Karl Henrik Robèrt & Paul Hawken, Special Lecture on Sustainability

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ISAACS: So, welcome. My name is Bill Isaacs and I'm part of the Center for Organizational Learning at MIT, for those of you who I don't know, which is some. I'm happy to have the privilege of introducing our two speakers this morning. And the way we'll do it is to have one speak first and then have an introduction for him. And then the second.

And the first speaker will be a man named Karl Henrik Robert, who is from Sweden and is an associate professor in medicine in Sweden and a cancer specialist, who some years ago started an environmental organization for sustainable development in Sweden. And this organization is called The Natural Step and it's had quite an impact in that country. And his aim, essentially, was to educate the nation about environmental concerns. And he's had some success in that, I would say. Essentially, what he's here to do is to talk about his experience and we'll hear from him in a moment.

We also have with us Paul Hawken, who's a writer and entrepreneur, and I'll introduce him more formally in a little while, after Karl is finished. So it's a great pleasure to have these two here with us. It's significant in my mind because we are interested in discovering ways that business and the environment could actually talk to one another, to have a conversation, even.

And I see what we're doing here as the beginning of that conversation as far as the efforts of the Learning Center at MIT go. And we'll see where we go from here. But I feel like it's a certain seed ready to be planted today. So without further ado, Karl.

ROBERT: Thank you so much. Does it work up there now? Can you hear my voice clearly? I'm a cancer scientist and a cancer doctor, as you just heard. And my scientific work has been entirely concerned with cancer cells from patients who have attended the clinic which I've been heading. So I've done both things, treating cancer-diseased patients and doing scientific work on their cancer cells.

And it has been a systems approach, trying to understand what goes wrong in this little micro cosmos, which is a cell. And this was the starting point for this environmental organization because on that level, economy doesn't mean anything. You can't argue with cells. You can't urge them to succeed in processing mercury or break down freons or survive without [? phosphate. ?]

Still, it turns out that also economists and politicians are constituted by cells. So it should serve as a rather neutral non-aggressive starting point for consensus. And the idea was to come beyond our tendency to fight when it is about environmental issues and economy. To reach beyond that point and try to build up very solid intellectual knowledge.

The idea was that one part of the fight in Sweden is that people pay Greenpeace and other organizations to do something and then they go on living like nothing has happened. So they leave it to pros to do something. But this, the idea here was to build up professional groups.

And the first group was scientists for the environment, to provide their professional skills for the environment. And after that, we have commenced and started and initiated and supported doctors for the environment, nurses for the environment, economists for the environment, industrial leaders for the environment, and so forth, 17 such professional groups. And what they do is that by idealistic reasons, they tried to find out in what way can our professional skills support the environment.

So instead of paying someone else to do something, they enter the environmental movement with their professional skills. This was the idea. We now have 7,000 such people involved in those 17 professional groups. And The Natural Step is a sort of federation to link them together, support them and help them and educate them.

And what we do is that we share the same system overview, which is elaborated by scientists for the environment. This was the first task, to see what we agree upon. Because it seems that everyone else is dealing about what we don't agree upon. And the newspapers and media is stuffed with what we do not agree upon.

But we turn that upside down. What do we agree upon? So I invited scientists all over Sweden to see what we could agree upon as to intellectual stuff which could be useful to business leaders and politicians. This was the task. And I explained to them that if we can not agree upon anything, it must be published.

Because we have been studying those issues in thousands of years. And if we haven't still reached any knowledge which is relevant and that we can reach a decision and consensus about, it should be published. It's astonishing. And they realized that this is an intellectual challenge.

So I succeeded to make them interested in this. And my point, my entering ticket was the cell, since I'm a cancer scientist. So I invited physicists and whatsoever, and together we explained the system. Ecology as superimposed on that economy, which belongs to the same system. What can we agree upon?

And I realized from an intuitive level that the only thing we can reach a consensus on is the core knowledge, the trunk and the branches, the general principles of the system, the time dynamics in it and so forth. But the details, or the leaves, we will leave to the specialists amongst those leaves to handle. And I had a feeling of that as long as we can see the trunk and the branches, all the specialists about the leaves can put them on themselves, opening up for creativity.

