There’s nothing wrong with profit

L. Hunter Lovins, a pioneer in the field of sustainability and renewable energy, received the Alternative Nobel Prize back in 1983. Time magazine has named her a Millennium “Hero of the Planet.” Lovins has spent decades helping companies and communities operate in ways that conserve resources while enhancing profits. In “Brass Tacks” she explains that her vision of a sustainable economy that serves human well-being is not a utopia.

The American L. Hunter Lovins holds degrees in law, political science, and sociology, as well as several honorary doctorates. She is currently a professor of Sustainable Management at the Bard MBA in New York City. Co-founder of Tree People, and the Rocky Mountain Institute, she is president of Natural Capitalism Solutions (NCS). Her organization is building an economy in service to life through education, innovative solutions and youth empowerment. NCS helps companies, communities and countries implement more regenerative practices profitably.

Ms. Lovins, you studied political science and sociology, and you hold a doctorate from Loyola Law School. What aroused your curiosity and spurred you to become an environmental advocate?

I not sure that I had a choice. My mother was organized union activities in the coal mining country in West Virginia, and my father helped mentor Martin Luther King and Cesar Chavez. My family was never rich, so our vacations were spent in wild lands, where I watched how the beauty of the wilderness was diminishing. Taking responsibility for ensuring that our planet stays livable just seemed the right thing to do. My scientific publications focus on practical ways to solve problems. This approach has often led me to work together with organizations that many activists regard as ‘enemies.’ I try to understand what the interests of both sides are and seek ways we can cooperate to find solutions that work for all sides.

In your latest book, A Finer Future, you address the question of how to change business, finance, the energy sector, and other areas of our society so that they work for all of us. Why do we find it so difficult to make sure that life and work are beneficial for everyone?

We’ve become ensnared in the neoliberal narrative that markets are perfect and self-regulating. It might be nice if they were, but in the real world, there are strong interest groups that exert their influence to pervert markets. For example, global subsidies for fossil fuels such as coal, gas, and oil exceed $5.2 trillion US dollar every year. This creates a stronger demand for fossil energy than if they had to compete in a real market. Even despite this, renewable energy is now, essentially everywhere, cheaper than fossil energy. If such subsidies didn’t exist, we would have already completed the transition to renewable energies, electric vehicles, and a more sustainable way of doing business. What is remarkable is that even in the fact of vested interests and subsidies, renewables are starting to win. It’s time to change the story that guides us, and pull together to create a world that works for everyone.

"Without fossil fuel subsidies, we would already have achieved change”, said Hunter Lovins.

The subtitle of your book is “Creating an Economy in Service to Life.” Do you think that an economy that is in service to life can also be profitable?

There’s nothing wrong with profit. That said, if we were to count the very real costs to our economy imposed by the destruction of our ecosystem through conventional business processes into our calculations, no company on earth would today be profitable. Business should always be in service to human well-being and the health of our ecosystem. When you grasp this, it changes your perspective on doing business. Even without this awakening, however, responsible behavior toward human beings and the environment will improve shareholders’ profits. The Carbon Disclosure Project (CDP) has shown that the managers who measure and manage their companies’ CO2 footprint increase their return on investment by 18 percent compared to their competitors who are laggards in this. Companies that improve their energy efficiency and switch to the increasingly cheaper renewable ways to meet our energy needs will lower their costs. It’s not just about the survival of the polar bears. It’s all about doing business more intelligently so that everyone profits from it. This is why now whole countries, hundreds of companies (like you), thousands of cities and millions of people are working to become 100% renewable.

Is that what you’re getting at when you say that sustainability means doing not only the right thing but also the smartest and most profitable thing?

Yes. Life as we know it on this planet is in an existential crisis. However, we can still turn the downward spiral around by speeding up the energy transition, reducing our CO2 emissions, and implementing regenerative agriculture. There is so much that companies can do to help: General Mills is helping farmers on a million acres shift to regenerative agriculture, I saw that Daimler presented a whole range of electric vehicles and plug-in hybrids at the IAA. I drive an electric vehicle and love it. Soon, however, we may not own private vehicles: highly automated cars will transport us — on demand — far cheaper than paying to buy, fuel, insure and maintain a private car. Similarly, our electricity will come from renewables, with battery storage offered as a service. Or your car may become your battery: the battery of an electrically powered vehicle is normally used only for a few hours a day. During the remaining time, its storage capacity should be made available for other purposes. If the change brings economic rewards for every one of us, people will adapt quickly to low carbon lifestyles.

What do we have to do to persuade you to drive a Mercedes?

Oh, I’d love to drive one of your new electric vehicles. Even more, I would like to use an app to book my next ride in a self-driving Mercedes. If you develop the vehicle with the best performance, the market will be yours.

The EQC (EQC 400: combined power consumption: 21.3-20.2 kWh/100 km; combined CO₂ emissions: 0 g/km**) celebrated its US premiere at CES 2019 in Las Vegas.

