According to the Forum, a non-profit organization that promotes sustainable development, the goods and services needed for a sustainable society come from the five sustainable capitals: Natural, human, social, manufactured and financial.
Natural Capital consists of the renewable and non-renewable energy and materials needed to produce goods and services, climate regulation and sink functions that absorb, recycle or neutralize wastes.
Using or extracting natural capital in excess of the environment’s ability to absorb, recycle or neutralize harmful effects to humans or the environment is unsustainable. The processes of manufacturing or using artificial substances cannot not exceed the environment’s capacity to disperse, absorb, recycle or neutralize their harmful effects. Finally, we need to protect as well as improve the environment’s ability to provide ecological system integrity, biodiversity and productivity.
Human Capital concerns health, knowledge, skills and motivation, which are required for productivity. It is essential to a healthy sustainable economy to enhance human capital through education and training, to provide resources and opportunities for individuals of all ages to maintain their health and support personal development through successful relationships and social interaction.
Social Capital consists of the institutions that foster the development of human capital through collaboration, such as families, communities, businesses, schools, and voluntary organizations. People need access to various and satisfying opportunities for work, creativity, and recreation. Governments and justice systems have to be accessible and trustworthy. Communities need to be able to share positive values and a common purpose. Societal institutions have to promote personal development of people and provide safe living and working environments, all while protecting natural resources.
Manufactured Capital consists of material goods or fixed assets contributing to production such as tools, machines and buildings. The work going into infrastructure and processes must be performed using the minimum natural resources and, at the same time, using the maximum human innovation and skills.
Financial Capital, such as shares, bonds or banknotes, enable other types of capital to be owned and traded. It has no real value in itself but, rather, is representative of natural, human, social or manufactured capital. In order to be sustainable, financial capital should appropriately represent the value of human, natural, manufactured and social capital.
A sustainability crisis occurs when the rate of consumption is not controlled and stores of natural, human and social capital are consumed faster than they are produced and vital reserves cannot be sustained for the long-term.
We need to consider all five types of capital. Focusing exclusively on one capital, such as financial or environmental, while neglecting the others is simply unsustainable.
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