"Hi, I'm Erika, and I am a recovering impact investor 👋 " That was the title of my LinkedIn post that reached far beyond my network and got almost 90,000 views. Obviously it struck a nerve.
Many people in impact eventually hit a point where the work stops being merely intellectually rewarding and becomes existentially terrifying. Not just because of the realisation of how close we are to ecological and biosphere collapse, but because, if you look deep enough into the polycrisis, you realize that the patterns behind how we try to solve these challenges look suspiciously like the mess that got us here in the first place: extraction dressed as progress, control dressed as governance, exponential growth dressed as inevitability. This is an uncomfortable mental step to take. Once you have crossed that threshold, what is the work worth doing?
Why impact needs to evolve
The work worth doing, is the work that changes the pattern. Impact investing was born from a moral ambition; to do good within the system, while still delivering returns. That already feels like progress, capital deployed toward solutions, externalities acknowledged, outcomes measured. Don't get me wrong, impact investing is great – within the existing paradigm. But perhaps it's time to ask a different question: how do we deploy capital in ways that actually transform systems, rather than merely sustain the ones we already know are unsustainable?
This is where we get stuck, it seems impossible to fund Horizon 3 change (the desired future) when your fund model, incentives, and reporting are built for Horizon 1 (the currently dominant but failing system). So the system continues to produce ecological degradation, social fragmentation, and systemic fragility. For LPs this shows as a dissonance between what the GP says and what the vehicle is structured for. For purpose-led founders, this leads to mission-drift or being chronically underserved by the capital allocators.
Volatility as an opening
The world investors call VUCA (volatile, uncertain, complex, ambiguous) is often framed as a threat, but it is also a catalyst. Extreme weather events, soil degradation, biodiversity loss, water scarcity, and energy volatility are no longer "sustainability issues". They are portfolio risks and threats to returns. In that context, conventional investment wisdom can't keep up. Some venture investors are already saying the classic VC model struggles under this kind of volatility. Others point to how quickly software moats can erode when AI makes building cheaper and faster. The implication is clear: established playbooks are optimized for a world that is fading.
This creates an opportunity for investors and operators from different sectors to enter finance and technology – not to copy existing models, but to diversify the perspectives shaping capital allocation.
Lately, we've seen nature being admitted as fundamental to business that has been wrongly accounted for. For example, the world's largest sovereign wealth fund formally declared nature a financial risk and repriced its entire portfolio accordingly. That recognition forces deeper questions about value: How do we deploy capital so the economy becomes conducive to life – rather than extracting life faster than systems can regenerate?
Regenerative Investing
On my recovery journey I found regenerative investing, which to me seems like sobriety of capital. This is not about finding the most "regenerative companies" and backing them while banking a 20% IRR. It's about investing regeneratively. In other words, changing the pattern.
This means that the regenerative investment logic is not only a practice, it's also a paradigm shift. It's not about accounting for externalities and mitigating ecological damage, like ESG and Green Investing. Neither is it about measuring social or environmental outcomes alongside financial return, like Impact Investing. Regenerative investing is at its core, an ongoing systems-practice: finding the knots in the current economy and loosening them from where we are, within what is possible, toward greater vitality and life.
One could argue that in a world of sustainability regression and strongman geopolitics it's not the time nor the place to retreat from impact investing. But the stronger the extractive forces, the more insufficient incrementalism becomes. If extraction accelerates, "some good" does not bend the system toward life. Regeneration is the counterforce. It moves us toward a win-win logic and an "infinite game" orientation, partnering with Earth Systems rather than treating them as inputs to be consumed.
The mindset shift
The crux is, regenerative investing is not a framework you can layer onto existing fund logic. It is a mindset shift: from mechanical thinking to living systems thinking.
Mechanical thinking is excellent at isolating variables, optimizing outputs, and reducing uncertainty into manageable parts. Many of us are trained in scientific methodology: reductionist, analytical, precise. That approach is valuable, but when it becomes the only lens we trust, we start misreading reality.
Because the world we are investing into is not merely complicated. It is complex. Complicated systems can be engineered and predicted. Complex systems evolve, adapt, and surprise. Even if you manage to understand the input variables, you cannot accurately predict the outcome. Complex systems cannot be controlled, they can only be stewarded. This is why regenerative investing can feel uncomfortable: it requires investors to hold ambiguity, to see relationships rather than isolated assets, and to accept that value creation may be nonlinear and delayed, yet still real.
Regeneration is often misunderstood as restoration or harm reduction, or treated as a sector label adjacent to regenerative agriculture. It is none of these. Regeneration is a developmental process through which a living system increases its capacity to evolve, adapt, and generate life. Not fixing problems, but enabling potential. A useful test is to ask: does this effort expand future options, or does it lock the system into a brittle path? In that framing, strengthening the capacity of living systems is not charity, it is a condition for durable returns.
What's worth doing
If we want to change the pattern and get capital to support continued life on this planet, four shifts matter.
First, we need to change the definition of value. Not simply to "include" nature as an externality, but to recognize that every business is a claim on future energy, materials, and labor – and that those inputs have biophysical limits. Value is not only what the market prices today; it is what keeps tomorrow possible. The foundations that make every other return possible should be valued accordingly.
Second, we need to change extractive incentives. A system optimized for short-term financial extraction will reliably degrade the very living systems it depends on. When incentives reward immediate gain without accounting for long-term viability, capital becomes a machine for converting future capacity into present returns.
Third, we need to move beyond reduced and static metrics. Targets can be useful, but regenerative processes are not captured by narrow KPIs. Regeneration is not a single outcome, it is a trajectory of more health in the business ecosystem. Instead of KPIs, investors need to develop ways to identify the process of becoming. This can mean increased resilience, adaptive capacity, diversity, and the health of the relationships that underpin performance.
Fourth, we need to shift from mechanical thinking to living systems thinking. The world we are investing into is interdependent, adaptive, and in constant flux. Investors that ignore this will keep misreading the terrain. Complex systems require a different kind of intelligence, not just analysis. Because in complex systems, "the future arrives in whispers rather than as clear data".
All of this can sound radical, but that is speaking from the logic of the past. The biggest shift ahead is not technological. It is relational and cognitive: how we define value, how we relate to living systems, and how we design capital to serve viability over extraction.
Would you commit to work that is structurally less likely to recreate the problem, even if, in the current paradigm, it is harder to fund, slower to explain, and less legible in conventional reporting? I think this is the work worth doing.