Author : Emmanuelle Aoustin, Ilustration : Florent Duchêne
Businesses have a major role to play and a unique ability to lead the regenerative transformation. They are able to influence, empower and align actors up and down value chains, within communities, across geographies, cultures and socio-economic groups. It's a hugely exciting prospect, but not an easy one.
In this article, we invite you to embark on a journey to new territories, and discover the 10 fundamentals of a business that each need to be thought through with a regenerative lens in mind.
Embracing a world where 9+ billion people can live well and where ecosystems thrive can only be achieved through urgent and significant transformations of our businesses.
The regenerative transformation is a radical shift for the business world. It's a shift from being reactive and doing less harm (traditionally the responsibility of sustainability leaders) to being proactive and thriving while solving our world’s biggest problems (the responsibility of all business leaders). This require multiple innovations that fundamentally redefine what it is to be a company and a profit-making enterprise.
Such a transformation is very much a journey to new territories. In our illustration below we mapped out the Regenerative Island with 10 different metaphoric ecosystems - meadows, rivers, cascades, peaks and coves - each representing a regenerative business characteristic. These are the 10 fundamentals of a business that each need to be thought through with a regenerative lens in mind.
Most of the focus around regenerative business today is about the transformation of the Business Model. And for a reason. It’s indeed the key topic. It focuses on the radical change of the conception and production of products & services, to ensure we provide for our needs while minimizing impacts and re-orienting to be in tune with thriving ecosystems.
The regenerative business model builds upon - and goes way beyond - existing concepts such as economy of functionality, circular economy, sharing economy, eco-design, eco-efficiency, green chemistry, industrial ecology, bio-sourcing & biodegradability, supporting ecosystem services, net-zero, etc. These approaches are intrinsic to the ‘sustainable’ business model - the “do no harm” model - that seeks to minimize impacts, or to the ‘restorative’ business model - the “do good” model, also called “Net Positive”.
Transforming the Business Model might be one of if not the most complex aspect of the regenerative transformation as organizations have to rethink their value proposition from its conception through to its distribution, delivery and monetization. Most of the current business models are based on volume and growth, and have detrimental social and environmental impacts - decoupling growth and impact has been an utopia long enough and it’s now time to shift.
The ‘regenerative’ business model works with and within the cycles of the living world. It operates “within the doughnut” (meeting the needs of all people within the means of the living planet) and seeks harmony with life, protecting Earth's life-supporting systems (the Planetary boundaries). Beyond the ecological aspect of regeneration, the ‘regenerative’ business model also embraces social regeneration, enhancing social justice, diversity, participation, collaboration, and enhancing our learning and development capacities.
A number of action-research projects are starting to provide resources to help transform business models such as Doughnut Design for Business, Lumia, La permaentreprise,etc.
Another obvious fundamental of business transformation is Vision & Strategy, both central to pivoting to regenerative businesses. This means being agile to combine 3 temporalities:
- the long term: a vision for a holistically regenerative organization - it’s high time organization integrate regenerative futures in their 2050 visions and 2030 strategic plans;
- the mid-term: leading an innovation strategy that will effectively generate the solutions to close the gap to regenerative futures;
- the short term: managing experimental transformation (piloting, trial and error) as the new normal. Focusing on what can be started now, what can be accelerated.
Business resilience needs to be weaved into the core of vision & strategy. It is not about having strong defenses and being resistant to change. It is about anticipating, embracing and adapting to changes and disruptions.
Whatever the temporality we look at, we do not have the time to wait. Decisions are needed immediately - not next year, or in a decade.
Some organizations have started a regenerative transformation from a different angle, the angle of Culture, Organization and Processes, following the approaches of liberating organizations: decentralized responsibilities, autonomous teams organized in networks, learning & feedback culture, and an advice-based non-hierarchical decision-making process.
Such companies make sure that how they operate, their work culture, the internal and external relations, support individual development and everyone's potential to act. Moving away from a mechanistic concept of an organization that’s a machine with processes, these liberated companies are life-affirming organizations.
There is currently a really great movement into redefining the company’s Purpose - it’s Raison d’Être. It’s indeed something that had completely disappeared with the capital and globalized economy to the benefit of the sole search for profit.
Following the trend of Corporate Social Responsibility, we are now collectively questioning: What is the ambition, the entrepreneurial project that the organization is set up for, the mission for a collective interest that gives meaning to all on board? Is the organization being of service to the new eco-social paradigm that we want to see? What is its contribution to the common good?
With the rise of the ‘for-purpose’ movement in many countries, the work on redefining purpose, when done right, is a significant pillar into regenerative transformation.
One specific aspect of the regenerative economy is its systemic approach. Eco-systemic cooperation is central, shaping value-chain or local collaborations focused on the common good, or developing pre-competitive partnerships.
Shaping a regenerative economy is not an individual autonomous process. Quite the contrary, the new approach looks at collaborating with its stakeholders and the socio-economic systems it’s part of: value-chain collaboration, coopetition within sectoral initiatives, interactions with the communities it’s part of, and effective stakeholder engagement including those with other interests such as citizens, NGOs, activists, universities, etc.
In that respect, Profit and Growth, the current fundamentals of business management, need to be re-thought with a regenerative lens in mind.
We have to go beyond our current thinking based on wealth or stock market value, and shift towards moderation of profitability goals, and redistribution of value to all those that contribute to create it. And then using the surplus profit to first pay the due taxes and invest in innovation, and only then allocating moderate dividends, and also contributing to other social causes through philanthropy.
Directly correlated to redefining profit and growth comes the reset of Performance tracking and accounting principles to integrate environmental and social impacts towards a global social, environmental and economic performance. This means a transparent disclosure of ESG information to all stakeholders, and integrating externalities into the accounting principles.
Paramount to the radical transformation is the Governance pillar. The radical transformation that’s needed includes:
- redefining success and how the board and executive committee set strategic priorities;
- integrating the purpose into the Articles of incorporation of the company;
- rethinking ownership, the role of investors, as well as legacy, moving from shareholder ownership to foundations and letting go of the idea of selling with capital gain.
The picture could not be complete without ensuring the solid foundations for a regenerative culture. A culture where Values and Principles encompass:
- Thriving living systems as the framework
- Care as a work ethics
- Systemic thinking as a mindset
- Wisdom of living systems as a guide
One aspect that is rarely talked about yet of high importance is Corporate Activism. A regenerative business needs to also be active in creating the regenerative landscape to play in (the economy, the institutions (banks, justice), ethics, etc). Ways it can engage include thought leadership, being active within initiatives that shift the institutions, and sharing knowledge and contributing to the “commons”.
Business can and must both walk the talk through its actions, and advocate for changes to the “rules of the game”.
All these fundamental business characteristics are interconnected. Starting to shift one will also bring others into motion. But also preventing one of those to change, consciously or not, could be hindering the regenerative transformation of the whole.
Keeping in mind the holistic approach to business transformation is important: look at the whole map of the regenerative island from time to time and identify the other ecosystems that need exploration!
Finally, the regenerative journey is a journey that’s specific to each organization. Which of these strategic aspects the organization will start with, and how radically it’s ready to shift for each aspect is specific to where it’s starting from and what it is most ready for.
There is no roadmap available, it’s a transformational journey. Welcome on board !