waste

2. Eliminate toxic emissions

3. Use renewable energy

4. Close the loop: create circular material flows

5. Resource efficient transportation

6. Sensitivity hookup: educate local community

7. Redesign commerce: Evergreen Lease

Collins Pine

• NW forest products firm founded in 1855

• Long history of sustainable forestry practices

• Trained 600 Klamath Falls employees

• Using TNS principles for all capital purchases

E-T

eam

P

E

T

WET CAT

JAT Adopt a-Hwy.

PP

& D

TR

ecycl

e

Product

Waste

Energy

Materials

Water Air

Community

JTS

Teams

Hot Lips Pizza

• Small Portland company - five stores

• Looking for distinctive market position

• Focused on sustainability & TNS

• Cut electric bill by 50%

• Changing to seasonal menu

• Benefits: financial, employees,

customers

Hot Lips Pizza

2004 BEST Award - Small Business Innovation

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are needed to see this picture.

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Whistler, B.C.

• International ski resort

• Effective community diffusion

– Early Adopters

– Supported by business, government and nonprofit

– Community Roll Out

• Whistler 2020 Sustainability Plan

– Goal to be fully sustainable by 2060

– Move toward 100% renewable energy & zero waste

– Provide affordable local housing to 75% of work force

• Won award as “… one of the most liveable communities and best in the world in planning for the future.” (Nov 2005)‏

U.S. Army

Sustainability

Strategy

Restoration

Sustainability Planning Process

A-B-C-D Analysis

A

CB

D

Backcasting

Defensive

Enterprise

Strategic

Enterprise

Sustainability Planning Process

A - Awareness

What do you know about sustainability and why it matters?

B - Baseline Mapping

What does your organization look like today?

C - Clear and Compelling Vision

What does your organization look like in a sustainable society?

D - Down to action

How will you manage and prioritize steps to sustainability?

Sustainability Analysis of Water Bottle

Sustainability Analysis of Water Bottle

SC1 – petroleum based

SC2 – traces of arsenic, phthalates, trihalomethane

SC3 – “mined” water removed from natural water cycle

SC4 – priced higher than gasoline

Sustainable Water – Alignment with Natural Step

Goal: Everyone has potable water where and when they need it

Four System Conditions

In a sustainable society, nature is not subject to systematically increasing…

1. … concentrations of substances extracted from the earth’s crust;

2. … concentrations of substances produced by society;

3. … degradation by physical means;

and in that society,

4. people are not subject to conditions that systematicallyundermine their capacity to meet their needs .

Which sustainability tools should I use?

• Natural Step

• Triple bottom line

• Cradle-to-cradle

• Natural Capitalism

• Precautionary principle

• Zero Waste

• Factor X

• Eco-footprint

• Life Cycle Assessment

• Environmental Management Systems –ISO14001, EMAS, SMS

1. Systems Level

2. Success Level

3. Strategy Level

4. Action Level

5. Tools Level

Five Level Model

Chessboard, rules of the game

Capturing King - Checkmate

Strategies for opening, middle and end game

Tactics for moving pieces

Books, classes, computer programs

Game of Chess

1. Systems Level

2. Success Level

3. Strategy Level

4. Action Level

5. Tools Level

Five Level Model

Nature’s laws & science

Social and economic principles

TNS system conditions

Natural Capitalism, Cradle-to-Cradle

Recycling, biofuels, organic farming, etc.

EMS/SMS, LCA, Eco-Footprint, LEED

Sustainability

TNS system conditions + profit (Triple Bottom Line) ‏

Restoration

Sustainability Planning Process

A-B-C-D Analysis

A

CB

D

Backcasting

Sustainability Objectives

To eliminate your organization’s contribution …

1. … to systematic increases in concentrations ofsubstances extracted from the earth’s crust;

• … to systematic increases in concentrations ofsubstances produced by society;

1. … to the physical degradation of nature;

1. … to conditions that undermine people’s ability tomeet their needs .

