Essay on Natural Capitalism and Sustainable Business Development

This essay explores the concepts of natural and traditional capitalism, emphasizing their roles in sustainable business development. It begins by defining sustainable development and capitalism, highlighting the shift towards environmentally conscious practices like waste reduction and energy efficiency. The paper then delves into the principles of natural capitalism, which prioritizes resource efficiency and the preservation of natural capital, contrasting it with traditional capitalism's focus on profit and potential environmental harm. It discusses how natural capitalism addresses global challenges such as climate change and resource depletion, promoting practices like leasing commodities and reinvesting in natural resources. The essay provides examples of how businesses can implement natural capitalism to increase profits, satisfy customer needs, and contribute to a sustainable society, while also addressing the limitations of traditional capitalism. It further examines the role of natural capitalism in eliminating waste, reducing pollution, and promoting social justice. The essay concludes by underscoring the importance of natural capitalism in fostering a more sustainable and equitable future, where businesses and the environment can thrive together. This comprehensive analysis is intended to provide a detailed understanding of the benefits of natural capitalism for sustainable development. The essay is a past assignment available on Desklib, a platform providing study resources.

NATURAL AND TRADITIONAL CAPITALISM 1
Natural and Traditional Capitalism
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NATURAL AND TRADITIONAL CAPITALISM 2
NATURAL AND TRADITIONAL CAPITALISM
Introduction
Sustainable development refers to the process of adopting strategies and business
activities that meet the requirements of the organization while protecting, enhancing, as well as
sustaining human and natural resources that will be needed in the future. Many researchers stated
that for the business enterprise to excel, the management must apply the concept related to
sustainable development.1 The main goals of sustainable development are to end poverty, tackle
climate change, and reduce inequality, among others2. Capitalism refers to the productive use of
as well as reinvestment in the capital. Capital encompasses money, goods, nature, and people.
Characteristics essential to capitalism include capital accumulation, voluntary exchange, private
property, competitive markets, a price system, as well as wage labor. Natural capital is the
services and resources provided by nature. Natural Capitalism enables the organization to act
responsibly towards both people and nature. It increases profits and inspires the workforce of the
organization. Natural capitalism is also essential because it enables the organization to gain
competitive advantage. Some organizations begin to implement various initiatives for example
cleaner production processes such as waste reductions, energy efficiency, and recycling. These
modifications that take place in the environment represent a change between traditional and
natural capitalism. It is true that Natural capitalism can enable society to operate towards
1 Hawken et al. Natural capitalism: The next industrial revolution, 65.
2 Werner, Sombart. The Jews and modern capitalism, 56.

NATURAL AND TRADITIONAL CAPITALISM 3
attaining a sustainable society. It also enables organizations to satisfy the seventeen global goals
of the United Nation. This paper discusses the essence of natural capitalism for sustainable
development.
Natural capitalism offers uncountable services that most people benefit from every day.
Some of the services are direct and others are indirect. Investment in natural capitalism offers
direct benefits to society, business and the environment. Natural capitalism enables businesses to
satisfy the needs of their customers. It also increases the profit of the businesses. Natural
capitalism can also help in solving environmental problems. Some of the unique essential of
natural capitalism are discussed below.
Traditional Capitalists believe that free markets and competition can tackle some of the
environmental problems.3 Most of the traditional capitalists believe that the economy can
establish solutions that can solve environmental problems. They propose that economic growth
will allow for technological innovation as well as enable people to acquire enough natural
resources4. Nevertheless, the truth is not known. Currently, the general population of the earth
stays at seven billion. Recoverable resources for example gas, oil and coal are being drained.
Sources for clean water are in decline as well as fertile soil, biodiversity, fish stocks is depleted.
Both atmospheric and land pollution has led to the long-term collapses of the ecosystem. The
more realistic and proactive approach that can solve all these problems is the use of a suitable
form of Capitalism. The concept of this form of capitalism which is known as Natural
3 Fred, Magdoff and John Bellamy Foster. What every environmentalist needs to know
about capitalism, 25.
4 Jeffrey,Sachs. The age of sustainable development, 96.

