Sustainability reimagined: regenerative business models

Impact entrepreneurs are leading the way in transforming business models. They are the pioneers that push the boundaries of conventional business models and rethinking crucial elements such as sourcing, production, consumption, distribution, and even ownership. Not just the practical elements of running a business are up for discussion, even the definition of profit itself is shifting

In the classic (capitalist) approach, profit equals some form of financial gain or growth of wealth, benefiting only a select few. A mindset that over time has proven to stimulate the extraction of resources, the absence of accountability and a lack of focus on sustainability.

As Shivant Jagroe puts it in his book ‘Voorbij Duurzaamheid’ (beyond sustainability),

We need to shift from the classic definition of ‘people, planet, profit’ to ‘planetary, multi-species, degrowth’.

Rethinking the definition from profit to purpose is a crucial tool in creating space for businesses that are able to regenerate ecosystems, empower communities and reshape industries. We have seen successful examples of such a redefinition towards a circular economy mindset, where production chains (or at least parts of it) are re-imagined so that more people profit.

Take United Repair Center for example. a successful company that extends the life cycle of clothing through repairs, offering jobs to people with a distance to the job market, collaborating with big brands such as Jansport, Patagonia and The North Face.

Sustainable and circular business models are great examples of minimizing damage to the world around us. However, these models are no longer sufficient to address the urgency of our global environment and societal challenges. To move forward, we need to push ourselves to replace ‘extraction’ with ‘contribution’, allowing the idea of actively restoring and revitalizing our planet to come back to life. This is the root of all regenerative practices.

Entrepreneurs looking to create change have the creative and innovative capacity to act as visionaries and mentors who challenge us to reimagine our economy. However, they can’t do it alone, certainly not when there is so much currently working against them. When politicians are not aligned on the urgency, and bureaucracy and legislation are slowing down necessary changes in policy, it’s almost impossible to share a truly world-transforming vision.

Systemic change is only realized through collaborative action where policymakers, business leaders and other stakeholders are aware of their individual responsibilities ánd collective power. This is why Impact Hub is building an ecosystem for regenerative pioneers.

In order to define a clear path forward and define key elements for the success of regenerative business models we have talked to thought leaders, entrepreneurs, financiers, and industry experts. Frontrunners such as WeAreStewards, Commonland, We Are the Regeneration, DOEN Foundation, and Regeneratie Coöperatie shared their vision on the future of regenerative businesses.

What we found is both inspiring and urgent.

When looking at the actual implementation of regenerative principles in business models rather than talking about regeneration as an abstract ideal, we need to reposition the interconnectedness of social, environmental and economic networks as a strength and a possible solution, instead of a weakness.

Truly regenerative businesses actively restore ecosystems and strengthen communities. They do this by embedding regenerative principles into every part of their operations.

Pepijn Duijvestein (director New Economy) describes regenerative business as “a combination of respecting biodiversity and replenishing the resources you extract from nature, keeping products functional for as long as possible to reduce the need for new materials, and understanding that a regenerative product or service is the residue of a process that has already contributed positively.”

There is no binary divide between “regenerative” and “not”. Businesses and their impact exist on a spectrum. As Robinson and Cole (2015) put it, “human activity does not necessarily have to be minimized because it is inherently harmful, but can instead contribute directly to both environmental and human well-being.”

Taking this into account, existing businesses can start the shift towards a regenerative business model by applying this way of thinking to certain elements of their production chain, for example.

When looking to implement regenerative principles into a business model for a new or existing organization, there are key factors that contribute to success. Our research highlights the most important elements to consider. However, the impact of these elements can vary depending on the nature of the business and the sector it operates in.

05. Design and production
Minimizing waste, resource use and emissions are crucial elements in regenerative production. By leveraging clean technologies, bio-based materials, and biomimicry, businesses can create more sustainable and efficient production processes.

06. Distribution and logistics
Prioritizing local supply chains, using renewable energy in transport, and optimizing routes all cut emissions while keeping operations efficient.

07. Social impact
Regenerative businesses actively contribute to the well-being of the communities they are part of. This can mean partnering with local enterprises, reinvesting profits into community-led projects, or supporting initiatives that create shared wealth.

08. End of life
Regenerative organizations design products for repairability, durability, and biodegradability. By embracing extended producer responsibility and investing in regenerative materials and technologies, they reduce environmental impact and restore ecosystems.

Along the way, regenerative entrepreneurs will face various challenges. Some of these challenges are similar to the classic hurdles that any new business has to navigate, however, some challenges are more complex for regenerative businesses.

Based on our research and conversations with regenerative entrepreneurs, we have identified five critical challenges. These challenges limit their impact potential and ultimately, their chance to thrive. These obstacles highlight systemic barriers in our economic system that must be addressed for regenerative businesses to thrive.

We mentioned how regenerative businesses won’t be able to change industries on their own. It’s virtually impossible to ‘be regenerative’ when operating in isolation, it takes collaboration with like-minded individuals and organizations. Entrepreneurs, knowledge partners, policymakers, and investors need to connect across industries to forge change.

