“Does capitalism need saving from itself?” asked a late-2019 Financial Times headline to a column by Editorial Board Chair Gillian Tett.[1] This sentiment encapsulates the zeitgeist of our time – when even the staunchest of pro-capitalist institutions question whether capitalism is a dying paradigm, in need of replacement with a new paradigm better suited to meet the challenges of our epoch (having shifted from the Holocene to the Anthropocene.)[2]

Indeed, in the face of a climate emergency burning continents[3] and threatening to hurtle us into a “hothouse earth,”[4] a species extinction rate a thousand-fold higher than the background rate,[5] a global pandemic,[6]rising global economic inequality that “can lead to various sorts of political, economic, and social catastrophes,”[7] and a host of other systemic dysfunctions, even mainstream capitalists increasingly embrace the idea that capitalism needs transformation.[8] Many believe that capitalism, as currently practiced, is the root cause of humanity’s predicament – which extends as far as the existential risk of civilization collapses and even possible extinction.[9] At the same time, if the constructive elements of capitalism can be configured properly, its power to operate at the proper pace, scale, and scope shows promise to serve as a savior. 

“As currently practiced” is the key variable. In current practice, capitalism focuses monolithically on financial growth, hewing to the questionable assumption that this is the most efficient engine of progress. As this suggests, the shortcomings of what we might call Monocapitalism are essentially two-fold: 

  • its limited purview of financial capital alone; and
  • its fixation on economic growth, and the concomitant concentration of financial capital.

This second point encompasses a subsidiary aspect – namely, financial capital concentration is often achieved through enclosure (or privatization) of the Commons. Nobel Laureate Elinor Ostrom defined the Commons more precisely as “common pool resources” – namely, the vital capital resources that exist in the world that we share for the common good, in order to meet the needs of all.[10] While Monocapitalism is predicated on private ownership, Multicapitalism[11] is not thus burdened, as it recognizes that many of the capitals can be categorized as Common Capitals,[12] and thus require an economic doctrine predicated not only on private ownership but also on collective and cooperative stewardship that transcends the notion of ownership.

While common consciousness conflates capital with cash, the term applies more broadly, as we can see by tracing back to its origins. Double-entry bookkeeping, which dates back to Roman and Egyptian antiquity, was first codified in Franciscan friar Luca Pacioli’s 1494 treatise, Summa de arithmetica, geometria, proportioni et proportionalità.[13] In Jan Ympyn Christoffels’ first English translation of this seminal text a half-century later, he proposed that the term “capital” could be considered synonymous with “stock”: 

The other worde, the Italians call the Capitall, that is to saie, the Stocke or principall that the Marchant began with all…. And it is at your pleasure whether ye will use this worde Stocke in Englishe, or Capitale. [14]

This etymology has important implications, as the term “stock” carries very broad denotations and connotations, stemming from the Old English notion of the “trunk” (of a tree) and developed in late Middle English from the notion of “growth from a central stem.”[15] The fundamental point is that the term “capital” has never carried a singular, exclusively financial denotation, but has always carried much wider application associated with the “firm foundation” of “stock” from which growth flows.

This “stocks” and “flows” notion of “capital,” which serves as a foundation of Multicapitalism (as we will explore in more depth in later chapters), was enshrined in the pioneering 1906 work of Irving Fisher, The Nature of Capital and Income. Here, he defined capital as a 

stock of wealth existing at any instant of time.[16]

Fisher paired this concept directly with his definition of income as a 

flow of services through a period of time.[17]

Note that common consciousness often conflates “wealth” with financial wherewithal, but the term is by no means limited to this lens. The Oxford dictionary defines wealth as “abundance of valuable possessions” and even “plentiful supplies of a particular resource,” and traces its etymological roots back to “well-being,” from “weal” or the “pattern of health.”[18] This last connection is vitally important, as we shall shortly see.

In 1949, economist Kenneth Boulding diversified the definition of capital beyond finance quite explicitly, naming four types of non-financial capital: human capital, cultural capital, intellectual capital, and geological capital (a subset of what we now call natural capital).[19] Several key figures advanced this multiple capital definition, including Paul Ekins (1992),[20] John Elkington (1997),[21] and Donella Meadows (1998).[22] In 2005, in his book Capitalism as if the World Mattered, Jonathon Porritt proposed a “five capitals framework,” consisting of natural, human, social, manufactured, and financial capitals.[23] Forum for the Future, the not-for-profit sustainability think tank he founded in 1996, popularized this framework through a graphical meme that represents financial and manufactured capitals nested within social and human capital, which are all nested within natural capital.[24] (See Figure 1 below.) 

