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In Practice

These Are the Five Types of Capital That Will Ensure Our Resilience

Chair of Environmental Technologies at Cranfield University

COVID-19 shouldn’t have been a surprise. A global pandemic has been at the top of the list of likely threats known as the National Risk Register for years. The reason for the cataclysmic impact of the virus has been the way that our modern world is locked into silos, meaning we approach issues in terms of individual specialties. For example, COVID-19 is a health threat, so it needs a health response; there’s going to be an economic recession, so companies need economic resilience.

Instead, we urgently need to think in terms of the whole modern socio-ecological system that we live in — the combination of the natural and the human — to be able to deal with shocks like a pandemic. 

The increasing number and frequency of extreme weather events indicate that we’re at the beginning of ever bigger waves of change, with more extreme events and challenges ahead. Climate change is the wave that towers above everything else. 

We have brought this upon ourselves by destroying our life-support system: the global ecosystem of which we are a part. That means getting serious about resilience — not looking at more resilient health care systems, food supply chains, emergency services or ways of working alone, but the big picture of resilience and how everything is connected. 

What is the good of focusing on building a strong and efficient corporate organization if it can be broken by a virus, or by drought and famine, or wars caused by climate change?

The Five Capitals

I recommend thinking in terms of securing all five capitals that make up our socio-ecological system: 

  • Our natural capital (as the basis of all life)
  • Human capital (skills and aptitudes)
  • Social capital (institutions and communities)
  • Built capital (everything from our cities to manufactured goods)
  • Financial capital (the means of transferring resources between capitals)

There are lessons for businesses and society as a whole from natural ecosystems in their response to crises. Nature is used to shocks or perturbations, like a fire or flooding. They tend to come as part of annual or decadal cycles. Nature deals with perturbations, even benefits from them, because a local environment will “know” what to do; it has a built-in store of information on what’s happening and how to respond. There are buried banks of seeds under the soil; there’s a basis of living organic matter in the soil; birds fly in and deposit sources of new life; landscapes will recover and flourish.

We have reached a stage now where the information isn’t there in the natural system to cope with the level of change in terms of loss of biodiversity and climate. This, in turn, leads to a greater susceptibility to extreme events and events happening more often.

We will need to take a deeper look at the people, systems and areas of the natural world that COVID-19 has made us suddenly so much more acutely aware of.

Try Not to Panic

Although the pressure is increasing and acute, we need to try not to panic. We do, however, need to act urgently and significantly. The lesson about the importance of whole systems can be a positive one. It’s not about counting up the numbers of particular species or worrying about what’s in decline in one specific place. We must enable species to adapt and move to new locations, conserving and restoring where we can and providing new opportunities where we can’t. 

In some cases, this will need a “same play, different actors” approach to ensure the preservation of the working system. In Scotland, for example, climate change had changed the time of year when a species of caterpillar would emerge, resulting in a food shortage for young birds. At the same time, there has been the introduction of the Turkey Oak tree, which hosts a species of wasp with larvae that does appear at the right time for birds to eat. So, the quality of the system — its level of connected resilience — is maintained. The system will either be able to damp down the shock from a bump in the road, or it will accentuate that feeling, with each bump getting more damaging and painful.

No More Just-in-Time

For business, it is important to develop a level of connected resilience by considering all five capitals and how they impact each other. There needs to be a buffer — the space to flex and absorb the shocks. Over the past 100 years or more, we have squeezed out the buffer in favor of efficiency; we have lean, just-in-time operations that allow for fast and cheap delivery. 

But to be resilient, we need just-in-case now, not just-in-time anymore. We need more allowance for what might look like inefficiency and waste, so that when there’s a crisis, there’s some give in the system instead of a sudden break that is hugely costly to fix. Investment will be needed by societies in all five capitals — not just in the “target capital,” and not just chasing immediate results — in order to nurture a better human ecosystem. 

Agriculture is full of examples of how this works. Less intensive farming, without ploughing, may mean lower yields in the short-term; but over time, the soil ecosystem improves and becomes more self-regulating, and there is less need for diesel fuel, fertilizers and pesticides and yields will become more reliable.   

Reach Out Beyond Your Silos

Acting on the need for connected resilience is too radical for the impetus to come from a government or sector. It will need to be based on choices made by whole societies and a test of priorities: Are we living just for now or for the future? What sacrifices will that mean, and what will be worthwhile?

As the obvious starting point, connected resilience demands that people from all types of organizations look beyond their specialist silos. Resilience will not be found internally. 

We have to start entering into conversations within and across sectors and industries — and all the other areas of life we have been relying on or connected with, knowingly or otherwise — to be ready for whatever comes next. This involves a deeper look at the people, systems and areas of the natural world that COVID-19 has made us suddenly so much more acutely aware of. 

Jim Harris

Chair of Environmental Technologies at Cranfield University

Jim Harris is professor of environmental technology at Cranfield University. He’s best known for his work with industry, governments and the third sector on ecological restoration. 

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