There is an opportunity to support regenerative entrepreneurs by providing knowledge, connections, and access to alternative funding models. The best way to secure a resilient framework is to stimulate the forming of a collaborative community. As we are all familiar with the phrase ‘it takes a village to raise a child’, we could argue that ‘it takes a community to change the economy’.

Governance and ownership are important topics. “There is a need for new organisational models, like Steward Ownership. We provide startups with a tool to protect their mission and find suitable financing opportunities.,” says Jorick Wijnen, Advisor at We Are Stewards.

Strengthening interconnectivity, securing long-term investments, and exploring steward ownership models can provide the stability required for regenerative businesses to grow. These communities can grow within value chains in an industry, and even across sectors, for example between agriculture, construction, and textiles.

When compared to traditional business models, the financial frameworks of regenerative businesses are often quite different. The perspective on and definition of profit, the timelines to reach financial sustainability, and the views on wealth distribution are key elements to distinguish. This makes it harder for traditional investment models to match these enterprises to their funding criteria, limiting interest from potential investors.

For example: the main challenge in financing regenerative initiatives is balancing financial sustainability with regenerative impact. As Judith Bastiaans, Investment Manager at the Triodos Regenerative Money Centre, points out: many young regenerative businesses require investments that are relatively small in relation to how labor-intensive an investment deal is, and how high-risk they are. Unfortunately, the business case is still considered unappealing by many investors, making it harder for regenerative entrepreneurs to secure traditional forms of investment.

Steward-ownership and equity-sharing models, as mentioned by Fernando Russo, Founder at Meraki Impact, could play a key role in making funding more aligned with regenerative principles. However, as Jorick Wijnen also points out, many entrepreneurs are still figuring out how to secure investment while maintaining their regenerative governance structures. Adding the immense strain of (re-)structuring your organization to meet the steward-ownership requirements and the months worth of communication, deliberation, negotiation with partners and (potential) shareholders is many times too much to ask from young organizations.

We see a need for innovative financial structures with the right incentives, risk-sharing, frameworks and tools that cater to the unique needs of these entrepreneurs. More investors should follow in the footsteps of innovative investors like Triodos Regenerative Money Centre, DOEN Foundation and Meraki Impact, who are proactive in their approach and who have proven themselves willing to co-develop new models alongside regenerative entrepreneurs.

The Knitwit Stable x Joline Jolink x Rouaatelier

“Regenerative entrepreneurship in fashion thrives when different players focus on specific parts of the supply chain.”

Just like circular business initiatives require the widespread adoption of circularity throughout their value chain, regenerative businesses need to have “everyone on board”. It is nearly impossible for a single organization to adopt regenerative practices all by themselves. Without collaboration throughout the ecosystems, efforts will remain fragmented, with limited opportunities for impact.

In the Netherlands, a group of innovators is proving how a collaborative approach can drive real change. The Knitwit Stable ensures the foundation of regenerative fashion by producing high-quality, locally sourced wool through ethical and transparent farming. Fashion designer Joline Jolink then brings regenerative materials into the spotlight by incorporating Knitwit Stable’s wool into her collections, dyed using natural dyes by Rouaatelier, demonstrating how locally produced fibers can seamlessly fit into contemporary fashion.

Also famous designer Claudy Jongstra is working with her own flock of sheep. And then the facilitators of the Hollands Wol Collectief help to make sure good local wool doesn’t go to waste, but finds its way to good use in various industries.

Together, these pioneers showcase how regenerative principles can transform fashion, from farm to final product, creating a system that values quality, transparency, and sustainability at every step.

Our conversations with entrepreneurs, thought leaders and experts and our extensive research has revealed systemic barriers in manifesting a shift towards a regenerative economy. To act as a catalyst for change, we are developing an ecosystem for regenerative businesses together with our partners.

The main focus of this ecosystem is to support entrepreneurial organizations in overcoming these barriers, help them to successfully grow their regenerative businesses and maximize impact. Within this ecosystem, Impact Hub Amsterdam provides a Regeneration Venture Support Program that will offer regenerative pioneers entrepreneurial training, business strategy, access to strategic partnerships and facilitate collaborations with experts.

Together with financial institutions and investors, we aim to develop tailored financial solutions for regenerative entrepreneurs. We will contribute to a growing pool of viable enterprises to accelerate the shift toward a resilient, equitable, and thriving economy, encouraging long-term partnerships across value chains.

In collaboration with our partners DOEN Foundation, We Are Stewards, Amsterdam University of Applied Science, We are the Regeneration, Triodos Foundation, Rabo Foundation, Regeneratie Coöperatie and Food Hub, we are building an ecosystem to offer long-term support to regenerative businesses and to help speed up the transition of our economic systems.

For more information about this Ecosystem for Regenerative Business, click the button below. For other inquiries, please reach out to Susan Kessing, Head of Venture Support at Impact Hub, via susan.kessing@impacthub.net.