Regenerative Value Creation:
A new logic for business & economy
Regenerative Value Creation is the new logic for the urgently needed regenerative economy. It integrates economic success with regenerative impact for people and planet. It equitably benefits all stakeholders, including shareholders and Nature.
Implementing Regenerative Value Creation is both a challenge and a tremendous opportunity, as demonstrated by the following corporate examples. It requires fundamental transformation as well as pragmatic transition as companies need to stay profitable while fundamentally reinventing their business models.
The Regenerative Economy Forum supports the transition to Regenerative Value Creation as a new logic for business & economy. NOW Foundation and its public benefit company, NOW Partners, the secretariats of the Regenerative Economy Forum, support companies around the world, to discover and implement synergistic solutions that turn Regenerative Value Creation into a key competitive advantage that serves the whole.
Regenerative Business Models
Regenerative Value Creation goes far beyond doing nice CSR projects or even large-scale sustainability and circular initiatives that have positive impact financed by business as usual that sees benefiting stakeholders as a trade-off.
RVC transforms positive impact costs into investments that companies want to expand because they generate concrete business value by serving stakeholders. It provides a new business logic without which fundamental systems change towards a regenerative economy is impossible.
This requires new business models that make positive impact and economic success mutually reinforcing: SAP’s profits rise by 90 million when their culture index increases by 1%, as shared by their CFO. This redefines success, demonstrating that supporting our humanity is not only noble, it is also good for business.
Unilever & Kraft Heinz:
Regeneration vs old paradigm
Unilever is a good systemic example of moving towards Regenerative Value Creation. Its integration of strong sustainability actions with inspiring communication hugely increased its brand equity and secured its survival.
Unilever became much more attractive to all stakeholders, including customers, investors and talent. Two million are yearly applying to cover a few thousand job offers. This result aligns with research that millennials have a 300% preference to work for more sustainable companies, giving them a huge competitive advantage while supporting employees to live their purpose.
When Kraft Heinz attempted a hostile take-over, motivated also by the misunderstanding that Unilever’s actions on sustainability got in the way of maximizing shareholder benefit, it not only failed but eventually lost much of its own shareholder value because its old style business approach was out of touch with economic megatrends towards regeneration, which support companies like Unilever to thrive.
Bayer & Monsanto:
‘Business as usual’ is risky
Bayer destroyed an unprecedented amount of shareholder value by purchasing Monsanto. Very smart and highly experienced old school managers, investment bankers and other advisers thought this was Bayer’s most promising step into the future, tragically misjudging opportunity and risk.
They failed to see that this acquisition was a movement against time as more and more investors and other stakeholders see in companies like Monsanto the antithesis of Regenerative Value Creation. Especially in the long run, only companies that create regenerative value can succeed because the regenerative economy is not just a nice option, it is inevitable.
This is why the Dow Jones sustainability index, as well as other indices pointing towards regeneration now regularly outperform ‘business as usual’ indices that provide lower risk-adjusted returns. Deutsche Bank, therefore, predicts that soon 50% of all assets will align with ESG criteria, which point in the direction of Regenerative Value Creation.
Microsoft & Danone:
Carbon & Plastic Neutral
As business leaders we know things are rarely black or white. They have many shades of grey. And they can evolve. Bayer can regenerate and become a leader like Microsoft that turned itself around by fundamentally regenerating its culture and by not only promising become carbon neutral but by committing to extract from the atmosphere all carbon it ever emitted.
Through the Gates Foundation much of the shareholder value Microsoft generated is now supporting diverse stakeholders. Bill Gates’s face is a testament to the timeless wisdom that in the market of human fulfillment, love and service outperform money and power.
Danone like so many other companies struggles with plastic. In Indonesia it committed to become plastic neutral. It also developed genuine relationships with civil society. When the government considered revoking the license of foreign water companies, it was Greenpeace that defended Danone’s inspiring stance and invited local producers to follow. The license to operate is not God given. Especially for multinationals it is earned through concrete regeneration and respectful relationships.
Native & Leontino Balbo:
Brazil’s Native, co-led by Leontino Balbo, Jr. not only points in the direction of Regenerative Value Creation but successfully implements much of its potential in large scale organic agriculture that regenerates degenerated soil and positively impacts its team and the wider community within which Native operates.
Native produces one third of the world’s organic cane sugar on 40,000 hectares, which it sells to some of the world’s largest food and beauty brands with high margins because they want to associate themselves with Native’s positive impact and brand that is legitimized by many certifications.