Figure 1: The Five Capitals[25]

In his book, Porritt defined “capital” as 

a stock of anything that has the capacity to generate a flow of benefits which are valued by humans.[26]

In their 2012 book Corporate Sustainability Management, Mark McElroy and Jo van Engelen distill all of these definitions to their essence:

Vital capital is a stock of anything that yields a flow of valuable goods or services important to human well-being.[27]

Importantly, they tied the term back to the roots of vitality and health (established a Century earlier by Fisher). By commencing the definition with the term “vital” and ending with the notion of “well-being,” McElroy and van Engelen stress that these capital resources are not mere trifles for idle consideration, but rather necessary for humanity’s sustenance and welfare.  

Clearly, financial capital fits this definition, but not exclusively – natural, social, human, manufactured, and intellectual capital fit this definition just as clearly. And this exposes the first shortcoming of Monocapitalism: its singular focus on the lone capital of finance. This is an arbitrary boundary that excludes diverse forms of value that are inextricably embedded in the value creation process, which capitalism is supposed to advance. In this sense, Monocapitalism fails to live up to the richness embedded in the much broader cornucopia of capitals.

Similarly, the assumption that economic growth leads inexorably to progress warrants examination. Take, for example, the 2018 Nobel Prize in Economics awarded to Yale Professor William Nordhaus for addressing “the question of how we can achieve sustained and sustainable global economic growth” in his four-decade career on the economics of climate change.[28] His Dynamic Integrated model of Climate and the Economy (DICE) model, which “views climate change in the framework of economic growth theory,” pivots on the question of time discount rates, asking if it’s wiser to spend now, or later, to combat climate change.[29]

His answer? Later. 

In his Nobel lecture, he presents an “optimal” scenario that employs a discount rate of about 3 percent, which would stabilize global temperature at about 3.5 degrees Celsius above pre-Industrial levels (or 3.5°C) to achieve the “ideal” balance of economic impacts against climate change impacts (see Figure 2).[30]

Figure 2: “Optimal” Warming[31] [emphasis added]

Global scientific[32] and political[33] consensus consider 1.5C to be the “safe limit” of global temperature rise, with an outer limit of 2C, suggesting a radically different interpretation of the term “optimal” from that of Prof. Nordhaus.[34]

Interestingly, Sir Nicolas Stern, who at the behest of the UK Treasury Department authored the 2006 Stern Review of the Economics of Climate Change – widely considered the most comprehensive review of the economics of climate change – did not receive a Nobel Prize.[35] Lord Stern proposed a discount rate of 0.1 percent, “implying almost equal weight to all generations,” according to Berkeley Economist Hal Varian in a New York Times comparison of the Stern and Nordhaus approaches.[36]

By contrast, in Nordhaus’ model, “the welfare of future generations is given less weight than the current generation’s welfare […] given that future generations will be much richer than those now living,” Prof. Varian explains. The “fact” that future generations will necessarily be richer than current generations is taken as axiomatic – the notion that future generations might not be richer is not a possibility considered by economic growth theory. 

In this sense, Prof. Nordhaus’ 3 percent discount rate (tied to an “optimal” 3.5°C scenario) amounts to systemic infanticide: locking in catastrophic climate change in the present, on the presumption of future economic growth that would ostensibly better “afford” the cleanup costs, essentially guarantees mass mortality for future generations (given that climate change is already causing thousands of premature deaths at its present level of severity).[37] When individuals postpone solving their own problems, assuming they can better afford to do so in an undetermined future, we call them irrational; when global leaders advocate such decisions that seal the fate of untold numbers of our descendants, the more appropriate term is intergenerational genocide.

Perhaps the fatal flaw is not capitalism per se, but rather its current practice – its monolithic focus on financial growth. In other words, perhaps the problem is Monocapitalism. And following the next logical step, perhaps the solution is Multicapitalism. These two terms were coined in 2014 by Mark McElroy and Martin Thomas, drawing on the long history of capital theory.[38] With subsequent refinements, the terms are defined as follows:

  • Monocapitalism: capitalism designed to grow and concentrate one form of vital capital – financial capital – very often at the expense of the ongoing viability of other capitals;
  • Multicapitalism: capitalism designed to maintain the carrying capacities of all vital capitals (natural, human, social, intellectual, constructed, and financial) respecting normative thresholds.[39]

From a common-sense perspective, the case for Multicapitalism is self-evident: it is a comprehensive and holistic doctrine that mirrors the dynamics of complex self-regulating living systems. In other words, Multicapitalism aligns and integrates with material reality, as it is most accurately understood as of now. This distinguishes Multicapitalism from Monocapitalism, in that the latter is a partial and exclusionary economic doctrine, predicated on the assumption of perpetual growth that is found nowhere in nature.