Now, all systems are constituted like that. There is a solid structure, the trunk and the branches, and there are all the detail, the leaves. For instance, your brains. The human brain is exactly organized, it even looks like that. And it functions in the way that it-- thank you-- it uses division of labor. So that part of the brain takes care of that, that part takes care of that, that part takes care of that.

And then this computer has an extraordinary capacity to communicate between those parts, particularly in females, unfortunately for me. They have it easier to comprehend the whole system in the same time. Therefore, they are also more worried about the environment that males are all over the world, because they can take in more knowledge in the same time without losing track of the whole. And we know why from an [INAUDIBLE] reason, too.

Now, the point is that in spite of that we are geniuses when it is about to handle complex systems as individuals, even the males are geniuses in comparison with the most complex computer we have. It is a silly toy in comparison with this computer when it is about handling complexity. In spite of that, we behave like idiots together, which is very sad.

And the reason is that we do the same as the brain. We implement division of labor, but we find it much more difficult to communicate between one another than it is within one genius, parts of the brain to communicate with one another. And the other part, which I think is much more important, is that we very often get very sloppy about the trunk and the branches.

So an organization generally don't train about what is the sole instruction of our purpose. Why do we exist? What is if we want to do? What are the non-negotiables parts of the structure of this company or this local authority is supposed to handle?

Or the other hand, here we find the challenge. Because if a company or an organization or a team starts really hard to train about the sort of structures, and then they do division of labor, an organization can become more intelligent than the individual players because a lot of people together master more skills and competence than any individual. One example of that is that when the Americans wanted to go to the moon.

They collected metallurgical specialists, fuel specialists, computer specialists, astronomers, whatever. And they trained over the same non-negotiable structure of the system. And they had exactly the same view of it, that the moon existed. For instance, the people who thought that it was some kind of psychological projection were not invited into that protective group. And they had exactly the same idea of all that and they trained over the same solid structure.

And after a while, this team could go run an electric car on the moon, which is a project so complex that no single human brain can comprehend or achieve that result. Our problem is that we can't run electric cars here where we live and where the socioeconomic benefit would be so much greater than to have it on the moon. And the reason is that we haven't done this. We haven't tried to study what is non-negotiable in the system that we are in charge of, so to speak.

So we have to move into a new house. Ecology means the knowledge about the house. Since you are geniuses as individuals, but have a tendency to become dumb together like all humans, particularly if the group is too large, we have to ask you as individuals, how do you run a project like that, moving into a new house? A sustainable one this time. And you all do the same.

You know that there were a lot of measures, thousands of small details that must be done to fulfill this. But you start to organize it immediately. And you have in your head, you have the time axis for the project. And let's say that you and your husband or you and your wife has got a new job. And it will be in Washington and you are going to start your new job in three years from now.

You know that there is a history haven given you a certain economy and a few other things, furniture, whatever, which will be implemented into the new house later. You have a present year where the telephone calls to banks, people selling houses, whatever. And then when the project is completed, your brains immediately, without any plan, identify four new non-negotiable branches.

The trunk is the project of moving to the new house. And the four branches are as non-negotiable, solid. The first is that the house must be in the neighborhood of Washington, close enough for both to travel to their jobs. This is the geographical one. The second one is that you must be able to afford a new house, living, non-negotiable.

The third is that it must fulfill the functions of your family. If you are alone or five kids and whatever, and there are more such things. Now, the fourth is that it must fulfill certain minimal criteria of house standard. Now you arrange thousands of things to converge into the fulfillment of all four branches. You put on the leaves without violating any of the major rules. And you do that automatically, your computers function just like that. You even find it easy, particularly females, to move to a new house.

Now, you do this so skillfully that it never happens that you only fulfill three of those. Because non-negotiable system conditions must be fulfilled, all of them. It doesn't happen that someone ends up in Florida trying to figure out how things could go so wrong or move into a house without a roof and so forth.

So you arrange the project so that it converged into that. And now the task is for the scientists, for the environment to see if this project can be defined in the same way. Could we identify so many major principles which are non-negotiable for sustainability? And then train over those and see to it that companies, local authorities, and whatever do the same? Put on all the details so that they don't violate the overall rules?

