Beyond Sustainability: Why Businesses Must Become Regenerative

The planetary boundaries framework identifies nine critical processes that regulate the stability and resilience of the Earth system. Its 2023 scientific update found that 6 of the 9 boundaries had already been transgressed, including those related to climate change, biosphere integrity, freshwater change, land-system change, biogeochemical flows, and novel entities such as synthetic chemicals (Richardson et al., 2023). Crossing a planetary boundary does not imply that immediate collapse will occur. It does indicate, however, that humanity is moving beyond the environmental conditions under which societies and economies have historically developed and prospered.

Against this backdrop, corporate sustainability has traditionally been built around a relatively straightforward ambition: reduce the negative impacts associated with doing business. Use less energy. Emit less carbon. Consume less water. Generate less waste. Improve efficiency. This approach has delivered important progress. Companies have developed increasingly sophisticated tools to understand and reduce their environmental impacts. One example is the Marginal Abatement Cost Curve, or MACC: a strategic tool used by businesses and policymakers to compare the cost of different emissions-reduction initiatives against the volume of greenhouse gases they can eliminate. Tools like this have helped companies quantify their emissions, identify reduction opportunities, and establish measurable commitments through frameworks such as net-zero targets and the Science Based Targets initiative. 

These developments are necessary, but they are no longer sufficient. Climate change and ecosystem degradation are no longer external concerns. They directly affect companies’ ability to access resources, maintain operations, serve customers and generate long-term value. This changes the question business leaders must ask. Instead of “how can we reduce our negative impact?” we must also ask: “how can our business help restore and strengthen the systems on which it depends?” or “ How can we operate based on a regenerative economy model? 

Sustainability, Regeneration Are Not the Same

I recently participated in the IETA Latin America Climate Summit in Monterrey. During a panel discussion, I asked the audience (mostly professionals working in sustainability and carbon markets) whether they knew the difference between a sustainable economy and a regenerative one. Only one person out of approximately 40 raised their hand. That moment made something very clear: before businesses can adopt regenerative practices, we first need to build a shared understanding of what regeneration means and how it differs from simply reducing negative impacts. 

The most widely recognized definition of sustainable development comes from the 1987 Brundtland Report, which described it as development that meets present needs without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development, 1987). Sustainable companies seek to reduce emissions, use resources more efficiently, improve labor conditions and minimize negative externalities. The regenerative economy begins with a different level of ambition. Rather than focusing primarily on maintaining existing conditions or slowing their deterioration, regeneration seeks to restore the capacity of natural and social systems to renew, adapt and thrive.

A sustainable company might reduce the amount of water used in its factories. A regenerative company would also consider how its operations and investments could contribute to restoring the watershed from which that water comes. A sustainable technology company might recycle electronic waste. A regenerative business model would go further by extending product life, developing repair capabilities, recovering valuable materials, creating skilled employment and expanding access to affordable technology like Reducto Mx. Regeneration does not replace sustainability; it builds on it.

Regeneration creates opportunities for innovation. It can lead companies to develop models based on repair, reuse, refurbishment, remanufacturing, renewable materials, bio-based products, agroforestry and nature-based solutions. The circular economy already demonstrates how recovering products and materials can reduce waste, lower exposure to volatile commodity prices and create new revenue streams. Regeneration expands this idea by asking whether circular activities also improve environmental and social conditions. A product may be circular because it is reused but becomes more regenerative when its reuse also reduces extraction, creates local technical skills, generates quality employment and improves access to goods or services.

Companies are exposed to climate change because no business operates independently from nature or society. Extreme weather damages infrastructure and interrupts logistics. Social and economic inequality can weaken local markets, destabilize communities and erode trust in institutions. Every company depends on some combination of water, energy, land, materials, workers, suppliers, infrastructure, functioning communities, and institutional stability. When these systems become less resilient, the company becomes less resilient as well. This is why regeneration should not be interpreted only as an environmental responsibility. It is also a strategy for protecting business continuity, with resilience creating long-term value.

Regenerative Economies Create Multiple Forms of Value

Regenerative thinking expands the definition of value. A regenerative project can generate financial returns while also improving carbon sequestration, water security, community income and supply-chain resilience. These benefits are interconnected. A financially resilient producer can become a more reliable supplier. A restored watershed can strengthen water security for communities and businesses. A repaired product can avoid waste, preserve the value of existing materials, and reach a customer who may not be able to afford a new one. Regeneration therefore challenges companies to evaluate success not only according to the value captured by the organization, but also according to the value created across the broader system.