NATURAL AND TRADITIONAL CAPITALISM 4
Capitalism aims at increasing the efficiency of resources by controlling the available natural
resources are being used, for example, forest, and water among others5. Reduction in the
consumption of natural resources will also permit businesses to get higher profit in the long-
term. Additionally, natural Capitalism encourages leasing of commodities, as opposed to the
creation of goods. These practices and processes make natural capitalism a better approach to
sustainability than Traditional capitalism.
This concept of natural capitalism was established in 1989. It mostly laid emphasis on
market-based environmentalism as well as emphases on the use of functioning markets to get a
positive outcome in terms of environmental accomplishment6. The term Capitalism was in place
during the time of the Industrial Revolution. Before the introduction of Natural Capitalism, a
different method known as traditional capitalism was being used however it was not sustainable
since it interferes with the surrounding environment. The world is facing problems, for example,
global warming, deforestation and different type of pollutions which causes aptitude of the earth
to be at high risk. Natural capitalism was introduced to act as a method of damage control. Thus,
it assists in growing the productivity of human capital, reinvestments, and resources as compared
to traditional capitalism.
The main principle of Capitalism (Natural capitalism) is to increase efficiency or
productivity in the use of natural resources.7 This essential concept can also help in reducing
5 Naeem et al. Biodiversity and human well-being: an essential link for sustainable
development, 125.
6 General, Assembly. Sustainable development goals, 72.
7 Ted, Steinberg. Can capitalism save the planet? On the origins of green liberalism, 23.

NATURAL AND TRADITIONAL CAPITALISM 5
carbon footprint. Natural capitalism can also assist in extending the resources particularly the
natural resources that are on Earth to many years.8 Nevertheless, traditional capitalism cannot
perform the same to natural resources. In traditional capitalism, most of the resources are lost
through wastage. This, therefore, indicates that this form of capitalism is not viable because it
does not protect the environment. Natural capitalism used the innovative technique in creating
commodities as well as increases efficiency thereby reducing spending on materials as well as
energy9.
Reinvestments, as stated above, remains part of natural capitalism. It mainly concentrates
on human capital and natural capital. Reinvesting in nature permits fishermen, forest and farmers
managers to exceed or match the high yields as well as profits sustained by chemically driven
practices10. Natural Capitalism enables to reinvest the profits that they earned thus helping them
in expanding, sustaining and restoring the scarcest type of capital, for instance, natural capital.
Initially, such benefits are being earned by industries like Collins Pine. Ranchers using
biologically stimulated grazing techniques increase the number of their heads as well as the
8 Thomas, Gladwin. Capitalism critique: Systemic limits on business harmony with
nature, 72.
9 Wei, Jiang. Ecosystem services research in China: A critical review, 10.
10 Michael Carley and Ian Christie. Managing sustainable development, 45.

NATURAL AND TRADITIONAL CAPITALISM 6
diversity and density of their range in most areas. Farmers also grow more food crops with lower
risk and higher profit by imitating the behavior of the ecosystem rather than treating soil such as
dirt11. As more Companies take Continue to use the concept of natural capitalism, more will
benefit from the reinvestment in natural capital. On the other hand, traditional capitalism remains
the opposite of natural capitalism because it mainly concentrates on the value in terms of goods
as well as capital. Firms in the sector of business should conduct their activities morally and they
should not damage the surrounding environment. Organizations should also shun from
destroying natural capital. Firms should implement reinvestments, particularly in natural
capitalism in order to maintain the natural system as well as to expand and restore natural capital
in the world. Also, businesses can eliminate infertile waste as well as applying the use of ethics
in undertaking businesses12. There are two major ways organizations can eliminate waste of
water, materials, energy as well as other resources at a profit. The companies can use a fresh
method to design all industrial systems. The companies can also change old industrial
technologies and replace them with new ones, specifically with those that use natural processes
as well as materials. Conversely, the unsound technique that has been established is at risk of
damaging the overall of Mother Nature as well as social integrity. This case can be seen in
11 Joël, Houdet, Michelle Browne and Fonda Lewis. Tourism and Natural Capital: Inter-
Dependencies Between Tourism, the Economy, and Ecosystem Services in South Africa, 290.
12 Charles et al. Walking the talk: The business case for sustainable development, 56.