Now we must face what Earth is. It's a closed system with regard to matter. And you know, what we do is that we invite the heads of companies and heads of local authorities, together with middle managers. And we train them one full day and then they have a course book, and then we train them for two more days. Heads of major, big companies of Sweden, international ones like Ikea and Electrolux and so forth.

So they take this course together with our major heads. And after that, they are trained to train their employees. So the trainer goes home and trains their employees. And this is what they are trained with, this is the training material for the heads. And they have the same pictures that I'm showing you now when they train their employees.

So I don't show you this to teach you anything. I show you this to give you the pedagogics of what the heads of Swedish companies and local authorities get. And then when they go home, they find it a little bit embarrassing in the beginning to talk about thermodynamics and cellular biology because they have forgotten school. And one day, a book, and two more days is a little bit little in the beginning.

So they then have a video to make the lecture and then they have a training material with problems for their employees. So the employees are going to solve problems together based on the system thinking, that project which I've just described, moving into the new house. How do you do it in business? And all that is on the trunk and the branches.

And then we have also written an encyclopedia about the leaves. So scientists for the environment had also written an encyclopedia for those teachers so they can go home and look up all the leaves in the tree as well. And this is written based on the system conditions. I think that that will do so far.

We just tell them about thermodynamics in this closed system, which enters energy and what energy can do in it. And we have a metaphor-- elfs putting down in the big box with walls around it. And you have all the natural resources in the box. And you put them down and you close it and you isolate it. And you ask the business leaders, what do you think would happen in the box?

And they start to think. And then you ask, how many of you dare to open it after 2,000 years and look down into what it would look like. And they get an intuitive feeling that it doesn't gain weight nor does it lose weight, but its contents is a bloody mess of no value. They understand that and they can work their minds to it because they understand where they've eaten the seeds on the fields, they have.

When they have used the forest, they have, because the sun doesn't allow any more forest. And if they put lamps on the forest to make it grow and they use water from a pond to run electricity to the lamps, they understand that when the water is in the bottom of the box, it is, and the sun doesn't lift it up again. Now they start running fuel, biofuel from the forest.

And they figure out, if we run electricity devices with fuel from the forest, that will grow less forest than we have to burn because there are losses on the way. And suddenly they start to remember things from school which is relevant to this big box. And in their eyes, in the eyes of the elfs in the box, they would experience all these as bits, materialistic bits as dispersed, worthless matter. Because everything has a tendency to disperse.

And at the beginning, we don't talk about that as the second law of thermodynamics. We just give them a lot of examples of why they tidy up on Fridays because, you know, a mess has a tendency to appear spontaneously. And this is why they have to polish their car, to prevent it from dispersing. But no matter how they polish, it will eventually spread into a cloud of rust. And they know that. It's just a matter of time.

However, nothing disappears, and this is news to most of them, including the major politicians in the Swedish parliament. They think that things disappear. They think that when a gasoline tank is empty, the gas has disappeared. And you have to take some time to tell them that their realization or comprehension of the world or reality is due to the fact that it disperses.

So every atom in the gasoline is still there, but in a dispersed problem sort of shape. You know, as a bill to be paid, dispersed junk instead of concentrated structured value. So they understand after this, after having given them enough metaphors that the only thing that can be produced or consumed is values or quality. And quality is always constituted by concentration and structure, which can be measured in exogeny analysis and information value analysis.

As this matter and energy can not disappear, you can regard the company as a box. What comes in must come out. Do we consume more quality regarded as concentration and structure than we allow to rebuild, either by ourselves or together with nature? it's the whole box we look at.

And then we make them understand that the only true primary production unit we have in quality here is the green cell, which is good for them, and it's new. But they have it in their tummy. They understand that when you talk about it, they have had it in the stomach since they were children. But they have just not had an intellectual language to understand why we need the green cells.

So then we introduce the cell and explain to them how it is a cosmos of life events. And how complicated it is and how they completely dominate the quality on Earth. And that they are the primary production units, which is also called primary production, the photosynthesis. All other productions is secondary from that one.

For instance, the metabolism in our cells, which consume quality because we are not fueled directly by the sun. And they can see that, too. We are fueled by something which is fueled by the sun, namely those. Or indirectly, a cow, which is fuel from them. But since we are not directly fueled by the sun, we have to dissolve matter into dispersed junk, which they can visualize.