Measuring this value requires companies to move beyond conventional indicators such as carbon emissions, energy consumption, water use, and waste generation. Regenerative outcomes are often multidimensional, location-specific and visible only over extended periods. Their measurement therefore requires ecological and social baselines, territorial indicators and long-term monitoring rather than a single global metric. This is where specialized project developers can play a critical role. They can help companies translate regenerative ambitions into locally grounded interventions, measurable outcomes, and credible monitoring frameworks.

However, measurement is only part of the challenge. In my view, the most significant obstacle is that regeneration cannot remain confined to the sustainability department. It must influence procurement, finance, operations, product development, innovation, risk management, human resources, and every other function involved in shaping how the business creates value. A company does not become regenerative simply by financing a nature-based solutions project (such as conservation or ecosystem restoration) while its core business continues to rely on extractive or degrading practices. The transition becomes meaningful when environmental and social renewal begin to influence how the company designs its products, chooses its fleet, selects and supports its suppliers, manages its operations, and allocates capital.

Success Story: Natura 

Brazilian cosmetics company Natura offers a valuable example of how regenerative principles can be incorporated into a company’s value chain. The company has developed products that use ingredients derived from Amazonian biodiversity while building long-term commercial relationships with local communities, cooperatives, and small producers. But what makes the model relevant is not simply the use of natural ingredients. Natura’s approach connects biodiversity, traditional knowledge, product innovation, community income, and forest conservation. The Amazon is not treated only as a source of raw materials or as a separate philanthropic cause. It serves as an innovation platform and a central component of the company’s sourcing and product strategy (Natura &Co, 2022).

According to the Ellen MacArthur Foundation, Natura’s supply chain has incorporated approximately 40 types of biodiversity-based ingredients and involved around 7,000 families in the Amazon region. The model seeks to create economic value from the standing forest, giving communities an alternative to activities associated with its destruction (Ellen MacArthur Foundation, 2021). The company has also linked its growth and financing strategy to this model. In 2024, IDB Invest supported a sustainability-linked bond focused partly on the development of bio-ingredients from Amazonian socio-biodiversity. The International Finance Corporation also invested in financing intended to support Natura’s sourcing and development of Amazonian bio-ingredients, as well as related manufacturing and distribution infrastructure (IDB Invest, 2024; International Finance Corporation, 2024).  In a separate initiative, Natura, the Brazilian Fund for Biodiversity, and VERT developed the Amazônia Viva Financing Mechanism. The mechanism was designed to improve access to finance for cooperatives, traditional communities, and family farmers participating in the Amazon socio-biodiversity economy (International Finance Corporation, 2024).

These initiatives demonstrate an important feature of regenerative business: environmental and social outcomes are not positioned exclusively as donations or compensation for negative impacts. They are connected to product development, sourcing, supply-chain resilience, investment, and growth. Natura was able to illustrate how a company can begin moving from an extractive economy toward a model in which business value is increasingly linked to biodiversity, forest conservation, and local economic participation.

References

Ellen MacArthur Foundation. (2021). Creating a Regenerative Economy in the Amazon Forest: Natura Brazil.

Hahn, T., and Tampe, M. (2021). “Strategies for Regenerative Business.” Strategic Organization, 19(3), 456–477.

IDB Invest. (2024). IDB Invest Supports Natura in a Sustainability-Linked Bond Focused on Bio-Ingredients from the Amazon.

International Finance Corporation. (2024). IFC Invests in Natura’s Bond to Improve Sourcing of Bioingredients from the Amazon.

International Finance Corporation. (2024). IFC Invests in Natura’s Financial Mechanism to Strengthen the Socio-Biodiversity Economy in the Amazon.

Natura &Co. (2022). Natura &Co Latin America Integrated Report 2022.

Reuters. (2024). “Can the Bioeconomy Help Save the Amazon from Deforestation?”

Richardson, K., Steffen, W., Lucht, W., et al. (2023). “Earth Beyond Six of Nine Planetary Boundaries.” Science Advances, 9(37).

Salonen, K., et al. (2025). “Emerging Regenerative Business Paradigm: Narrative Review, Synthesis and Research Agenda.” Journal of Circular Economy.

Visnjic, I., Monteiro, F., and Tushman, M. L. (2025). “Sustainability as a Business-Model Transformation.” Harvard Business Review.

Winston, A. (2024). “Embracing Business Practices That Actually Improve the World.” Harvard Business Review.

World Commission on Environment and Development. (1987). Our Common Future. Oxford University Press.