Embracing Regenerative Business: Bridging Theory and Practice
Re-evaluating the capitalist model, once considered a fringe or "hippie" viewpoint, has now entered mainstream discourse. Influential business leaders, like Paul Polman, are now openly advocating for companies to become net positive, contributing more to the world than they extract. Businesses are reconsidering their methods and exploring alternative approaches, where their role goes beyond generating economic value to include social and environmental aspects as well.
In recent years, the regenerative paradigm has gained significant momentum among companies seeking to create positive change in the world. As sustainability continues to be a central topic of discussion, it is becoming increasingly clear that merely minimizing harm is insufficient. There is a growing recognition that sustainability itself represents a predominantly anthropocentric perspective, leaving us disconnected from the living systems we are a part of. To secure a thriving future, we must actively regenerate both the social and ecological systems with which we interact.
Now more organizations and individuals strive to understand the implications of regenerative practices, it becomes increasingly important to examine the fundamental principles of regenerative business and their application within the business context. In this article, I delve into the theory and practice of regeneration, sharing some of my personal encounters with this approach and exploring some new ways to develop the practice further.
Understanding Regenerative Business
My journey into the field of regenerative business began with the work of Carol Sanford. With decades of experience, Sanford has become a leading pioneer in applying the regenerative paradigm to the business world. In her book "The Regenerative Business," she defines regenerative businesses as those that continually evolve their unique essence and create new value by engaging with the living systems they are part of.
Sanford states that regenerative businesses should not solely aim for sustainability or minimal harm; they must actively regenerate the social and ecological systems with which they interact. She emphasizes the importance of nurturing employees' and organizations' capability to realize their unique potential. But most of all, Carol Sanford highlights the need to approach regeneration as a worldview rather than a predefined practice, recognizing the essence of living systems and cultivating their potential from within.
After discovering Carol Sanford's work, I participated in the Regenerators course led by Laura Storm and Jenny Andersson. Laura, who co-authored "Regenerative Leadership" with Giles Hutchins, also emphasizes the importance of living systems thinking but adopts a more ecological perspective. She envisions regenerative businesses as entities that seamlessly integrate with nature and society, nurturing ecosystems and creating shared value for all stakeholders. Hutchins promotes a life-affirming approach, speaking about a shift from a mechanistic, linear mindset to a more organic, interconnected mode of operation that encourages collaboration. These ideas are further examined in Hutchins' recent book, "Leading by Nature."
Although their approaches may slightly differ, both Carol Sanford, Laura Storm and Giles Hutchins emphasize the need for businesses to transcend mere sustainability and actively participate in regenerating ecological and social systems. At its core, regeneration encompasses a holistic approach that perceives the world through the lens of living systems, focusing on renewal, regrowth, and restoration of that which has been lost or damaged. A regenerative business, therefore, is one that is committed to revitalizing itself and the larger living systems it is part of, generating a positive and sustainable impact on both the environment and society.
But what are the practical implications of the concept of regenerative business for real-world businesses? While Carol Sanford and Giles Hutchins provide numerous examples of regenerative business practices in their books, the common discourse on the topic still tends to rely on abstract and philosophical terms. And although it's important to think about regeneration conceptually, putting it into practice is a different challenge altogether. To make the regenerative approach actionable, we need to find ways to translate it into practical applications
Early Adopters of Regenerative Practices
As said, at the moment, regenerative business practices can be primarily viewed as a perspective or worldview. Nonetheless, we're seeing well-known businesses such as AXA, Unilever and Kearney bringing the term generation into the mainstream and incorporating it into their branding and value propositions.
For instance, AXA established a subsidiary called AXA Climate, which helps other companies embrace regenerative practices. AXA Climate provides training and consulting services to support businesses in transitioning and investing in regenerative agriculture. They put the following on their website:
"Reducing our negative impact on the planet is not enough. Our collective challenge is to transition from extractive companies to regenerative ones. To achieve this, we are transforming our business models, organizations, and collective missions. This transformational movement propels us forward. We are changing the paradigm: our companies are living beings, nested in the living world."
Regenerative agriculture seems to be the entry point for most businesses to enter the field of regeneration. In previous years, companies such as Unilever, PepsiCo and Nestlé all committed toward realizing a regenerative food system. And although most of the focus of corporates is still on regenerative agriculture we are also seeing other firms such as, Kearney, a management consulting firm, integrating regeneration into their business practices. When searching for ‘regenerative business’ online, their website appears at the top of the results, promoting regeneration as a means to reshape business:
"Our world is changing rapidly, forcing organizations around the globe to reevaluate what it means to be successful, where profits, people, and planet are all part of the equation. At Kearney, we understand that tomorrow’s thriving organizations will be those bold enough to change how they operate and become regenerative—functioning in a way that continually self-repairs, turns their values into an advantage, and delivers a positive impact on people, environments, and economic goals."
These statements underline the growing awareness that traditional business practices are unsustainable and that there is an urgent need to transition from extractive to regenerative operations. The bright side of this development is that the adoption of regenerative practices by more companies helps establish a shared language, facilitating the implementation of regenerative principles across the business landscape.