NATURAL AND TRADITIONAL CAPITALISM 7
different countries, for example, Indonesia, Bangladesh and China which are facing a rise in
child labor because most factories produce sweatshops in the countries.
Natural capitalism help in solving the problems associated with the other forms of
capitalism such as traditional capitalism. It considers the worth of human capital in spearheading
sustainable development. In a sustainable society, individuals freely have the ability to satisfy
their needs. Natural capitalism will allow most of the people to neglect the social injustices that
are rampant amongst different cultures as well as throughout the Universe13. Traditional
capitalism has enabled most of the countries to remained absolute losers and absolute losers. The
implementation of a flow and service economy supported by Natural capitalism improves the
relationship between consumers and producers and this may increase the sales of goods and
materials of one country.
Natural capitalism is very essential than other forms of capitalism because it assists in
eliminating as well as discards the idea of environmental pollution. Op shops are a typical
example of how Natural capitalism can remove waste because they advocate reducing waste and
consumption through recycling and reusing. The main cornerstone of natural capitalism is
resource efficiency. It reduces waste and eliminates the concept of waste by implementing
biological processes, patterns, as well as materials. Conversely, traditional capitalism reduces a
smaller amount of waste as compared to that being reduced by natural capitalism. It is true that
traditional capitalism is not good for sustainable development. However, it makes an essential
contribution for assembling process and these are illustrated on outlines of nature. Natural
capitalism is quite important because it lowers the use of natural assets and it also supports the
13 McDonough et al. Analysis of publication trends in ecosystem services research, 85.

NATURAL AND TRADITIONAL CAPITALISM 8
creation of positive ecological results. Conversely, the possibility that traditional capitalism will
damage our nature is undeniable and high.
According to the World Bank and the United Nations, ‘Natural capitalism enables
ecosystem and the Planet’s biological engines to produce many commodities that human being
depend on for consumption. The services of the ecosystem include cycling water and nutrients,
regulating climate and atmosphere, providing biodiversity and pollination, controlling diseases
and pests, as well as detoxifying and assimilating wastes of the society. These services offer are
more important to the economy. This is because without the services, there will be no economic
activity and there will also be no life. Therefore, Natural capitalism enables organizations to
reverse the loss of ecosystem services while increasing the profits of the firms.
Natural capitalism identifies the critical interdependency that exists between the use of
human capital and the production as well as the maintenance and supply of natural capital. Many
researchers affirm that when the organizations recognize this important correlation with the
valuable resources of the earth, the people as well as the businesses they support will stay to
exist. Traditional capitalism mainly recognizes the value of goods and money. Conversely,
Natural capitalism not only recognizes the value of money but take into consideration the human
capital and natural capital. Natural capitalism focuses on the essential role of different types of
capital that promote the development of a sustainable society. The concept of Natural capitalism
identifies that it is difficult to attain a sustainable development if the eradication of natural
resources happens without replacing it. A suitable illustration of this is the industry of mining.
Continuous use of minerals as well as metals can contribute to the exploitation of the
environment. Therefore, Natural capitalism has a strategy of increasing the efficiency of
resources and establishing new types of consumption. This concept of Natural capitalism reduces