You’ve dedicated your nonprofit organization Natural Capitalism Solutions to the goal of developing and implementing practical and affordable solutions for the problems facing humanity in order to create a sustainable future. What is your key to finding solutions?

We search the world for successful and profitable ways to tackle the climate crisis, the loss of biodiversity, and the crisis of inequality. There are countless ideas, and many people working on solutions with all their might. However, the solutions have to be economically viable and socially just. Let me give you an example: I’ve talked to a group that claims to have developed a catalyst that when subjected to hydrogen generates a lot of heat. The group claims it can serve as a source of heat for old coal-fired power plants, enabling them to stop burning coal. Eliminating coal is necessary. But when I asked them what a kilowatt-hour of this energy would cost, they didn’t have an answer. Fair enough, they’ve not built it yet. However, I told them, if the price per kilowatt-hour is higher than three cents, your idea is only a physics experiment. Wind and solar and the other renewable technologies now in the market are delivering power and storage at less than 3¢. Let’s start with the methods that are most cost-efficient and effective.

You once said that knowing where to start might be the biggest challenge. As an automotive company, we’re investing in expanding our fleet of electric vehicles, and our goals are for all of our plants in Europe to use renewable energy and be CO2-neutral by 2022. What kind of additional pioneering work could we do to promote sustainability in our sector?

Companies have a special responsibility. Daimler is shouldering this responsibility by conducting dialogues like this with its stakeholders and asking them what Daimler can contribute to the building a finer future. Companies that engage their customer, their employees and the communities in which they do business, tend to achieve greater brand loyalty, and engagement. In today’s world, these are crucial to achieving profitability. Daimler already considers it important to advocate for a better future, and its programs implement this objective. I would go even further. Daimler should engage with all of its stakeholders to envision a zero-carbon future for their lives, as well as yours. People’s loyalty and trust is a central factor in this kind of transformation process. In terms of the corporate culture, all Daimler employees should have the feeling that when they come to work they are shaping the transformation. When what they want for their families and communities is what they are doing at work, this delivers authentic engagement, innovation and profitability.

When companies operate in ways that are sustainable and environmentally responsible, how much do you think this affects employee loyalty and the ability to recruit new employees?

It has a crucial effect. Every company that has genuinely committed itself to sustainability is perceived much more positively as an employer. People want to work for companies that do their share. A committed workforce delivers an 18 percent increase in productivity and a 16 percent increase in profitability, according to a Gallup Index. Studies have shown that 96 percent of young people would like to work for a company, which involves them in the processes that shape the sustainability of their business model. These are all aspects of what we call “The Integrated Bottom Line”.

You’ve said that the human race already has all the technologies it needs in order to avert climate collapse, and that what it really needs is a new rationale, a sense of “what for,” in order to start doing so. What could this shift of attitude look like?

As my colleague and co-author John Fullerton puts it, “Sustainability is the outcome of a regenerative system, of behavior that regenerates human and natural capital.” This means behaving responsibly with regard to people and the planet. What could persuade people to behave in this way? We’re told that money is the only measure of success. But when researchers ask people what they really want, they say that they want to be happy: They want a sense of belonging, physical health, and to be part of something bigger than themselves. These goals are, in many ways, more important to people than money. Regenerative systems are founded on delivering authentic wellbeing. John Fullerton has laid out the principles of what he calls Regenerative Capitalism: These include empowered participation in which people have a say in decision-making in the systems that affect them, unleashing entrepreneurialism, achieving the abundance that comes from diverse ecosystems, honoring place and community, balancing efficiency and resilience, delivering the wholistic wealth described above and ensuring the “right relationship” between the economy, our society and the health of the planet. We can have a vibrant global economy, so long as every place has its integrity. If we ensure that all humans have dignity and sufficiency, within the planetary boundaries, then all of us can achieve the prosperity we desire. This approach, called Doughnut Economics, is rewriting what it means to be in business. It is a better story for our future.

aimler AG is pushing ahead with the expansion of the global battery production network and is thus creating the conditions for the cross-divisional electrical offensive. The battery factory in Kamenz is one of eight factories at six locations on three continents.

Time magazine has named you a “Hero of the Planet,” and back in 1983 you received the Alternative Nobel Prize of the Right Livelihood Foundation, as well as other rewards for your pioneering concepts of “soft energy.” Nonetheless, it has taken more than 30 years for a noticeable change of attitude to set in. Did you never lose hope as you pursued your agenda?

Of course I did, often. Some of my role models died before they could see the change. And for a time I thought that I too would die before it happens. But, I’m still here, and I’m watching the transformation gain momentum. Will we succeed? I don’t know. We’re in a horse race against catastrophe. The good news? We’re in the race. We know what we have to do. We have the technology we need. Will we use it? The answer to that question will come from each one of us.

One final question, to satisfy our curiosity: Why do you always wear a cowboy hat?

(laughs) Because I’m a Colorado cowgirl.

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