But the bills are paid because sun-driven water cycles and wind cycles bring the dispersed junk back to them and rebuild the quality. And therefore, we exist because they exist. And this makes it possible to draw a little first outline of the nature cycles, where the sun side of it all, through the plant cells, have the primary production of quality.

All other production is secondary to that and consume more quality than is produced, if you measure it exogeny. And they can understand and see that. However, as long as the bills are paid for, we and all other secondary production add quality because quality is not only exogeny. It is also information value.

So as long as our bills are paid for by the plant cells, we add value to nature and don't have to look upon ourselves as a burden to [INAUDIBLE]. And this is good for them, too. And then we give them the geophysical cycles, which are on thousands or millions of years, some of them.

And tell them how the deposits in the Earth's crust is also generated from the cycles on top of Earth. Which gives them a new comprehension of how it all evolves in this kind of everything-ology or whenever you would call it. That we can have a time axis where each part here is one billion years, and the first cell came after one billion years.

And it looked exactly like the end stage in the box by that time because there was nothing there to collect, concentrate and structure values. So it was dispersed junk. And the first cell came about, which has made many cellular biologists deeply religious, some of them crazy, but most of them quit thinking about how it could evolve against the second law of thermodynamics.

We have very, very [? cheap ?] models to understand how it occurred. Anyway, it did. Some fuel cells to divide and concentrate and structure value with dispersed junk as building blocks, what happens after billions of years when that has gone on? The natural resources evolve and it becomes cleaner and cleaner between the natural resources, since dispersed junk is concentrated on structures.

So what is here? The poisonous sulfurous compound is here, a sulfur bridge between two amino acids in a cell. Meaningful instead of poisonous. Then comes the animal cells, the dinosaurs, or whatever, and you get the idea. Now comes man. And we have added value and we have added culture and knowledge and everything in a wonderful history, and also sometimes very sad, of course, and dramatic.

But it has been overall sustainable, at least to the extent that we are here today to talk to one another. And this makes it possible for us to draw a chart of sustainability, seen as a flow diagram of quality. And they understand that it is quality which we are reusing.

Again, you recognize how the sustainable IKEA or Electrolux or local government must integrate itself in the whole system where the cyclic processes build quality for them. They can't live hanging loose in the air like today's economy thinks. It must be integrated, living from the continuous import of quality.

And the business leaders understand at this point that they can't even consume water because the water molecules don't disappear. What is it they're consuming then, since matter can not disappear? Each molecule they drink leaves their body. What is it? It is the quality cleaners which is a potential difference between dirty water and clean water. And the water that leaves their body is dirty.

But the sun shines on it, the green cells make carrots and salad from it. And again, the water is clean. And they can see now that we don't consume matter or energy, we consume its quality.

And we must live from importing quantity, which was non-quality, was just to dispersed junk, but now it is wood and wool and cotton and all that. And whatever they are buying and purchasing, this company. And downstream, they have to emit on the atom as much junk back to nature. The atoms are still there, but the quality is consumed with less structure and exogeny and less information about it for nature to rebuild its quantity again.

We also recycle minerals. Based on this model, you can identify, again, actually, four system conditions for sustainability, which are non-negotiable, which are intellectual, intact, solid, and which are easy to understand. The first is that when Electrolux and the world and US or Sweden has moved into this new sustainable house, we have quit living from deposits in the Earth's crust.

Namely, the reason is that we can not mine more than it takes nature to deposit back into the Earth's crust. Because since everything spreads, in such case, we will drown in junk from the Earth's crust. So every gram of mercury that we mine will end up in a dispersed shape in nature sooner or later. Even if we recycle 95% of the batteries, 5% in each cycle goes out in nature.

And it will cause ever continuing increases of concentration overall in the box where we live. And they understand that and visualize that. It means that if they want to do something about that, it is not sufficient to buy a recycling device for metals, unless you link that to a decrease of mining. If you don't link it upstream to what was the intention of it, it is no help for nature.