The UN and French President Macron were so impressed by Leontino Balbo’s regenerative methodology – which he now applies to 1 million hectares and which generates higher yields than chemo-genetic methods – that they convened 80 heads of state to learn how we can feed humanity while regenerating communities and agricultural top soil, one of the world’s most endangered and essential systems. Click here to see an in-depth interview with Leontino Balbo. >>
NOW Foundation’s benefit corporation, NOW Partners, developed a program for all business units of a global conglomerate to discover and implement Regenerative Value Creation as their core business approach. The company prefers to remain unnamed because it considers this multi-year program to be a significant competitive advantage.
The program integrates fundamental transformation with pragmatic transition to maintain market strength while implementing innovation in all major business functions, including purpose, vision and strategy, business models and products, leadership and culture, branding and communication, value and supply chains as well as overall stakeholder engagement.
This integral approach generates synergetic opportunities. It enables mutually enhancing results by building on the interdependence of specialized but naturally interactive business functions. Companies, like all other systems of life are complex. We find simplicity and focus not by ignoring that but by daring to engage this generative complexity without getting lost in it.
Concrete Business Solutions
NOW Partners was founded to partner with the owners, leaders and teams of multinational corporations and large family companies around the world, supporting them to discover and implement solutions that are aligned with this fundamental redefinition of economic success.
In NOW Partners’ Services Section, you can find many more concrete cases of how we support leaders and companies to discover their unique manner of implementing innovations towards Regenerative Value Creation. This cutting-edge work builds on the track record of our 100 global partners who have decades of experience with owning, leading and advising companies and co-created the first sustainable business alliances across Europe and The Americas, including more recently the B Corp movement.
NOW’s partners also support systems institutions, including the U.N., the E.U., national governments and other multilateral institutions to fundamentally reinvent and implement new economic approaches. Changing the inherent logic of markets does not only require autonomous actions of customers, investors and talent. It also requires mutually reinforcing policies and other collective system interventions.
Regenerative Market Economy
After WW2, Germany shifted from total devastation to economic miracle because it successfully implemented a radically new economic logic called the Social Market Economy that outperformed the US in both the recent financial and the current Covid crises because it puts system health above individual profit maximization.
Now, we need a Regenerative Market Economy that not only provides good jobs and social conditions but is fully aligned with natural laws. It empowers full health for all human and ecological systems, which are fundamentally interdependent because contrary to mistaken belief humans are part of nature and can only survive and thrive within its systemic regeneration.
If we don’t change the inherent logic that orients our economic system, only a few will swim against its current. When the logic changes, it becomes natural and normal to do the right thing – the new normal for our economies in support of a regenerative civilization.
CEO Round Table & The Vatican
181 Business Round Table CEOs who lead many of the world’s largest corporations have announced that they will shift their focus from shareholders to benefitting all stakeholders. Critics are concerned that many of them are more talk than walk. But at the very least, their talk points in the right direction. In truth, all of us are still learning how to walk in the direction of a regenerative economy.
We have to collaborate across all apparent divides to make this happen. If we do, we can not only benefit from successful companies and regenerative economies but live our full human potential, integrating our essential qualities of being, like intelligence, love and creativity that empower meaningful innovation.
With the Vatican, we are convening CEOs and other stakeholders to help translate the Pope’s Laudato Sí – his ground-breaking teaching on the many levels of regeneration – into concrete action for companies and economies. There are millions of business leaders who want to live their values. Together we can learn how to concretely do this.
We will succeed together or not at all
Business as usual is numbing our hearts and minds to a point that it has become normal to degenerate nature, eradicate thousands of other species, ignore human rights violations and treat ourselves and others like inanimate human resources. We are told that this ‘business as usual’ is realistic even though it ignores the reality that we can’t possibly sustain economies that work against the laws of nature.
Regeneration requires more than finding technological solutions. It also calls us to (re)discover our full humanity which naturally evokes respect for other living beings and the desire to also serve the common good. Competition stimulates creativity and quality but like in real sports, it must be fair and inclusive competition on a level playing field that we build and protect together.
History has taught us that we can do what many think impossible. During the Covid crisis, billions of people radically and rapidly change their behavior. During World War II, Allied economies adapted to face a fundamental threat to life and civilization. Let’s make this our decade of regenerative delivery. Let’s stop indulging cynicism and enjoy giving it our all. There is no greater fulfillment than living our heartfelt purpose knowing that it does not only benefit ourselves but also our children and future generations of all living beings.