The Journey Toward Regeneration
However, there is also criticism. It remains to be seen how genuinely this transformation is taking place, and whether a business can ever be fully regenerative. Even companies known for their commitment to doing good, such as Patagonia, are far from achieving true regeneration. Operating within a predominantly extractive market context, businesses face challenges in balancing regenerative practices with maintaining competitiveness, even among the frontrunners.
Given this context, I'm not sure if I entirely agree with all the criticism. I believe it's important to approach the gap between theory and practice with empathy. With my own background in business, I understand how counterintuitive regenerative practices can be compared to conventional business approaches. Businesses operate in a largely degenerative context and depend on the larger systems in which they exist. Additionally, the mental shift required to transition from extractive to regenerative is truly significant. It is easy for activists and academics to remain theoretically pure and criticize the business world for not doing enough.
As Carl Jung once said, complex problems are never solved; they are only outgrown. The same principle applies to the challenges that we face in the business world today. I believe that, when given the choice, most business people want to do the right thing, but they often don't know how, given the market circumstances they are part of. We must give ourselves the time to evolve beyond our current constraints into a regenerative environment. This developmental journey requires regeneration of ourselves as much as the social and ecological systems we are part of.
The most significant step is realizing a true shift in paradigm. As noted by some of the thought leaders I quoted earlier, regeneration is primarily a matter of changing perspective. In many cases, regeneration is mentioned alongside sustainability and ESG. Today, it is often regarded as "sustainability+" and, in doing so, misses the fundamental point. In these cases, the paradigm shift underlying regeneration isn't fully recognized. Approaching our environmental challenges as problems to be fixed, with regeneration as an improved tool in our toolkit, still leaves us operating from a mechanistic mindset. One could argue that this mindset is the root issue of our degenerative practices.
A crucial factor in shifting perspective is having real-life examples to reference. There remains a significant gap between theory and practice, as there are still relatively few real-life examples illustrating how regeneration works in business settings. This gap presents a challenge for practitioners in the regenerative field. While practitioners of regenerative agriculture can easily demonstrate the difference between a regenerative farm and an industrial farm, the distinction is much more challenging for regenerative businesses.
Providing better examples of what regenerative business entails will make it easier to inspire others to follow suit. We need to transition regeneration from being predominantly an intellectual concept to a tangible phenomenon, illustrated by real-life examples, particularly in the business world.
Closing the Gap Between Theory and Practice
To bridge the divide between theory and practice, it is essential to bring regeneration to life by moving beyond discussions and into action. Businesses and thought leaders must collaborate, experiment, and innovate to create tangible, successful examples of regenerative practices. By doing so, they will demonstrate the value and practicality of regeneration, inspiring more organizations to adopt and contribute to this paradigm shift.
In the business world, several initiatives are emerging that explore regeneration. AXA Climate, as previously mentioned, has constructed an impressive organization centered on this theme, while BMW Foundation Herbert Quandt has launched a regenerative initiative called RESPOND Accelerator. This startup accelerator program aims to "empower founders and changemakers to drive the transformation of our economic system through regenerative business models and Responsible Leadership.”
And closer to home in the Netherlands, I recently attended a debate session on Urban Regeneration organized by Future Minds, a network formed through a collaboration between Arcadis and Northumbria University. Their goal is to create a network of knowledge institutes and business partners collaborating within an ecosystem to work on regenerative initiatives. What’s interesting about this initiative is that it is founded by young professionals that are seeking to find new ways to have impact in their professional careers.
Regenesis Institute for Regenerative Practice, another organization focused on regenerative development, has played a pivotal role in my personal learning journey. With over three decades of experience, Regenesis has been at the forefront of this field, engaging in a variety of projects related to urban planning, architecture, and community development. Last year, I was privileged to take part in a course conducted by Pamela Mang and Ben Haggard, which provided me with invaluable regenerative development frameworks that are applicable in a business setting.
Most importantly, Regenesis nurtures a global community of practitioners who collaborate and support one another in weaving regenerative practices into their professional lives. For instance, earlier this year, I initiated a Regenerative Practice Group in the Benelux region, together with Anna Koens, Dany Snokx, Inge de Smet, Jeffrey Hull, Robert Kramps, Sinead O' Keeffe, and Thieu Besselink. Our group meets on a monthly basis to support each other in our shared regenerative journey.
These are all examples of businesses and professionals experimenting with regeneration and trying to bring it alive. While I'm only familiar with a few of those initiatives, many more are sprouting up, indicating that we are on the verge of a regenerative revolution.
With much of the practice yet to be defined, we won't get it right immediately. Unlearning will take time. As Peter Senge notes in his book, The Fifth Discipline, the gap between where we are and where we want to go can be seen as the creative gap. This gap allows us to grow into the future version we aspire to be. We shouldn't judge ourselves or others for falling short of being 100% regenerative. At this moment, no one is, and we should celebrate every attempt in the right direction.