But this is done all over. They buy those recycling things, but they don't audit it upstream to what was the intention of it. And they don't because they don't see this. They think that the cyclic society, and I tell you, in spite of all the articles you write and all that, they still believe that the cyclic society is something with return bottles, the technical side, as you know. And if you can't put your own enterprise in a box for return bottles, the cyclic principle is [INAUDIBLE], probably something which has got to do with somebody else. This is what they think.

The second system condition, which is as non-negotiable is that when we have moved into our new house, we have quit producing molecular garbage and visible garbage to a higher extent than nature can recycle it into new quality. And it means that by that time, we have quit, completely phased out all persistent unnatural compounds. PCB, DDT, dioxins, freons, all that.

And the third is, of course, linked with our next interrelationship to the living systems or to the environment. We can not harvest more from nature than nature can rebuild. We can't take out more fish, we can't take more forestry that is rebuilt. We can't put asphalt on those surfaces. And why can't we do that? Because they pay our bills.

So if we poison these systems with carbon dioxide, which is in this context molecular garbage, in spite of that, it is a building block for life because it is left over and steadily increased. If we continue to do also with sulfurous compounds, phosphates, heavy metals, freons, PCB, DDT, dioxins, anti-flammables, at the same time as we take away the productive surfaces physically that pay the bills for us, they can see how we are destroying the branch we are sitting on from several positions at the same time.

Now, the fourth system condition, of course, is then about this flow. Within those boundaries, one, two, three, we have to succeed in implementing an efficient and just economy in the whole box. And it is not efficient and just if 1 billion people starve from a medical point of view because they do, and 1 billion people have an overproduction of plastic [? ducts. ?]

This is not efficient and just metabolism of the resources within those boundaries. And they understand they would rather earn money from doing something good for people with as few resources as possible than doing bad things with a lot of resources and still feel that they are going to work and earn money from it. And that is no problem to explain this. They don't refuse at this point, either, surprising as this might be.

However, our present unsustainable society functions like this. We violate all those conditions, which leads to an ever increasing build up of garbage and molecular garbage. And there are 10 times more molecular garbage than visible garbage. And it stays in the same box.

And the molecular garbage now functions as-- what do you call it? [INAUDIBLE], what is that? Or dirt in a machine head. And the concentrations continue to increase. This is very easy to visualize for them because if you have a big bathtub and you take ink and you put one drop of ink in it, and after a while, you don't see it anymore.

And you ask the industrial leaders, do you think it has disappeared? And they know, no, no. You know, they want to show they really, really comprehend it hasn't disappeared. And then we tell them, if you do it all over again and the bathtub turns slight, light blue, would anyone be surprised? No, no, no, they wouldn't be surprised.

But they are before this lesson because polar bears feed their puppies with milk containing anti-flammables. And the whole society gets surprised, you know? But matter can not disappear. But it disperses. How could it be otherwise if we allow ourselves to produce those compounds?

Now, we started to say that we are intelligent as individuals. We can visualize this. Even males can see it all in the same time and draw conclusions from it. And you want to turn off the taps upstream instead of just doing things amongst the leaves.

But what do we do together? This is so simple for a single brain. But what do we do together? We send out scientists with male-ish blinders amongst the leaves, and the society asks them the same stupid question over and over again. Is the threshold for damage already exceeded for your molecules?

And the greenhouse specialists, the carbon dioxide specialists say, yes, some of them. The greenhouse effect is already here and the ice storms of Florida and the ever increasing amplitude of hurricanes tell us this. And the other scientists, no, no, no, no, no. We can still take much more carbon dioxide.

And then we ask the same question to cadmium specialists, have the threshold for kidney disease in people already happened? And some of them say, for instance, the people in Belgium, the scientists there say, yes. And the Swedish scientists say, no, no, no, it's probably something else. While it all is increasing since the cyclic principle does not work due to violation of the fourth principle.

If a single individual would be that dumb, it would be like a housewife named [NON-ENGLISH SPEECH]. [NON-ENGLISH] is a name for Sweden. And we call this housewife extremely silly housewife, [NON-ENGLISH] in this case. She comes home to a flooded kitchen. And there is not one tap on, but four taps. And therefore, the water cannot go in the cyclic system because it can't take the time, this overflooding. So it goes down, and goes down to the floor.

