As we continue to live beyond our planet’s limitations, we need to reconsider the capitalist system we live in. This entails looking beyond net-zero emissions and setting eyes on leaving a net-positive impact on the planet. It’s called regenerative capitalism, and it holds a message of hope.

In April 2021, PepsiCo announced plans to practice regenerative farming on more than seven million acres of land worldwide, the equivalent of its entire agricultural footprint. “We know we have to do even more to create truly systemic change,” said the company’s Chief Sustainability Officer Jim Andrew.

“This is pretty major,” says John Elkington, author and authority on corporate responsibility and sustainability. “It’s a bit like when Microsoft said it was going to offset its carbon emissions for its entire history as a business.”

Regenerative capitalism, a notion coined by John Fullerton in 2015, or in PepsiCo’s case regenerative farming, refers to business practices that restore and build rather than exploit and destroy. Regenerative is about viewing the goal of net-zero carbon emissions as a stop-off on the longer journey to create the conditions for life to flourish resiliently and renew infinitely.

Businesses big and small have ascribed to the principles of being participants in the sustainable, responsible economy for decades now. “To be more transparent, to report, all of that sort of stuff. To be more accountable and to engage its stakeholders in a range of ways,” Elkington says.

However, sustainability, understood as merely mitigating harm, is a Band-Aid for broader issues with our planet. The reality is the way we do business remains harmful to the world’s long-term future. We continue living beyond our planet’s limitations, wrecking the habitat in which we expect to live for centuries to come.

More radical change is needed, and regenerative capitalism could be the answer we’re looking for.

The existential crisis of the notion

The term “regenerative capitalism” sits uneasily on the tongue. “There’s a question around whether regenerative capitalism is an oxymoron,” says Louise Kjellerup Roper, CEO of Volans, a London-based think agency and advisory firm.

“To my mind, it’s an oxymoron in the US and in the Anglo-centric world of capitalism, but I had the fortune of growing up in Denmark, which is a very different form of capitalism.”

Regenerative capitalism is not a zero-sum game between profits and the planet, but a model where both can sit side-by-side.

Kjellerup Roper believes it’s possible to follow the principles of regenerative capitalism – where big business has a big role in not winding down the planet, but getting it back on an even keel – while also following the smart route to running a business.

It just requires a change in mindset and relearning some of the principles of smart business.

“Regenerative anything requires moving away from linear benchmarks, certainty and KPIs to an acknowledgment that things aren’t that simple,” she says.

In a regenerative capitalist world, there isn’t a PowerPoint slide that can save the planet. It requires a lot more deep thinking – some of which is unlikely to be that palatable to businesses focused primarily on the bottom line. “That’s the biggest challenge: to really move from that,” says Kjellerup Roper.

If responsible capitalism looks through the lens of “let’s do less harm,” regenerative capitalism realizes that business isn’t an addition to nature, but is intrinsically baked into it.

Companies may lay claim to the mantle of regenerative capitalism, while doing something that doesn’t quite fit the bill. There’s always a worry, when a new concept grips business, that it becomes little more than a buzzword.