The best way to better understand the case for Multicapitalism is to explore its conceptual foundations. In a 2015 journal article, concept originators Mark McElroy and Martin Thomas (a former Unilever finance executive) lay out the ontology of Multicapitalism as comprising:  

(1) stocks and flows of vital capitals in the world;

(2) organizations and their impacts on the capitals;

(3) other parties (i.e. stakeholders) whose well-being depends on the capitals; and

(4) norms, standards or thresholds for what organizations’ impacts on the capitals must be, or not be, to be sufficient, sustainable and duly supportive of stakeholder well-being.[40]

The first and third elements have already been discussed earlier, and the second element is self-explanatory: organizations make use of the multiple capitals in their business models, and thus have impacts upon them, both negative (degenerative) and positive (regenerative).

The fourth element is what truly distinguishes Multicapitalism, which acknowledges real-world limits and thus the need for normative measures to guide operation within those limits. Such limits tend to be invisible when systems are operating well within them; they start to make themselves known when we begin to transgress limits. 

For example, it wasn’t until we began exhausting our forests that we conceived of the need to preserve them. The modern concept of “sustainability” can be traced back to 1713, when the Saxon mining minister Hans Carl von Carlowitz introduced the term (“Nachhaltende” in German) in his book Sylvicultura Oeconomica, which addressed Saxony’s over-harvesting of timber that devastated its silver mining and metallurgy industries.

Therefore, the highest level of art, science, industry, and institutions in this country will have to make every effort to achieve conservation and cultivation of wood for continuous and sustained utilization, because it is an indispensable matter, without which a country cannot continue in its esse.[41]  

Fast forward two-and-a-half centuries, and these localized limit-breaches began to make themselves known at the global level. At about the same time that humanity began to overshoot our Ecological Footprint (circa 1970 – see Figure 3 below), Donella Meadows and her colleagues published Limits to Growth, the first computer simulation (World3) of vital resource trajectories globally that raised alarm bells on depletion trends leading to carrying capacity “overshoot and collapse.”[42] (see Figure 4)

Figure 3: Ecological Footprint: Earth Overshoot[43] [emphasis added]

Figure 4: Carrying Capacity and World Model Standard Run[44]

Fast forward three decades, to 2002 when the Global Reporting Initiative (GRI) enshrined limits in its Second Generation of Sustainability Reporting Guidelines. There, it introduced the Sustainability Context Principle,which holds that

sustainability reporting draws significant meaning from the larger context of how performance at the organisational level affects economic, environmental, and social capital formation and depletion at a local, regional, or global level… reporting organisations should consider their individual performance in the … context of the limits and demands placed on economic, environmental, or social resources at a macro-level.[45] [emphasis added]

Drawing inspiration from both Meadows’ Limits to Growth and GRI’s Sustainability Context Principle, McElroy established a generalized working definition of carrying capacity, linking it explicitly to all vital capitals – not just natural capital, but also anthropogenic (or “anthro”) capitals, such as human capital and social capital):

Stocks of capital have carrying capacities, the dimensions of which are determined by the size and content of their flows. When the scale of human demands placed on such capitals exceeds the dimensions of their flows, we can say that the impact of human activity has exceeded the carrying capacities of the capitals involved. Or we could say that the carrying capacity of the capitals involved is insufficient to accommodate or support the impacts of human activities. Either way, we have a mismatch between the demand for flows and the available supply. This, in so many words, is one way of defining a state of unsustainability.[46]

In the case of flows available from natural capital, humans are more or less stuck with their size and type. We can certainly leverage technology to wring increasingly more and more out of the same capital stock over time – and indeed we have – but the one thing we cannot do is create more natural capital than is already here on Earth. Nor can we recover or recycle energy already spent. Both of these principles are fairly well ensconced in the first and second laws of thermodynamics, respectively.

Anthro capital, on the other hand, has the distinctive feature of being human-made. Within reasonable (and far reaching) limits, we can always make more of it if we choose to. For example, we can invest in and cultivate, individual knowledge, skills, and capabilities (human capital); or we can do the same for collective knowledge and capabilities (social capital)… Indeed, to the extent that deficiencies in human well-being can be attributed to shortages in the supply of anthro capital, we not only have the ability to take compensatory steps, we very much ought to. Unlike natural capital, of which we have only limited supplies, we can always increase the carrying capacity of anthro capital given the will to do so. In this thesis, we take the position that that is exactly what humanity ought to do when faced with shortages, and that the persistent failure to do so is unsustainable – socially unsustainable, that is. Here we rely on a principle of well-being: that well-being is not only desirable, but that the absence of well-being can lead to other equally undesirable outcomes, such as civil strife, violent conflict, and political instability.[47]

In his dual application of carrying capacity to the two primary categories of capitals (natural capital on the one hand, and anthro capitals on the other), McElroy identifies their countervailing dynamics. The finite nature of natural capital stocks sets an inherent constraint on their flows to dictate their sustainability, while the need to continually regenerate anthro capital stocks creates a sustainability imperative to “take compensatory steps” when we encounter “shortages in the supply.” In other words, the carrying capacities of natural capitals set “do-not-overshoot” thresholds, while the carrying capacities of anthro capitals set “do-not-undershoot” thresholds. 

