The story of many large corporations is the story of growth from a local
business to a global business. Now, risks to brand and business value from
degenerative and wasteful practices are creating opportunities for businesses
that embark on a place-based innovation
strategy as part of their portfolio.
Many global businesses that depend upon natural ingredients (including General
Mills,
Nestlé
and
Unilever)
are exploring ways to stimulate a regenerative agricultural
system
— which will help increase crop resilience to climate change and reduce supply
vulnerability to the risks posed by biodiversity loss and the erosion of soil
health caused by industrial farming. At the other end of the supply chain, risks
to value for the incumbent corporations come in the form of circular businesses
stealing share of pocket by circulating products and materials post sale. This
is particularly obvious in the fashion industry, for example — where for many
years, fast-fashion retailers (who saw unattractive displacement revenues),
stood by as new-to-market resellers grew in market share and now threaten the
sales of the
incumbents
in key demographic segments.
Switching to circular and regenerative systems can help secure value; but
nevertheless, the business case for acting soon and the task of executing these
systems is challenging — particularly when incumbents are conservative about
their market role and want to apply traditional, industrial models of command
and control and scale-up. Innovation at the beginning and end of a value chain,
by definition, requires innovation within distributed local systems. Effective
local ecosystems of regeneration leverage the uniqueness of place and community
and work at a local economic scale. An incumbent, linear business may wish to
benefit from this circular infrastructure but may not want to take on the risk
and cost and be deeply involved in operating a business it isn't familiar with.
You need others to step in.
When we reference effective, regenerative systems such as forests, we see that
no single actor can as effectively circulate and regenerate value as a system of
different actors working together. Equally, diversity is key to effectively feed
off the value that regen ag or circular product systems offer. To unlock a
self-sustaining, regenerative local system, an ecosystem of co-beneficiaries
invested in the place and bound by a system of co-benefits is required. So, how
might we catalyse that in an effective way — maximising benefits and minimising
risks?
The SB Resilience Summit
Join us for the inaugural SB Resilience Summit (October 17) at SB’24 San Diego — where business leaders preparing their organizations for adaptation and resilience in a tumultuous world will share insights on proactive measures organizations can take now to navigate uncertainty, mitigate risk, ensure continuity and future-proof their businesses.
Adopting a multi-capital
approach
to circular ecosystem design enables designers to see and develop the link
between the regeneration of natural capital or manufactured capital and the
importance of regenerating human and social capital. For example, a social
platform that enables the connection of people to people (discovering, learning,
empowering); people to place; people to nature’s abundance; and people to craft
and culture (designing and making stuff) is a great way to build an ecosystem of
actors invested in the regeneration of natural capital or manufactured capital.
For example, a fashion ecosystem might bring together local
customisers/upcyclers, repairers and
resellers
(ex: the RCA’s Regenerative Fashion
Hub);
in food — perhaps organic food producers, regenerative
farmers,
local residents and eco-developers. A social platform helps create the enabling
conditions for regeneration through the stimulation of market demand, investment
and innovation. Building a place-based social platform that allows for the
regeneration of social value can create a completely different way for
regenerative systems to compete with the incumbent, linear systems of industrial
agriculture or fast-fashion culture — a model that allows those emergent,
regenerative systems to compete for the citizens’ (and other relevant parties’)
attention and investment.
As well as potentially securing future value chains or growing your slice of
circular pie by growing the circular pie, regenerating places responds to a
growing social need. When so many of our experiences as consumers are
transactional — driven by remote, globalised systems or isolated within digital
media — local goods and services platforms have the potential to address these
structural deficits in our lives if they can be a vehicle for more social and
relational ways of interacting, co-creating and discovering in a community
setting. It’s through the social setting — a place to interact with and
appreciate local people, culture, craft and collaboration — that we can build
more of a system for circularity and regeneration; the social platform is a
Trojan Horse for regeneration.
As brands are increasingly under pressure to be ‘net
positive’
— more regenerative than degenerative across natural, social and human capitals
— social licence and brand value is on the line; and brands that produce a
surplus of social value will in turn produce a surplus of brand value. This is
backed up by a recent report from
Accenture
that highlighted people’s growing need for connection to others and looking
after places. A brand that can help people feel connected to supporting social
purpose would be rewarded by growth in its social licence.
At Regenovate, we passionately believe that we
need to find a different way to activate these systems than the traditional
top-down or one-size-fits-all model beloved by global corporations. This is
about making systems that work at a local and global scale. It’s scaling deep in
a few places to figure out the enabling conditions for a social platform that
can be replicated elsewhere. It’s a classic case of being entrepreneurial —
being open to new roles in the market and following value in your regional
business ecosystem, rather than blindly following the past.
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Published Apr 23, 2024 2pm EDT / 11am PDT / 7pm BST / 8pm CEST