The rise of regenerative business – what is it and why is it gaining momentum?

Agriculture that doesn't just produce food for the farmer or landowner to sell – but also expands and enriches green spaces in the process. Or a clothing designer who both creates beautiful garments – and simultaneously strengthens the ecosystem in which she operates.

These are two examples of so-called regenerative entrepreneurship, a movement that is now generating increasing interest. Instead of focusing on recycling and reusing, it's about regenerating and improving the systems we're part of. And instead of viewing nature as a resource to optimise, regenerative businesses draw inspiration from nature's own cycles and principles.

A central aspect that distinguishes regenerative from traditional business models is that it's dynamic. Unlike more standardised sustainability systems, regenerative thinking embraces the complexity of each unique situation. What is regenerative in one context may not be so in another, which challenges established views on governance and measurability in business.

Instead of viewing nature as a resource to optimise, regenerative businesses draw inspiration from nature's own cycles and principles

This shift is now manifesting across multiple industries. Companies are experimenting with new organisational and ownership structures, innovative financing models, and alternative ways to measure success. At the same time, this transition presents significant challenges. Implementing regenerative principles often requires extensive changes in both operational processes and strategic thinking. For example, it might involve developing entirely new competencies and creating new forms of collaboration across traditional industry boundaries.

Creating as many benefits as possible

Within the food system, regenerative thinking appears to have progressed furthest. Sara Maxence, who runs the Stockholm-based innovation platform Regenerator and is an expert in food, describes it as a fundamental shift in how we view food production:

"It's about creating a long-term resilient food system that can provide us with food for many generations to come. While traditional sustainability initiatives focus on doing as little harm as possible, regenerative thinking is about creating as much benefit as possible for the ecosystem whilst producing the food we need."

According to Maxence, regenerative principles are built on several interconnected elements.

"Our future food system will be exposed to more external shocks and extreme situations going forward, such as weather disasters, price changes and war. It will then be valuable to have a resilient business, and these are built through variety and diversification."

Another important element that Maxence highlights is the local perspective:

"We hope for an increased focus on the local ecosystem as well as the creation of more regional nodes and hubs, which benefits preparedness, pricing and the joy in food if we connect consumers and producers more closely to each other."

A need for entrepreneurial courage

This change in perspective is also beginning to reach the financial world, where more and more investors are realising that future returns must be linked to the planet's wellbeing. Erika Hombert, investor at Nordic food giant Paulig's venture capital company Pinc sees such investments as the next step after "sustainability", "impact" and "green investments":

"A regenerative investment is a company whose business model is not built on extraction or destruction but infinite renewal of ecosystems and natural resources. It must also be socially regenerative, that is, sustainable for employees and those affected by the company's products or supply chains", she says.

But how do you measure something that by definition is changeable? In a world where "what gets measured gets done", this places new demands on the investor community.

"It requires both curiosity, entrepreneurial spirit and courage from investors," argues Hombert. "At the same time, there's a risk that the definition will be misused and become more of a marketing thing."

Another challenge relates to the timeframe involved. While many other investment opportunities tempt with quick returns, regenerative investments require a longer time horizon and sometimes different return requirements. But as Hombert argues:

"What is your portfolio worth at three degrees of warming? What is the risk on your properties that cannot be insured due to superstorms? What kind of society will we leave behind if we don't invest regeneratively now?"

The risk of a new concept being misused?

When speaking with those who actually work with regenerative principles in practice, the complexity becomes clear. Tomas Erlandsson of Nordisk Råvara, a Swedish company that produces specialty crops is cautious with the term "regenerative" itself, precisely because it risks being simplified and misused.

"We prefer to talk about focusing on soil health and striving towards nourishing agriculture – as opposed to depleting," he says.

Instead of fixating on a concept, Nordisk Råvara works with concrete principles: no use of synthetic pesticides, minimal soil disturbance and maximum diversity. Each grower has different conditions when it comes to soils, climate, crop rotations, farm operations and economy – there is no universal solution that fits all.

A fascinating example of how small changes can produce large effects is the company's bonus system for year-round green coverage.

"We began early with inspiring our growers towards this, and now regulations and subsidy systems have also emerged driving in the same direction. Through economic incentives, we saw how our growers increased the proportion of green soil on the entire farm by an average of 10-15 percent in just a few years. Roughly estimated, this increase has surely led to thousands of tonnes of greenhouse gas sequestration," says Erlandsson.

While experts and practitioners emphasise the importance of not simplifying regenerative principles, the emerging examples from different industries show that this type of enterprise is beginning to take concrete form. With pioneers in both agriculture and financing, the foundation is now being laid for what could become the next step in business development.

Who, then, are the next generation of regenerative entrepreneurs? Well, keep subscribing to Impact Loop and you'll get to meet some of them in more detail in our special series dedicated to regenerative founders and business people, published over the next few weeks.