This general idea had been introduced (though not in the explicit context of carrying capacities) in 1974 by Barbara Ward in a United Nations “declaration” calling for “a new system more capable of meeting the ‘inner limits’ of basic human needs for all the world’s people and of doing so without violating the ‘outer limits’ of the planet’s resources and environment.”[48] About four decades later – almost a half-decade after McElroy’s dual-dynamic carrying capacities of the capitals – Oxfam Senior Researcher Kate Raworth similarly built upon Barbara Ward’s concept, crystallizing it into a graphical representation that rapidly caught on as a viral meme. 

The idea for the doughnut was borne of the graphical representation of the Planetary Boundaries, a set of nine “upper” ecological thresholds delineating a “safe operating space for humanity,” beyond which tipping points could throw these systems out of whack, with catastrophic consequences.[49] The research team, anchored at the Stockholm Resilience Centre, combined ecological economics, sustainability science, and resilience research to ascertain that humanity’s impacts in the Anthropocene had already transgressed three of the nine “outer” thresholds (climate change, biodiversity loss, and the nitrogen cycle) as of 2009 (an updated study published in 2015 added another threshold crossing, for land-use change[50]). (See Figure 5 below)

Figure 5: The Planetary Boundaries[51]

Looking at the above Planetary Boundaries graphic depicting the crossing of “ecological ceilings” (or “critical natural thresholds” of maximum ecological impact before risking systemic breakdowns), Raworth recognized the need to paint a fuller picture, with the “inner” social limits (or “social foundations” necessary for the stability of social systems to avoid “critical human deprivations”) also represented. So, she overlaid these baseline social thresholds onto the graphic, and voilà, the result was the meme-ready “doughnut” (“or, if you prefer, a tyre, a bagel, or a life saver,” she cheekily added) bounding the “safe and just space for humanity.”[52] (See Figure 6 below)

Figure 6: The Doughnut[53]

Just as McElroy defined “unsustainability” as exceeding the thresholds of natural capital carrying capacities and undershooting the thresholds of anthro capital carrying capacities, so too did Raworth identify the “overshoot” of “ecological ceilings” and the “shortfall” of “social foundations” as carrying humanity beyond its “safe and just operating space.”

McElroy took the next step of introducing a generalized equation – the Sustainability Quotient – for quantifying sustainability limits and thresholds. According to the Quotient, Sustainability (S) equals Actual Impacts (A) over Normative Impacts (N) on the Carrying Capacities of Capitals.[54] (see Figure 7)

Figure 7: The Sustainability Quotient[55]

In essence, the Sustainability Quotient encapsulates the world as-it-is (actual impacts in the numerator) compared to the world as-it-should-be (normative impacts in the denominator). The goal is for the world to beas it should be – namely, sustainable. The Sustainability Quotient enables us to discern if performance is as it should be (i.e. sustainable) – or not, in which case corrective measures are in order.

Multicapitalism applies the carrying capacities of the capitals as a “corrective measure” to the practices of Monocapitalism, which creates financial value by draining value from other capitals in a process that is creating net-sum unsustainability, as ample evidence cited above suggests. This raises the question of whether it is possible to create value in a way that is sustainable for all the multiple capitals.

In its 2013 International Integrated Reporting Framework, the International Integrate Reporting Council (IIRC) introduced a graphic conceptualization of how the multiple capitals contribute to value creation (and diminution). The graphic maps how business models transform the multiple capitals from inputs to outputs that produce outcomes, resulting in value creation (and diminution) over time.[56] (see Figure 8)

Figure 8: The “Octopus”[57]

Subsequent work has extended this flowchart in useful ways. Work by the German chemical company BASF expanded from “outcomes” to “impacts,” a step that essentially introduces the question of attribution: “how much of the outcome would not have happened otherwise” (i.e. without the contribution of the organization in question). BASF also introduced a next step of “Value-to-Society” – in other words, what are the costs and benefits of these impacts to society at-large?[58] (See Figure 9)

Figure 9: Value-to-Society[59]

This approach has gained significant traction in the field. The Impact Valuation Roundtable (BASF plus a dozen other big companies, collaborating under the umbrella of the World Business Council for Sustainable Development) embraced the BASF Value-to-Society approach. (See Figure 10) The naming of the roundtable spotlights the fact that the approach applies a “valuation” approach, employing monetization to express the impacts in terms that are both “fungible” and readily understood by market actors. 

