Beyond Sustainability: The Road to Regenerative Capitalism
Thomas Berry tells us, “It’s all a question of story. We are in trouble now because we don’t have a good story. We are in between stories. The old story, the account of how the world came to be and how we fit into it, is no longer effective.”
For better or worse, economy, from the local to the global, is now a central component of the human story. In our search for a new story, Capital Institute, together with our Field Guide to Investing in a Regenerative Economy project partners and our collaborators – practitioners and trans-disciplinary academics alike – is offering up a vision of what we are calling “Regenerative Capitalism.”
As part of that effort, we recently convened a small gathering of sustainability experts from diverse backgrounds to discuss the Field Guide project as well as a draft white paper entitled “Regenerative Capitalism,” which draws on business models studied in the Field Guide, integrating them into a theoretical framework. (You can the read a summary of the draft paper here.)
The new story, we believe, must be grounded in the physical reality of a planet whose natural resources and waste sinks are not unlimited, and the ethical reality that unbounded inequity is intolerable. The modern expansionist material economy story, despite its magnificent achievements in the past two centuries when its scale was far smaller, fails on both grounds.
The new story must also be relevant to a growing global population of seven billion people, half of which is currently living in urban environments, with the trend of continued urbanization appearing to be locked in. China alone anticipates building cities for 250 million new inhabitants in just the next five years. That’s thirty New York Cities.
The new story must also grapple with the reality of global corporations whose scale and span of influence exceed that of all but a few nation states and whose capital investment decisions will lock in much of the underlying infrastructure and technology choices that will define the quality and scale of the “global economy” of the future. This reality exists despite the fact that these global actors employ only a small minority of the world’s population, even after three decades of “globalization.”
Regenerative Capitalism has two components: first, a shift to a “regenerative paradigm,” and second, an evolution to a more complex understanding of what we need to understand as “capital” if the economy is to be ecologically sustainable and also promote shared well-being.
The regenerative paradigm is adapted from the leading edge of the design field. It demands a profound shift from the mechanistic and reductionist worldview of the industrial age, to a holistic, living systems or ecological worldview, consistent with our latest understanding of how the universe (including life on this planet) actually works. It understands the economy as embedded in – not separate from – culture, and embedded in the healthy working of the biosphere. In this worldview, social ills and the environment are not “special interests,” separable from the whole, anymore than a healthy circulatory system is separable from a healthy person.
Leading systems thinker and corporate consultant Carol Sanford presented the conceptual framework for a regenerative paradigm at our June convening. Carol says this new paradigm requires a new kind of thinking, allowing us to reconnect with essence at the level of the individual, at the level of institution, and even at the systems level. View her talk here.
I then presented ideas within my “Regenerative Capitalism” white paper, including the eight elements of a regenerative economy and the eight elements of regenerative finance. My presentation can be viewed here.
Attendees also had an opportunity to engage with the entrepreneurial leaders of our Field Guide project, and to see elements of the regenerative economy manifesting in their transformational and scalable models. Our discussion thus integrated theory with practice, as these visionaries described how they have infused theory into their everyday operations. At the same time, their practice has informed the theoretical framework developed in the white paper.
A premise of Capital Institute is that the transformation of finance is a necessary enabler for the transition to a regenerative economy. Participants of our convening began to explore what this transformation might entail, particularly focusing on the important role of investment in economic transition.
The convening provided a rich deepening of understanding, some heated debate, many new or under-represented perspectives, and a realization of how difficult and unknowable a paradigm shift of the magnitude contemplated is likely be. We will be revising our white paper over the summer based on the invaluable input from the convening and other generous and thoughtful readers of the white paper. A second draft will be posted on the website for public comment prior to final publication.
Like the unexpected fall of the Berlin Wall, or the seemingly unimaginable end of Apartheid, the emergence of a new economic story that will succeed our present unsustainable “Finance Capitalism,” whether it’s Regenerative Capitalism or something quite different, is likely to seem inevitable only in hindsight. But the work of its emergence is well underway, as the subjects of our Field Guide and many other regenerative projects make clear.
In the face of overwhelming distraction from powerful, entrenched interests of the old story, our challenge at this time is simply to see what is emerging before our eyes.
We will be posting more video highlights from the event, including discussions with our Field Guide partners and other thoughtful participants, soon.