The last two decades of business have been characterized by the digital revolution: a period in which data and digital technologies permeated every industry, transformed business models, recalibrated global markets, and unleashed countless new innovations.
Looking forward, a new revolution in business is taking shape: one that reconnects business with social and planetary health. Business is not only a platform for generating profits, but it can also re-generate value across the ecosystems in which it operates.
A regenerative business does better with less, creating, upcycling, & distributing value across stakeholders, to develop capacities for flourishing ecosystems, both human and environmental.
Although the concept of regeneration is nothing new– the interconnectedness of life is of course central to many indigenous and spiritual traditions, and ecological and biological sciences have long been focused on how life supports itself – a culmination of forces are catapulting it into the business community. Although the term itself remains somewhat niche, even this is shifting. Here are four signals that regenerative business is becoming mainstream.
1. CORPORATE ACTIVITIES
Many of the world’s largest corporations have announced regenerative objectives and activities. A wide range of enterprises across industries and geographies are using the language of regeneration. And while talk is cheap, the sheer influence these companies have on markets, policymakers, and their ecosystems is enormous. What follows is a list of multinational corporations which have not only announced their aspirations, but are investing in real initiatives across business functions.
Several social and environmental principles enable Guayakí’s model of Market Driven Regeneration, including its treatment of workers, community, and environment. Shade-grown yerba mate provides an incentive to maintain rainforests (and their rich biodiversity, natural water supply, carbon sequestration, and human cultures), effectively aligning business with reforestation instead of deforestation.
IKEA uses the Sustainable Development Goals as the orientation for business model transformation. Its People and Planet Positive Strategy involves new technologies and innovative materials, designs for circular consumption, and investments in generating its own clean energy, as well as in workers and community development across the value chain.
Walmart’s regenerative business efforts focus across its supply chain, with initiatives to improve material circularity and recycling, land conservation, management of harmful chemicals, regenerative agriculture and aquaculture, labor and traceability standards, fleet electrification and accelerate transition to renewable energy.
Harley Davidson’s “Inclusive Stakeholder Approach” involves a multi-pronged approach, doubling down on emissions reductions (including electric motorcycles!); investing in local communities via its Foundation, and its recent Hardwire Grant, which made every single employee in the company a shareholder.
Kaleido Insights is tracking regenerative business model activities across a range of corporates. Who are we missing?
Concerns for greenwashing are at an all-time high, and many skeptics point to checkered pasts large corporates have when it comes to highly degenerative practices, from deforestation and over-extraction of local resources to exploiting slavery and child labor. Are we watching a true transformational pivot among industry giants? A more robust approach treating sustainability as strategic rather than a reporting exercise? Or, is this merely PR firms’ latest buzzword slotted into marketing and mission statements?
2. START-UP ACTIVITY
Thematic investment is nothing new, and ESG investment has certainly been on the rise, but for the first time we are starting to see investment and venture capital firms use “regenerative” as a theme. Regeneration.VC, for example, is a new $45M fund by investors, entrepreneurs, scientists, cultural and corporate leaders, focused on circular economy innovations inspired by natural processes, across design, use, and reuse.
ReGen Ventures is another example of a fund investing in regenerative technology companies across transportation, logistics, supply chain, and storage.
RePlant Capital is another notable example, not only of an investment firm focused on regenerative agriculture, but on pioneering new models to scale growth across stakeholders.
Beyond the obvious momentum in “sustainability,” regeneration incorporates an even wider purview of potential. From AgTech to circular economy, from carbon capture to electrification, thousands of start-ups and investment firms are doubling down on projects working toward regenerative designs, products, and outcomes across industries. PWC estimates some $60B (210% growth year-over-year) invested in “climate tech” to 2021 alone, a category which hardly accounts for related markets such as those in crypto-regenerative finance (Re-Fi), or related blockchain and tokenization towards biodiversity. Zooming out from category names like FinTech, BioTech, or FoodTech, one finds thousands of start-ups working on regenerative innovations.
3. REGENERATIVE DESIGNS ACROSS INDUSTRIES
Another signal of a macro-trend is when it emerges across multiple domains. The regenerative design paradigm is gaining traction far beyond regenerative agriculture, including in hospitality and tourism, retail, technology, textiles and fashion, investment and finance, packaging, manufacturing, construction, civil engineering, bioregional development, and beyond.
Another signal here is the increasing role of digitization to address sustainability, inclusion, democratization, and greater accountability and trust. While only a handful of technology companies are framing their tools as regenerative, all are investing in a wide range of “green” cloud services into their platforms, thus enabling their millions of customers with climate data, metrics, and optimization tools. Digitization is also a core enabler of industrial transformations towards sustainability and ultimately regeneration, such as electrification of logistics fleets and buildings, circular economy, as-a-service business models, workflow optimization, distributed collaboration, and more. Emerging technologies play a critical role in accelerating and scaling regenerative models, and the tech sector is awakening to this market opportunity.
4. BUSINESS ECOSYSTEM
Then there are movements across the rest of the business ecosystem. Beyond the many signals of shifting customer demands, we are also seeing signals cropping up across the many constituents and networks involved in business value chains:
Are we standing at the dawn of a century of (digital) regeneration?
Myriad forces indicate we are in a period of transition, standing “at the dawn of a century of regeneration,” as author and regenerative design pioneer Daniel Christian Wahl writes. But will it drive meaningful change in business? Many leaders see the need for radical change, but ask practical questions like:
- How will we measure impact?
- How can we pivot our business towards net positive, while reimagining our core assets, infrastructure, and business model?
- How will we bring the systems of people– employees, partners, communities– along?
Just as digital transformation created massive disruption to companies which ignored it, it also unleashed a new paradigm for designing, managing, measuring, and monetizing business. The contours of this new economic paradigm are yet unclear, but the signals of business transformation are abundant, and “digital” is only the beginning. What signals are you seeing?