Figure 10: Impact Valuation[60]

How does one place a valuation on impacts? For its part, BASF measures all its impacts (positive and negative), and puts a price on them (i.e. “monetizes” or “valuates” them) in order to be able to compare them in common terms.[61] (See Figure 11)

Figure 11: BASF Value-to-Society Results 2013-2017[62]

Note that all of BASF’s social and economic impacts are positive, whereas all its environmental impacts are negative. The Value-to-Society approach then “nets out” the impacts, enabling the company to claim that the positive social and economic impacts can offset (or “off-net”) negative ecological impacts. (See Figure 12)

Figure 12: Balancing Positive and Negative Impacts[63]

In technical terms, BASF’s Value-to-Society methodology applies a “weak sustainability” approach that allows off-setting impacts on capitals (for example, degenerating natural capital to generate manufactured and social capital), instead of a “strong sustainability” approach that holds incommensurability and hence non-substitutability between capitals (natural capital cannot be “replaced” by social capital), and so precludes such capital offsetting.[64]

Despite this fundamental flaw, the Impact Valuation approach was sufficiently successful to enable its primary architect, Christian Heller of BASF, to spin it off into an independent initiative called the Value Balancing Alliance, which “aims to create a standardized model for measuring and disclosing the environmental, human, social and financial value companies provide to society.”[65] Heller explained the overall value of this kind of approach thus:

Moving from the traditional shareholder value concept to a “system value” approach, we truly value the impacts and interdependencies of society and business in a comprehensive system. This system serves as our foundation for shaping the future.[66]

This use of the term “system value” differs significantly from its origins. The concept was coined by Future-Fit Foundation Co-Founder and CEO Geoff Kendall, defining it broadly on the continuum from Shareholder Value (which prioritizes financial returns to shareholders) through Shared Value (which prioritizes financial gain that promotes social good, without accounting for social harm) to Systems Value (which views value holistically, aligning business value with social and ecological value).[67]  (See Figure 13)

Figure 13: System Value[68]

The Future-Fit Foundation promulgates the Future Fit Business Benchmark, a framework that calls for companies to reach “a set of environmental and social thresholds that constitute the extra-financial break-even point for value creation, across the Triple Bottom Line.” As suggested in the graphic, this falls within a “Requirement for Society” that constitutes “System Conditions defining the thresholds within which society must operate to protect the possibility of a flourishing future.”[69]

In other words, creating System Value requires operating (at the micro / company level and the macro / systems levels) within ecological, social, and economic thresholds. System Value is therefore explicitly distinct from Impact Valuation, which operates without any reference to ecological, social, and economic thresholds. 

In the real world, human benefit does not erase adverse environmental impact; quite the opposite: human thriving often comes at the cost of the environment, so true thriving must be redefined to align with vibrant environmental viability. Viewed through this lens, unabated environmental erosion (as is evidenced by the five-year results from BASF) eats away the future foundation that social benefit is built upon, undermining the system.

Creating System Value thus requires that systems thrive in healthy cycles of resource regeneration. Well-functioning systems create value from sufficiently abundant capital stocks to generate ongoing resource flows. So, System Value creation – a core tenet of Multicapitalism – requires cycling resources in ways that respect their carrying capacities.

Returning to where we began, Monocapitalism and Multicapitalism represent competing paradigms, in the sense of the term established by Thomas Kuhn in his seminal 1962 book, The Structure of Scientific Revolutions. In it, he stated that the “significance of crises is the indication they provide that an occasion for retooling has arrived.”[70] Humanity is now navigating multiple intertwining crises, providing an occasion for “retooling” the current Monocapitalist paradigm, which is thus ripe for being transcended by a new Multicapitalist paradigm.

This is precisely the point made by Limits to Growth Co-Author Dana Meadows in her influential 1999 essay, Leverage Points: Places to Intervene in a System. She places paradigms atop her list of twelve such leverage points: the mindset or paradigm out of which the system … arises.[71]

Whole societies … resist challenges to their paradigm harder than they resist anything else. So how do you change paradigms? In a nutshell, you keep pointing at the anomalies and failures in the old paradigm, you keep coming yourself, and loudly and with assurance from the new one, you insert people with the new paradigm in places of public visibility and power. You don’t waste time with reactionaries; rather you work with active change agents and with the vast middle ground of people who are open-minded.[72]

We believe that the paradigm shift from Monocapitalism to Multicapitalism is necessary, inevitable, and already well underway. We further believe, as we have laid out in this article, that the existing Monocapitalismparadigm is fatally flawed, and that the emerging paradigm of Multicapitalism not only resolves these fatal flaws, but also opens the door to creating sustainable, regenerative, and thriveable mindsets, business models, and economic systems that show significant promise of “saving capitalism from itself.” 