NATURAL AND TRADITIONAL CAPITALISM 9
the dependence of the society on services and goods that needs the extraction of natural
resources for example oils, minerals, fossil fuels among others. In traditional capitalism, the life
cycle of the products is linear, while Natural capitalism will replace this life cycle by adopting
re-manufacturing, re-using strategies as well as by re-cycling used commodities and the wastes
produced by a specific production process for other organizations. Reuse, repair,
remanufacturing, down cycling and recycling are the main principles that can retain the gift of
good work and good materials. Therefore, Natural capitalism will enables people to benefit from
recycling and reusing, rather than promoting landfill. This will, in turn, allow the businesses to
enhance efficiency and ensure the availability of recourses more so in the future. Natural
capitalism can also eradicate problems, for example, social injustice and pollution can be
eliminated by use of natural capitalism. It also reduces depletion of the available natural
resources and pollution which positively impacts the businesses14. It can also help reduce the
scarcity of work as well as hope, satisfaction, and security.
It is also true that the use of traditional capitalism can damage the external environment.
This can cause deformities and diseases to most people and animals. Conversely, Natural
capitalism provides a reduction in consumption and production of synthetic compounds as well
as encourages the use of recyclable, safe and biodegradable materials. This generates eco-
efficiency as well as reduces the number of wastes and toxins being circulated into the
biospheres.
14 Antony, Upward and Peter Jones. An ontology for strongly sustainable business
models: Defining an enterprise framework compatible with natural and social science, 105.

NATURAL AND TRADITIONAL CAPITALISM
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Though Natural Capitalism offers more benefits for sustainable development than
traditional capitalism which encourages the depletion of natural capital, limits the success of
monetary capital and lifting the worth of natural resources, there are some advantages that are
linked to the use of traditional capitalism. In traditional capitalism, tradition and custom dictate
the allocation of resources15. Each and everyone in the society know and understand their roles in
the production processes, whether it is a hunter, weaver or farmers. People also understand what
they are likely to obtain. Some of the advantages of capitalism include it ensures efficient
apportionment of resources according to the preferences of the consumers. It also ensures
efficient production by cutting costs to enhance productivity and competitiveness. Some of the
disadvantages of capitalism are that it does not consider the social benefit. For instance,
Capitalism organization that aims at maximizing the profit is likely to disregard negative
externalities, for example, pollution from production16. Pollution can in turn damage the living
standard of the people. Also, a free market economy may under-provide commodities with
positive externalities, for example, public transport, education, and health. This may contribute
to inefficient distribution of resources. Even those who support capitalism will confess that the
government must help in the provision of public services and public goods in society that
practice capitalism.
Conclusion
15 Michael, Carley and Ian Christie. Managing sustainable development, 65.
16 Velten et al. What is sustainable agriculture? A systematic review, 635.

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11
There are various suitable approaches that can provide a solution for sustainability. As
discussed in the paper, sustainable capitalism refers to the development and adoption of
sustainable practices suitable for the protection of natural resources.17 Natural capitalism is
smarter as well as more cost-effective business practice. Natural Capitalism remains more
essential than other forms of capitalism such as traditional capitalism because it assists in
eliminating as well as discards the notion of environmental pollution. Natural capitalism refers to
a recent industrial system which helps in reducing the dependence of human being on natural
resources, known as natural capital. It also improves efficiency by extending the use of natural
resources through innovative solutions. It also laid emphasis on market-based environmentalism
as well as emphases on using functioning markets to create a positive outcome in terms of
environmental accomplishment. This paper supports the use of natural capitalism as it can help
in solving environmental problems. We also found out that traditional capitalism has many
wicked problems upon the natural World and humanity. Even though shifting from traditional
capitalism and current behavior business models is often a challenging process because the
business model is a new thing. Therefore, to ensure that there is sustainability; the government;
businesses and the surrounding society should work together. The government must work in the
best interest of the Citizens and ensure that sustainable practices are in place. The society should
also ensure that there is a practice of ethical use of available goods and services. And, the
businesses should not be driven by self-interest. The management should ensure that there are
sustainable practices in organizations. Sustainable capitalism should also institute regulations
17 Richard, Smith. Defining corporate social responsibility: A systems approach for
socially responsible capitalism, 62.

NATURAL AND TRADITIONAL CAPITALISM
12
and policies to protect the existing natural resources and to invest back into the surrounding
environment with the aim of reversing the degradation.
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