Consensus Sustainability Goals

• Zero net increase of carbon emissions (carbon neutral) – SC#1

• Energy sources are 100% renewable – SC#1

• Zero discharge of persistent bio-accumulative toxins (PBTs) – SC#2

• Zero loss of biodiversity and productive natural systems – SC#3

• Zero waste – SC#4

• Support people's abilities to meet their needs - SC#4

Sustainability Strategies

• Dematerialize: Shift business model from matter to service

• Favor the substitution of biological materials where possible

• Radically increase efficiency

• Design closed-loop systems

• Invest in ecosystem infrastructure

From Natural Capitalism

Direct Action Questions

• Right Direction: Are we taking measures that lead

toward overall success?

• Does it move toward eliminating a violation?

• Are tradeoffs involved?

Direct Action Questions

• Flexible Platform: Are we taking measures that can be further developed as future options become clearer?

• Are future sustainability options still available or is this a dead end?

• Is the sunk cost of this option a barrier to switching later?

• Key question: What Next?

Direct Action Questions

• Return on Investment: Are we taking measures that

provide adequate levels of financial return?

• What are the direct costs of this action?

• What direct savings or increased revenues might

accrue?

• What risks are there of not taking this action?

• What intangible benefits/capital will this action

provide? (Image, recruitment, community good will, etc.)‏

D – Direct Action

• Right Direction: Are we taking measures that lead

toward overall success?

• Flexible Platform: Are we taking measures that can be

further developed as future options become clearer?

• Return on Investment: Are we taking measures that

provide adequate levels of financial return?

Making Trade Offs

Vs.

Compact fluorescent Incandescent

Compact Fluorescent

Lightbulbs (CFLs)

save energy

CFLs have mercury

that can build up

CFLs cost moreCFLs last

longer

Making Trade Offs

Vs.

Compact fluorescent Incandescent

“A more creative methodology than

to trying to estimate if the impacts

outweigh the benefit is to start the

planning process from a point where

the trade-offs don’t exist.”

Russel Johnsson, Head of

Environmental Affairs, IKEA

SC#1 SC#2 SC#3 SC#4

Improve?

Systematically

reduces dependence

on energy derived

from a mixture of

nuclear (i.e.

uranium) and fossil

fuels (i.e. carbon,

sulfur, mercury).

Systematically

reduces

concentrations of

persistent

compounds for

refining uranium and

fossil fuels.

Also, nuclear waste

is created as a

product of nuclear

energy production.

Reduce

encroachment on

land for new power

infrastructure, and

mining of uranium

and fossil fuels.

Improves energy

efficiency that

reduces need for

extra power plants

and capital costs.

Trade-off?

Systematically

increases flow of

mercury if light

bulbs not disposed of

properly.

Increase

encroachment on

land for mining

mercury.

Economic barrier to

some people because

CFL lights are more

expensive.

IKEA Analysis

1. Does the decision move toward sustainability?

IKEA Analysis

– Seek vendors with lowest mercury content

– Set up mercury recycling program

– Use strong market presence to educate public on CFL benefits,

create higher demand

2. Does this initiative provide a stepping-stone

toward sustainability?

– Life cycle costs are lower with CFL

– Costs come down as volume increases

3. Does this initiative provide a sufficient return to seed

future investments?

IKEA Example

• Created criteria that exceeded EU eco-labelling scheme

• Found Chinese producer that was competitive on price,

performance, and exceeded efficiency and mercury

requirements.

• Prices cuts for 11W CFLs

• Cooperation with Swedish NGO on education campaign on

energy (and cost) savings.

• Advertise in all major newspapers a free give-away of CFLs for two week period (600,000 were given away)‏

• Cooperation with Swedish NGO on review of manufacturing

practices. Documented on video and made available in stores

• Free take-back of all mercury containing light sources.

• Contracted recycler to capture mercury where 98 to 99

percent is recovered.

Strategies for Success

• Create a sustainability team

• Get management and staff activelyinvolved

• Start small with quick wins

• Publicize successes

• Budget time and money to support the effort

• Ultimately build into business planning

Lessons Learned

• Importance of a solid framework - shared mental model

• Key to success – Backcasting from a vision of a fully sustainable system

• Collaboration – built on consensus, no “enemies”

• Patience - Natural Step, not Natural Leap