[1] Gillian Tett, “Does capitalism need saving from itself?” Financial Times, 6 September 2019. https://www.ft.com/content/b35342fe-cda4-11e9-99a4-b5ded7a7fe3f

[2] Colin Waters, Jan Zalasiewicz, Colin Summerhayes, et al, “The Anthropocene is functionally and stratigraphically distinct from the Holocene,” Science, Vol. 351, Issue 6269, 8 January 2016. https://science.sciencemag.org/content/351/6269/aad2622

[3] Amy Gunia and Andrew Katz, “Australia Is Burning: Scenes From a Deadly Season of Bushfires,” Time, 7 January 2020. https://time.com/longform/australia-bushfires-photos/

[4] Will Steffen, Johan Rockström,  Katherine Richardson, et al, “Trajectories of the Earth System in the Anthropocene,” Proceedings of the National Academy of Sciences, 115 (33) 8252-8259; August 6, 2018. https://www.pnas.org/content/115/33/8252

[5] Jurriaan M. De Vos  Lucas N. Joppa  John L. Gittleman  Patrick R. Stephens  Stuart L. Pimm, “Estimating the normal background rate of species extinction,” Conservation Biology, Volume 29, Issue 2, pp 452-462, 26 August 2014. https://conbio.onlinelibrary.wiley.com/doi/abs/10.1111/cobi.12380

[6] WHO Director-General’s opening remarks at the media briefing on COVID-19, 11 March 2020. https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—11-march-2020

[7] Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, World Inequality Report 2018, World Inequality Lab, 2018. https://wir2018.wid.world/files/download/wir2018-full-report-english.pdf

[8] See, for example: Ray Dalio, “Why and How Capitalism Needs to Be Reformed (Parts 1 & 2),” LinkedIn, 5 April 2019. https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-1-2-ray-dalio/

[9] David Spratt & Ian Dunlop, What Lies Beneath: The Understatement of Existential Climate Risk, Breakthrough (The National Centre for Climate Restoration), 2018. https://www.breakthroughonline.org.au/whatliesbeneath; Luke Kemp, “Are we on the road to civilisation collapse?” BBC Future, 18 February 2019. https://www.bbc.com/future/article/20190218-are-we-on-the-road-to-civilisation-collapse; Jem Bendell, Deep Adaptation: A Map for Navigating Climate Tragedy, Institute of Leadership and Sustainability (IFLAS) Occasional Paper 2, University of Cumbria, 27 July 2018. http://insight.cumbria.ac.uk/id/eprint/4166/1/Bendell_DeepAdaptation.pdf (“Currently, I have chosen to interpret the information as indicating inevitable collapse, probable catastrophe and possible extinction,” writes Prof. Bendell in Deep Adaptation.

[10] Elinor Ostrom, Managing the Commons, The Evolution of Institutions for Collective Action. Cambridge University Press, 1990.

[11] Mark McElroy, “Sustainability and Multicapitalism — Together at Last!” Sustainable Brands, 10 April 2014. https://sustainablebrands.com/read/defining-the-next-economy/sustainability-and-multicapitalism-together-at-last; Mark McElroy, Great Transition Inititive listserve, August 2016. On P2P Foundation Wiki Page https://wiki.p2pfoundation.net/Multicapitalism; the version of these definitions included in this article are the result of further refinements resulting from discussions between McElroy and the author.

[12] Sustainability Accounting Standards Board (SASB), Conceptual Framework of the Sustainability Accounting Standards Board, October 2013, p18. https://www.sasb.org/wp-content/uploads/2013/10/SASB-Conceptual-Framework-Final-Formatted-10-22-13.pdf; Sustainability Context Group, Public Comment to the Sustainability Accounting Standards Board re: its Conceptual Framework Exposure Draft, 26 July 2013. https://www.r3-0.org/wp-content/uploads/2020/03/SCG_SASB_Comment.pdf

[13] Jane Gleeson-White, Double Entry: How the Merchants of Venice Created Modern Finance, W. W. Norton, 2012. “The records of the most important account book of the Roman businessman (the tabulae rationum) were divided into two pages. The Roman naturalist Pliney the elder was much taken with this division, which meant that the two sides comprise the whole. In 70 A.D., he wrote: ‘on one page all the disbursements are entered, on the other page all the receipts; both pages constitute a whole for each operation of every man.’” (p 294)

[14] Jan Ympyn Christoffels, A Notable and very excellente woorke expressyng and declaryng the maner and forme how to kepe a boke of accoptes or reconynges, verie expendiente and necessary to all Marchantes, Receivers, Auditors, Notaries, and all other, 1547. https://books.google.com/books/about/A_Notable_and_very_excellente_woorke_exp.html?id=-HFhPgAACAAJ

[15] “Stock,” Lexico / Oxford Dictionaryhttps://www.lexico.com/en/definition/stock  

[16] Irving Fisher, The Nature of Capital and Income, 1906, p 52. https://play.google.com/books/reader?id=1PVKAAAAYAAJ&hl=en&pg=GBS.PA52Via Mark McElroy & Jo van Engelen, Corporate Sustainability Management: The Art and Science of Managing Non-Financial Performance, Earthscan, 2012.

[17] Ibid.