So her kitchen is flooded. What does she do in this situation? You know what you would do, all of you. You turn them off upstream. But she doesn't. She's too dumb. She stands like this. I wonder where the water will sneak out first, if it will be in the dining room or into the kid-- no, into the hall or into the kid's, children's. Because that depends on the function of the [INAUDIBLE].

The higher [INAUDIBLE], the longer it will stay in the kitchen, she figures. But then, provided that the joints of the [INAUDIBLE] keep the water in-- and now she starts to become hesitant about the function of those [INAUDIBLE]. So she phones up [INAUDIBLE] specialists and asks them while the water is still flashing down the water on the floor.

And she finds out that they quarrel about this. They fight about it. Some of them believe that they can take the water all the way up to the surface, and some of them say no, it will start leaking in the joints. So she get a little bit hesitant, and start to ask ecologists about the damage in other rooms-- that is, floor specialists. And they fight.

Now, she is so dumb at this point that she feels comfort that they don't agree upon that it is going to hell already in our house while the problem is increasing. But she doesn't have to ask scientists about everything. Because she is wet on her feet. And acidity causes action. [INAUDIBLE] is going up. It looks strange on the bottoms of your summer house, in comparison what it looked like when you were young and all that. You don't have to ask anyone.

So what does she do in this respect? She kneels down, take towels, and start to dry, without asking herself, then what? Because soon all towels are wet. These are all the waste deposits, garbage dumps, filter deposits, which just increase. And nobody ask why. I mean, when does an individual become smarter than that? Two, three years of age.

If you take an infant-- no, it's true. I mean, with regard to system perception. Put a young being of that age and throw a stone over its head so it hits the wall behind the kid. Before this age, we are completely drawn or recruited into the effects long down the cause effect chain.

So a child before that age, something is [INAUDIBLE] and go up there and see what it was. And you see the stone rolling there. But above that age, they look upstream. If it hit here, somebody must have thrown it in that direction. Where did it come from? And what was the purpose? Will the next stone hit me, and so forth.

Now we have all the scientists, you know. Oh, what about the seals? And now we have here-- the waters don't feel bad. But don't they feel better? While the problem is increasing behind our back. And if we started to function as a group, as intelligently as it is in your brains, the decision makers would shout to the scientists, how is it out there amongst the leaves? And they would answer back, like in your brains, it's hell out here.

Four system conditions upstream cause an ever steady increase of molecular garbage where we are, and they would answer, that sounds horrifying. So we will turn off the taps then. But there is a problem. Due to the economic system, we need to know what is most dangerous, so that we can do the right thing in the right moment. And they would answer, the worst thing is that we are fighting all the time about that.

And then the decision makers would be even more worried to turn off the taps. Because there is no security in the system. They are out of control. So what we do is that we train those good examples listening to us, those companies, to become good examples. And we coach them by helping them to merge ecology and economies.

And we do it by helping them to apply the four system conditions in a checklist for whatever they do. All measures must be checked upstream to the very source of the problem. How else could they reach this level? And meanwhile, we help them to become strong from it. Because if the good guys continuously invest in sound business and become poor from it, because they do the wrong move in the wrong moment, we will systematically cause the good guys to become poor and the bad guys to become stronger economically.

And therefore, we must coach them together with economies for the environment, of course, comprehending the same concept to do the savings, to see the investments, which will pay off soon, in order to be able to do the long term investments along the line while they're failing in the [? crosses ?] on this chart. And we help them to improve their image as well by handing over prices in Swedish TV with the king and all that jazz. You can see how it functions.

And then we put ecology and economy together in exactly the same chart, so that the business leader out there, when he does his short term measures, see to that they don't violate his possibility to reach a full integration in those four system conditions.

Now, I would just like to-- yes, 40 minutes in 2 minutes. I'm just going to repeat what I've said, and then we have an open discussion. Because I would like to repeat it so you have the whole image of the whole lesson on one single chart.

Major functions like would be a quality machine, we tell them, where the green cell is the primary production unit, and the animal cell consumes the exogeny quality. But it is repossessed back into a new quantity. And this part of the diagram is sound driven. Integrated in this is the progressive business leaders, business or enterprise in a few years, living from a continuous import or quality from nature, and export back of known quantity. And he tries to save quality by recycling as much as possible. But a lot of other things along those lines of the four system conditions.

