ABSTRACT
Chapter 2 sets out the theoretical foundations for business and environmental sustainability. Both economics and science are used in order to make the case why business should be concerned about sustainability. From science, the laws of thermodynamics are used to show earth as a self-regulatory system that provides ecosystem goods and services for businesses. This form of capital as a business input is also called natural capital, which makes up the five capitals model alongside social, human, financial and manufactured capital. The ecosystem services drawn from this type of capital are not accounted for in economic terms, which means that many products are underpriced and oversupplied. These so-called negative externalities are not internalised in the prices businesses set and thus not reflected in the supply and demand of goods. In using ecosystem services, industry pays no price for the environmental damage done. This impact can be measured through ecological footprints and contrasted with the carrying capacity of the earth, which shows that planetary boundaries are crossed, resulting in overshoot. Whether the running down of natural capital in this way can be compensated for through human-created capital is a question the concepts of strong and weak sustainability attempt to answer.