[18] “Wealth,” Lexico / Oxford Dictionaryhttps://www.lexico.com/en/definition/wealth

[19] Kenneth Boulding, “Income or Welfare,” The Review of Economic Studies, Volume 17, Issue 2, 1949, Pages 77–86. https://academic.oup.com/restud/article-abstract/17/2/77/1567378. Via McElroy & van Engelen, op cit.

[20] Paul Ekins, “A four-capital model of wealth creation,” in Paul Ekins & Manfred Max-Neef, Real-Life Economics, Routledge, 1992. 

[21] John Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Capstone, 1997. pp 70, 72.

[22] Donella Meadows, Indicators and Information Systems for Sustainable Development, Sustainability Institute, 1998. http://donellameadows.org/wp-content/userfiles/IndicatorsInformation.pdf

[23] Jonathon Porritt, Capitalism as if the World Mattered, Earthscan, 2005.

[24] Forum for the Future, The Five Capitals – a framework for sustainabilityhttps://www.forumforthefuture.org/the-five-capitals

[25] Forum for the Future, op cit.

[26] Porritt, op cit. p 112.

[27] McElroy & van Engelen, op cit.

[28] The Prize in Economic Sciences 2018, The Royal Swedish Academy of Sciences, 8 October 2018. https://www.nobelprize.org/prizes/economic-sciences/2018/press-release/

[29] William Nordhaus, “Revisiting the social cost of carbon,” PNAS 114 (7) 1518-1523, 14 February 2017. https://www.pnas.org/content/114/7/1518

[30] William Nordhaus, “Climate Change: The Ultimate Challenge for Economics,” Nobel Lecture in Economic Sciences, Stockholm University, 8 December 2018. https://www.nobelprize.org/uploads/2018/10/nordhaus-slides.pdf  

[31] Ibid. 

[32] Intergovernmental Panel on Climate Change (IPCC), Global Warming of 1.5°C (SR15), 2018. https://www.ipcc.ch/sr15/; IPCC, Fifth Assessment Report – AR5 Synthesis Report, 2014. https://www.ipcc.ch/report/ar5/syr/   

[33] United Nations Framework Convention on Climate Change (UNFCCC), The Paris Agreement, 2015. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

[34] Ironically, the “idea of two degrees as the safe threshold for warming evolved over a number of years from the first recorded mention by economist William Nordhaus in 1975.” Matt McGrath, “What does 1.5C mean in a warming world?” BBC, 2 October 2018. https://www.bbc.com/news/science-environment-45678338

[35] Nicolas Stern, The Economics of Climate Change: The Stern Review, HM Treasury, UK, 30 October 2006. https://webarchive.nationalarchives.gov.uk/20100407172811/http://www.hm-treasury.gov.uk/stern_review_report.htm

[36] Hal Varian, “Recalculating the Costs of Global Climate Change,” New York Times, 14 December 2006. https://www.nytimes.com/2006/12/14/business/14scene.html

[37] Tedros Adhanom Ghebreyesus, “Climate Change Is Already Killing Us: How Our Warmer and Wetter Planet Is Getting Sicker and Deadlier by the Day,” Foreign Policy, 23 September 2019. https://www.foreignaffairs.com/articles/2019-09-23/climate-change-already-killing-us

[38] McElroy & Thomas, 2014, op cit; See also Mark McElroy, Some Important Works in the Literature on The Capital Theory Basis of Sustainability, Center for Sustainable Organizations, 2012.


[39] Mark McElroy, “Sustainability and Multicapitalism — Together at Last!” Sustainable Brands, 10 April 2014. https://sustainablebrands.com/read/defining-the-next-economy/sustainability-and-multicapitalism-together-at-last; Mark McElroy, Great Transition Inititive listserve, August 2016. On P2P Foundation Wiki Page https://wiki.p2pfoundation.net/Multicapitalism; the version of these definitions included in this White Paper are the result of further refinements resulting from discussions between Dr. McElroy and the author. 

[40] Mark McElroy & Martin Thomas, “The MultiCapital Scorecard,” Sustainability Accounting, Management and Policy Journal, Volume 6, Number 3, 2015, pp 425-438. https://www.emerald.com/insight/publication/issn/2040-8021/vol/6/iss/3; Mark McElroy, Social Footprints: Measuring the social sustainability performance of organizations, Dissertation, University of Groningen, 2008. https://www.rug.nl/research/portal/files/13147569/DISSERTATION-2.pdf McElroy & van Engelen 2012 op cit.

[41] Hans Carl von Carlowitz, Sylvicultura Oeconomica, Johann Friedrich Brauns (Leipzig), 1713. “Esse” means “essential nature” – or more concisely, “essence.”

[42] Meadows et al, 1972, op cit.

