Regenerative Business Models: A Sustainable Approach to Business
For the past couple of years, we’ve been noticing two ideas at play in the business space which feel increasingly contradictory and ill-aligned with the planet.
One is the “grow and scale at all costs” mentality that says business owners aren’t successful unless they continue to strive, push for larger and larger revenue, and hit the seven figure mark.
Conversely is the realization that our planet is in crisis, with a lack of awareness from business owners who are the ones making decisions that determine how commerce flows.
The reality is that mindlessly selling more and more products is largely detrimental to the planet, and even though some companies are making more sustainable choices, whether that be in the form of natural textiles or recyclable packaging, it’s no longer enough to just have a business that sustains. Businesses need to provide for their customers and for the planet—it is not enough to do less environmental and societal harm; we need to work on undoing it through our work. We need to think regeneratively.
What are Regenerative Business Models?
Regenerative business models have emerged in response to the pressing need to address environmental, social, and economic challenges facing the planet. Regenerative business models aim to create a circular economy where products and services are designed to have a positive impact on the environment and society. They are built on the principles of regeneration, restoration, and renewal, rather than just reducing negative impacts.
Regenerative business models prioritize profits and sustainability, and take responsibility for their impact on the planet.
Regenerative business models actively work to restore and regenerate natural resources and social systems, aiming to create a closed-loop system where waste is minimized, resources are regenerated, and the natural environment is restored.
Regenerative business models put people and the planet first, and foster efficiency and resiliency.
Examples of regenerative business models include Patagonia, a very successful and profitable clothing company that uses the money they make to help restore and protect the earth. Other examples include companies like The Savory Institute, which facilitates the literal regeneration of grasslands and soil around the world.
Principles of Regenerative Business Models
Regenerative business models are based on the principles of sustainability, a circular economy, and biomimicry.
Sustainability
Regenerative businesses prioritize the health of the environment and the well-being of the people involved in their operations. They aim to create a sustainable future by minimizing their negative impact on the environment and actively restoring and regenerating natural systems.
Circular Economy
Regenerative businesses adopt circular economy principles by designing products and systems that are restorative and regenerative. Take FOLDS Wear as an example. This medical techwear company makes antiviral, sustainably made scrubs, and offers a recycling program to their customers so old scrubs can be re-made into new scrubs at the end of their lifecycle. By doing this, FOLDS Wear is helping eliminate waste and pollution.
Biomimicry
Regenerative businesses take inspiration from nature and adopt biomimicry principles in their operations. They aim to create systems that mimic natural processes and functions, such as closed-loop systems and regenerative agriculture.
Benefits of Regenerative Business Models
Improved Profitability
Regenerative systems can be more cost-effective than traditional business models. For example, regenerative agriculture practices can reduce the need for expensive inputs like fertilizers and pesticides. On the flip side, consumers want to spend their money on products that align with their values, which is why sustainable companies are seeing improved brand reputation over time, which can help drive profits.
Positive Impact
Regenerative business models aim to create a positive impact on the environment and society. By adopting these models, companies can contribute to the global effort to address pressing social and environmental issues and help prioritize the health of the environment. Patagonia’s Worn Wear, for example, sells used products at a discounted rate to keep them out of landfills.
Social Benefits
Regenerative business models prioritize the well-being of the people involved in their operations. This means businesses provide safe working conditions, fair wages, and opportunities for growth and development. By prioritizing social benefits, businesses can also contribute to the development of the communities they operate in.
Economic Benefits
By adopting sustainable and regenerative practices, businesses can improve their efficiency, reduce waste, and cut costs. They can also attract environmentally-conscious consumers, investors, and employees who are more likely to support their business practices.
How to Adopt Regenerative Business Models
Adopting a regenerative business model is no small feat. It requires a fundamental shift in the way a company operates. Here are some ways companies can adopt a new model:
Assess the Current Impact
Companies should start by assessing their current impact on the environment and society. This will help them identify areas where they can make improvements. Maybe they could start using renewable energy, reduce their waste, or give a portion of their profits to organizations they care about.
Set Regenerative Goals
Companies should set clear regenerative goals that align with their values and mission. These goals should be measurable and achievable.
Collaborate
Companies should collaborate with stakeholders, including suppliers, customers, and communities, to achieve their regenerative goals. This can help build trust and support as they work toward building a more regenerative business model.
Measure Progress
Companies should measure their progress towards their regenerative goals and track the impact of their efforts. This will help them identify areas where they can improve and make adjustments as needed.
As we face increasing environmental challenges, regenerative business models offer a promising solution for a more sustainable future. By adopting regenerative practices, businesses have the power to affect positive environmental, social, and economic benefits.