But we do not only recycle what we get from nature. We recycle minerals from the Earth's crust as well. And when we have moved into our new house, we can allow ourselves to do that a lot. But we must be extremely cautious so that we don't let too much rust away of metals and other things from the earth's crust because the redeposit is so slow. However, we can balance that flow. We can take-- also here, we can mine as much as can be redeposited, which is virtually almost zero in comparison to what we're doing today. And that was system condition number one.

Two was that we must not emit persistent unnatural compounds. Three, we must not systematically violate the physical conditions-- not only the chemical ones, but the physical conditions-- for the system which pays the bill for us. And within these boundaries, we must succeed to implement an ever increasing efficiency in a just economy and relate the efficiency to true human needs, which includes the rest of the nature. And they get the idea of this point.

We don't do that. We violate them all. And therefore, we must undertake measures to change that. And I will finish off by just giving you one example how it functions, one concrete model.

I overheard an economist and an ecologist at the local authority both having had this exercise for three days with an interval for book studies in between. And they appeared as an intelligent team, using the same solid structure when they talked to one another. And this is how it sounded like. This is also part of my new book now coming in September. This is one of the examples.

The ecologist. We have started to design a new-- what do you call those heating devices, heating plants?-- for a local authority, a distant heating plant where you can provide heat to the houses.

AUDIENCE: [INAUDIBLE].

ROBERT: What do you call it?

AUDIENCE: Energy plant.

ROBERT: Energy plant.

AUDIENCE: Just a heating plant.

ROBERT: A heating plant.

AUDIENCE: Distant heating plant.

ROBERT: Distant heating plant.

AUDIENCE: --in America.

ROBERT: Oh, I see. But we can increase efficiency tremendously by using them. And you can use biofuel or whatever. But you just see how it sounds. We have started a project, such a thing, being run on nature gas, the ecologist say. And the economist say-- which they always do-- why? And he looked skeptical. And I got a little bit afraid. God, hasn't he understood anything?

But he says the following. Doesn't nature gas come from the Earth's crust? Doesn't that violate system condition number one? Is there any future in it? And the ecologist say, yeah, yeah, we have thought about that. So already at the planning stage, we are going to build it today, making it possible to convert it to biofuel later on, he says. So it's just one of the crosses along this line, which is exactly how you should use it.

But the economist goes on and say, why couldn't you skip the nature gas and go directly to biofuel? And the ecologist say, well you economists always get so damned annoyed when we suggest that, because the prices for biofuel is much higher than nature gas in Sweden today. And the economist say, for how long, considering this?

Because this is like a funnel. Mankind is running into a funnel where the walls are the system conditions. The prices will not be like that. How much does it cost to convert in relation to build it right from the beginning, run it with a high [? pressure. ?] Please don't do anything. I must count on it before. And then the environmental movement can go home and take a beer or whatever.

Because now intelligent people in their fields of expertise talk over the same system conditions. And this was exactly what we intended. And I have several such dialogues. And I have sent it over to them for acceptance. And they say, yeah, this is what happens. So it is a book about the good examples coming out using this [INAUDIBLE]. And that's all.

So now open for dialogue. We have another 20 minutes.

AUDIENCE: We could do, or we could have Paul speak and then--

ROBERT: Oh, is that what you wanted? I would prefer to take it directly because I would like to ask Paul also. And maybe we could-- if we only have a quarter then, we could have a joint thing together. Isn't that OK, Paul?

HAWKENS: [INAUDIBLE]

ROBERT: This is how I got [INAUDIBLE]. Sorry?

AUDIENCE: Just showing the slide with the four conditions [INAUDIBLE].

ROBERT: This is not how they are defined. This is an interpretation of the four system conditions to any entrepreneur or company in a checklist. But the first one is low enough concentrations of compounds from the Earth's crust. This is an absolute non-negotiable rule for nature. The second is low enough concentrations of persistent unnatural compounds. The third is maintained productivity and diversity of nature. And the fourth is just an efficient economy or metabolism or resources. Energy and all other resources.