[43] Global Footprint Network

[44] Meadows et al, 1972, op cit. “…a population growing in a limited environment can approach the ultimate carrying capacity of that environment in several possible ways. It can adjust smoothly to an equilibrium below the environmental limit by means of a gradual decrease in growth rate… [upper left graphic] Or it can overshoot the limit and in the process, decrease the ultimate carrying capacity by consuming some necessary nonrenewable resource… [lower left graphic]” pp 91-91.

“The behavior mode of the system shown in figure 35 [right graphic] is clearly that of overshoot and collapse… The basic behavior mode of the world system is exponential growth of population and capital, followed by collapse.” pp 125, 142.

[45] Global Reporting Initiative (GRI), Sustainability Reporting Guidelines, 2002. https://www.r3-0.org/wp-content/uploads/2020/03/GRIguidelines.pdf

[46] McElroy, 2008, op cit. 

[47] McElroy, 2008, op cit, pp 104-105.

[48] Barbara Ward, The Cocoyoc Declaration, United Nations Environment Programme (UNEP) & United Nations Conference on Trade and Development (UNCTAD), 1974. https://wedocs.unep.org/bitstream/handle/20.500.11822/29847/Earth1.pdf

[49] Johan Rockström, Will Steffen, et al., “A safe operating space for humanity,” Nature, Volume 461, pp 472–475, 23 September 2009. https://www.nature.com/articles/461472a

[50] Will Steffen, Katherine Richardson, Johan Rockström, et al, “Planetary boundaries: Guiding human development on a changing planet,” Science, Vol. 347, Issue 6223, 13 February 2015. https://science.sciencemag.org/content/347/6223/1259855

[51] Rockström et al, 2009, op cit.

[52] Raworth, 2012, op cit, p 7.

[53] Kate Raworth, “A Doughnut for the Anthropocene: humanity’s compass in the 21st century,” The Lancet: Planetary Health, Volume 1, Issue 2, PE48-E49, 1 May 2017. https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(17)30028-1/fulltext

[54] Ibid.

[55] Ibid.

[56] IIRC, op cit.

[57] Ibid.

[58] BASF, We Create Value, undated. https://www.basf.com/global/en/who-we-are/sustainability/we-drive-sustainable-solutions/quantifying-sustainability/we-create-value.html

[59] Ibid.

[60] Impact Valuation Roundtable, Operationalizing Impact Valuation: Experiences and Recommendations by Participants of the Impact Valuation Roundtable, White Paper, March 2017. http://docs.wbcsd.org/2017/04/IVR_Impact%20Valuation_White_Paper.pdf Note that this graphic essentially “cuts-and-pastes” the BASF Value-to-Society approach.

[61] Christian Heller (BASF), “Value To Society – A Balanced Approach To Measuring Business Impact,” Global Goals Yearbook 2019, UN Global Compact, 2019. https://www.basf.com/global/documents/en/sustainability/management-goals-and-dialog/networks/global-compact/Global%20Goals%20Yearbook_2019_BASF_2019-08-05.pdf

[62] Ibid.

[63] Ibid.

[64] Jérôme Pelenc, Jérôme Ballet & Tom Dedeurwaerdere, Weak Sustainability versus Strong Sustainability, Brief for United Nations Global Sustainable Development Report, 2015. https://sustainabledevelopment.un.org/content/documents/6569122-Pelenc-Weak%20Sustainability%20versus%20Strong%20Sustainability.pdf

[65] “About Us,” Value Balancing Alliance. https://www.value-balancing.com/about-us/

[66] Heller 2019, op cit.

[67] Future Fit Business Benchmark, Creating System Value, Concept Note, April 2017. https://futurefitbusiness.org/wp-content/uploads/2017/04/Future-Fit-Business-Benchmark-Creating-System-Value-Concept-Note-V1.pdf; Stephanie Bertels contributed to the development of the concept of System Value in conversations with Geoff Kendall dating back to this same time period, and integrated the concept into subsequent work with the Embedding Project. Stephanie Bertels & Rylan Dobson, Embedded Strategies for the Sustainability Transition: Setting Priorities and Goals Aligned with Systems Resilience, The Embedding Project, April 2020. https://embeddingproject.org/pub/resources/EP-Embedded-Strategies-for-the-Sustainability-Transition.pdf

[68] Ibid.

[69] Future Fit Business Benchmark, Methodology Guidance, Release 2.1.4. August 2019. https://futurefitbusiness.org/wp-content/uploads/2019/08/FFBB-Methodology-Guide-R2.1.4.pdf

[70] Thomas Kuhn, The Structure of Scientific Revolutions, University of Chicago Press, 1962.

[71] Donella Meadows, Leverage Points: Places to Intervene in a System, The Sustainability Institute, 1999. http://donellameadows.org/wp-content/userfiles/Leverage_Points.pdfShe actually revised her original list to add one higher level: “the power to transcend paradigms.” 

[72] Ibid.

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