What Is Regenerative Capitalism?

February 3, 2022

regenerative farming

Sustainability is not about doing less harm. It is about doing more good.

Today, we are facing a crisis – far more serious than we can actually imagine. In 1987, the Earth Overshoot Day, the date on which humanity’s demand exceeds what the planet could regenerate in a year, fell on December 19. This, of course, didn’t stop us. In 2021, this date moved to July 29.

To continue our existence on Earth, we need to redesign the capitalist system we stick to nowadays. Up to now, we have been looking at ensuring net-zero emissions. However, it is too late for a net-zero. It is time to strive at leaving a net-positive impact on the Blue planet. 

For that, we need to focus more and more on regenerative capitalism…

But what does this mean?

In 2015, John Fullerton published his work “Regenerative Capitalism: How Universal Principles And Patterns Will Shape Our New Economy”. There, he introduced the ideas of Regenerative Economy, which “is a product of human and societal vitality, rooted in ecological health and the inclusive development of human capabilities and potential” rather than a product of gross national product (GNP) growth. According to Fullerton, a Regenerative Economy, gives has the following four characteristics: 

  1. Acts in ways that support the long-term health of the whole society – a characteristic which underlies “fitness” in an interdependent world;
  2. Sees economic and financial health as inseparable from human, societal, and environmental health; 
  3. Values richness and diversity, integrity, and fairness; and seeks excellence through constructive competition; 
  4. Responds to the full gamut of human needs, continuously adapting to changing circumstances, and evolving to higher and more effective levels of organization.

From there, he coined another important term – “Regenerative Capitalism”, referring to business practices that aim to build and restore rather than to exploit and eventually destroy. 

regenerative farming
Original photo: Gabriel Jimenez via Unsplash

Regenerative Capitalism And Businesses

According to John Elkington, the “godfather of sustainability” and the Co-founder of Volans – a London-based change agency, the transition towards Regenerative Capitalism necessitates completely new business models. 

“To change something, build a new model that makes the existing model obsolete.”

R. Buckminster Fuller

In 2016, Volans published its report “Breakthrough Business Models: Exponentially Social, Lean, Integrated and Circular” for the Business and Sustainable Development Commission. The main idea of the study was to raise awareness on the need for businesses to explore new forms of value creation in order to address the environmental and social challenges the world is facing.

The project explores the four elements of tomorrow’s successful business model:

  1. Social X – Businesses shall deliver financial and extra-financial value by generating positive social impact now and for the future. 
  2. Lean X – Businesses shall optimize capital use – from physical and financial through human and intellectual to social and natural.
  3. Integrated X – Businesses shall be integrated, managing financial and extra-financial value creation across economic, social and environmental systems.
  4. Circular X – Businesses shall be circular.

Companies That Adopted Regeneration

A number of companies have already adopted or are working on adopting the concept of regeneration in their business models. 

For instance, Patagonia is among the founding members of the Regenerative Organic Certified™ Program, a revolutionary certification for food, textiles, and personal care ingredients combining the best of both regenerative and organic agricultural practices.

PepsiCo announced in April 2021 that it will aim to scale regenerative farming across seven million acres of land by 2030 – the equivalent of its entire agricultural footprint. Similarly, General Mills has set a target to transition a million acres of farmland to regenerative agriculture by 2030.

The food giant Danone, in line with its “One Planet. One Health” initiative, enables its US farming suppliers to adopt regenerative agriculture through a number of practices like crop rotation, for example.

Interface, the global manufacturer of commercial flooring, also announced plans to make all its products regenerative. The company already made its portfolio carbon neutral and now it is aiming even higher. Interface launched the world’s first carbon negative flooring products, which absorb more carbon than they create.

Greyston Bakery has a slightly different model and relies on regenerative hiring policies. The company offers jobs to people who are often considered unemployable like illiterate people, addicts, ex-convicts, disabled people, and homeless people.

Digital Innovation and Regeneration

Disruptive technologies will drive businesses towards more sustainable practices and initiatives. Areas like robotics, artificial intelligence (AI), blockchain, gene editing, digital agriculture and virtual realities will play a key role in facilitating the transition from conventional to regenerative capitalism. 

Technology already proved its power during the Covid-19 pandemic. The global technology industry grew from USD 7.85 trillion in 2020 to USD 8.37 trillion in 2021 and is expected to reach USD 11.87 trillion by 2025.

Now sustainability and technology must go hand in hand to go after the net-positive impact we need to continue life on our planet!

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