What’s a regenerative business model?

Beautiful coastline with a sailboat

What’s a regenerative business model?

Purpose-led businesses are turning to eight principles observed from nature to adapt to our new reality

Perhaps the simplest way to understand what we mean when we talk about a ‘regenerative economy’ is to look to nature – which is where the idea came from in the first place.

After the last extinction event – the one that led to dinosaurs dying out – the planet entered into an era that scientists have labelled the Holocene. Nature and wildlife as we know it today flourished, creating a living system that existed in balance, equilibrium. It was a sustainable state where the planetary resources used could be replenished – regenerated – to satisfy the needs of life on Earth.

The idea of living within our planetary boundaries is where sustainability sits, but a regenerative mindset goes one step further for me.

Instead of ‘do no harm’, it’s more like ‘leave it better than you found it’. And we can do this by recognising that everything on our planet is part of an interconnected system – and if you add value in one area, the whole system improves.

John Fullerton, the president of the Capital Institute, published an influential report in 2105 called Regenerative Capitalism.

In it he said that the regenerative economy ‘differs from current approaches to sustainability in that, instead of focusing on social and environmental health using traditional reductionist logic to “solve problems,” it aims directly at building healthy human networks as the objective, drawing on universal principles and patterns, with “sustainability” becoming an outcome, a natural byproduct of systemic health. It is like (holistic) healthcare in contrast to (reductionist) disease care.’

The report outlines eight principles that create a healthy system and business can use this to frame a regenerative model for their organisation.

Beautiful coastline with a sailboat
Christian Joudrey, Unsplash

In right relationship

The report makes the case that there is no separation between ‘us’– humanity – and ‘it’ – the planet on which we depend for our very lives. ‘What is more,’ the report says, ‘we are all connected to one another and to all locales of our global civilisation. Damage to any part of that web ripples back to harm every other part as well.’ Business need to honour this relationship and ensure they act in a way that doesn’t cause harm to people or planet.

Views wealth holistically

Neatly summed up in the phrase ‘purpose beyond profit’, businesses need to recognise that true wealth isn’t just about the bottom line. They need to understand the value of all types of capital, including  ‘social, cultural, living, and experiential.’

Innovative, adaptive, responsive

If 2020 taught us anything, it’s that resilient businesses will be the ones who can adapt to the changing environment best. And I want to point out that there is a difference between being ‘reactive’ and being ‘responsive’. There is a mindset shift there that can see the long-term implications and act intentionally that businesses need to develop.

Empowered participation

‘In an interdependent system, fitness comes from contributing in some way to the health of the whole.’ Regenerative businesses will show up every day to make the entire system stronger and healthier – knowing that if everyone else is operating at their peak, they’ll be able to too.

Honours community and place

Regenerative businesses will recognise and honour the ‘mosaic of peoples, traditions, beliefs, and institutions’ that have evolved in human communities around the world. There is something unique and valuable within each one and by celebrating that, the system benefits from collective wisdom gained over time.

Edge effect abundance

It is at the edges – where people, organisations and ideas bump into each other – that ‘creativity and abundance flourish’. Businesses that are open and courageous enough to operate in that place will be the ones transforming ‘both the communities where the exchanges are happening, and the individuals involved’.

Robust circulatory flow

The circular economy is all about designing with the end in mind, and our ‘economic health depends on robust circulatory flows of money, information, resources, and goods and services to support exchange, flush toxins, and nourish every cell at every level of our human networks’. Regenerative businesses will have this circular mindset baked into everything that they do.

Seeks balance

The report sums it up perfectly here: ‘Being in balance is more than just a nice way to be; it is actually essential to systemic health. Like a unicycle rider, regenerative systems are always engaged in this delicate dance in search of balance. Achieving it requires that they harmonise multiple variables instead of optimising single ones. A Regenerative Economy seeks to balance: efficiency and resilience; collaboration and competition; diversity and coherence; and small, medium, and large organisations and needs.’

If you’d like to speak with us about how you can ensure your business model is regenerative, simply fill in our contact form or email us at hello@planetshine.com.