And this is how they can check themselves to fulfillment of integration and the cycles of nature. However, if you recall, the index systems, the life cycle analysis, are stuffed with what is allogeneic, toxic, [INAUDIBLE] accumulative, and whatever, which is only an index system of trying to figure out today's impact in the system. But it doesn't give you any security whatsoever in the changing process. So you're not in control if you live from lifecycle analysis.

However, if you combine lifecycle analysis and such monitor systems with this, it is good. And this is one of the advantages with it. It is solid intellectually. You can audit yourself mathematically towards fulfillment of the four system conditions, which we do together with scientists for the environment. And it is easy and attractive to learn. It is easy to understand. So the leader of the company is not completely had to rely on specialists with a language he doesn't understand. The whole company understand the same thing and talk about it.

Secondly, you have a time axis here, which makes you dare look on how tough it will be. Because there is so much to do. And without the time axis, people say that you are a fundamentalist, an ayatollah, an idiot. But if you introduce the time axis, you dare to look at the goal. And if you don't dare to look at the goal, how can you ever reach it?

Finally, you put in your measures here, and you will profit from it immediately, not only when we have reached the goal. Because what happens here is non-negotiable. It is the funnel. And the ones who do this systematically already make very good profit from it, if they do the right thing and the right move.

It's also a wonderful way of communicating to your customers. Do you remember that we promised to do this? Look, here we have done it. Now we are doing this. Next year we are going to do this.

And some of these companies use it directly as a marketing device. This is all we are going to do. We are going to integrate the whole business into the cycles of nature. This is what we have already done. This is what we are doing. And then people feel, those we want to support. Because no one is so dumb that he thinks that it can be done with one leap overnight.

AUDIENCE: I'm interested in the [INAUDIBLE]

ROBERT: Yes.

AUDIENCE: Do you find how these and public sector organizations really publishing, disclosing their progress and their goals in annual reports [INAUDIBLE] compensation-- does it really enter the organizational structure?

ROBERT: Yes, they are doing that. But so far, the last report has been on traditional lifecycle analysis and such monitoring. But that is now more and more abandoned by the companies we are working with. They are now using this for auditing. So I hope that they will start publishing that too. But it's too early. It would be next year, the first chance of that. Swedish McDonald's, IKEA, Electrolux, those companies. 20 of those.

AUDIENCE: I wonder if you'd give us some examples of how the third and fourth prinicples of life [INAUDIBLE].

ROBERT: Yeah, okay. ICA is the biggest-- I mean, playing down, the first example was local authority. This is ICA. This is the largest supermarket chain in Sweden. They run into the funnel just recently, hit the wall, boom. And this is much more expensive in comparison with investing yourself into adaptation of the funnel. But they hit the wall, boom.

How did it appear? [INAUDIBLE] were stuffed into their refrigerators, and customers started to ask questions about it. And there was a meeting in Copenhagen, as you recall, a couple of years ago, where we wondered if it was too late to phase it out. And [INAUDIBLE] has decided to have a deadline for production. And they felt the funnel coming for this particular compound.

So they phoned up Electrolux and said, we would like to buy some other kind of stuff to put in our refrigerators. And Electrolux said, we're sorry, but your device is married to hard fuels. How much will it cost them? Well, how many refrigerators do you have in your shops? And they got the number, and they calculated. Well, it's 1 billion Swedish kronas.

You know, it's completely merciless when you hit the wall. There is no Security Council there to take the bump for you, if you plan against the laws of nature. Because they are on top of all man made rules, you know. And they hit you one way or another, legislature, whatever. But this is how it looked to them.

So they said to Electrolux, what is it you suggest that we buy then? Well, this device is based on soft fuels, they said, happily. And the chairman of ICA said, does that violate system condition number two? And Electrolux said, system what? Because they hadn't got that education by that time. But they soon got it. I'll tell you the story.

ICA said, we would not like to make that affair on this point. We must have a seminar together with not just [INAUDIBLE] when we make the affair. So they did. And I did this. But when you have reached this point, never ever tell the specialists amongst their leaves how to handle the problem. Just give them the compounds. So I said the word is free. And the chairman stood on his feet and said to Electrolux, could you now please answer the question, if soft fuels, which you want us to buy, violate system condition number two or not?