How to Build a Regenerative Business — and Save the Planet

April 8, 2022 Stan

Opinions expressed by Entrepreneur contributors are their own.

I have always believed that if you want to change the world, you do it through business. Businesses can move faster, create products and services that genuinely do good, and most importantly, they are financially sustainable (ideally, anyway). You cannot say the same about government or nonprofits. The former is all too often beholden to lobbyists and voters, and nonprofits are dependent on grants, so the great work they can do is restricted due to funding constraints.

Unfortunately, most businesses don’t care about making a difference for people and the planet. Profit is still the number one measure of success. But whether they like it or not, consumers are now demanding businesses that do better. 73% of consumers are either in the process of or have already made changes to their consumption habits to be more sustainable.

While there are businesses already doing great things, they’ve got to stand out against those who don’t — those who still shout about their limited sustainability initiatives. If you want to use your platform to change the world for the better, you’ve got to cut through the greenwashing and help consumers see that your product or service is actually doing good. So, how you talk about your business matters.

At Ethique, we’re changing the way we present our business. (Full disclosure: I am the founder and CEO of Ethique). Ethique was once known as “the world’s most sustainable cosmetics company.” Now, we’re being more specific, because “most sustainable” doesn’t say enough. We are focused on regenerating our planet through ethical business practices.

Why the switch? Sustainability is, by definition, ensuring that what we are doing is something we can continue to do forever, and that the state of our environment won’t improve or degrade because of that activity. Sustainability isn’t about improving things.

Sustainability vs. regeneration

Sustainability only works if what currently exists is in great shape. But the reality is, we need to do a lot more than just maintain what we have. We need to rewild, reforest and rehabilitate much of our planet. The responsibility should be on businesses to do more to address this, not consumers. Why? Because businesses have a much greater impact (and frankly, have caused many of the problems we face today).

That brings us back to greenwashing. Greenwashing in business is ubiquitous. Every business has a “sustainability” page on their website where they talk about their initiatives that show they care. Planting a tree does not make up for the fact that their clothing is made of 90% plastic and will fill our waterways with microplastics every time it goes through the washing machine.

Donating 1% to charity does not offset the minimum wage they pay 50% of their team, meaning they must rely on food banks to feed their family. Going carbon-neutral by 2040 is not only too slow, but it doesn’t undo the damage done by using materials that are directly linked to deforestation.

Sustainability has now been greenwashed into something that is almost meaningless. Businesses are classified as “sustainable” if they have just one or two initiatives, like the above; unfortunately, that isn’t true.

Regeneration, by contrast, is giving back much more than we take, and it should be the new standard that all businesses work towards if we want to be part of the solution. If we want to encourage business to do better, clarifying what it is we are all trying to achieve is important. That’s where our message switch comes in.

Regenerative businesses look at the whole picture. Every business is on a journey – no company is perfect – everything we do impacts our planet. But a business that puts its responsibility to people and the planet at its core will stop making decisions that are detrimental to our environment. It won’t continue with business as usual, only implementing initiatives that look good on a banner on a website or in a brightly colored TV ad. Instead of just planting a tree for every order, regenerative businesses stop using materials in the first place that they know cause deforestation.

If we are going to improve the world through business, we need to do more than just maintaining the status quo. We need regenerative businesses.

Examples of regenerative business practices

Regeneration is a relatively new concept in the business world. It’s usually associated with farming and agriculture, but there are already some amazing examples of businesses that work to be regenerative. Patagonia is one of my favorites; every decision Patagonia makes puts people and the planet first and profit second. Is it perfect? No. That’s impossible. But it’s making enormous strides, and it is business that genuinely does good.
For Ethique, its foundations are built on being regenerative. Starting with the supply chain, the fair trade initiatives, to products and packaging (always vegan, cruelty-free, palm oil-free, plastic-free, and compostable), to the business operations, through working to minimize as many carbon emissions as possible and double offsetting the unavoidable ones. Is it perfect? No. It can always do more.

How to implement regenerative initiatives in your business

Implementing regenerative initiatives can be overwhelming, but as business leaders, we need to lead the way with bold initiatives. Business has had a large hand in creating so many of the social and environmental issues we face, so the obligation is on business that we work to remedy them.

So, how can your company implement regenerative initiatives? From my perspective, there are three main categories: product, people and processes (operations).

Products

Products are usually what businesses focus on; how the materials they are made with are sourced and processed, whether they are sustainably produced and what happens at the end of their life.
Lots of materials, such as cotton, hemp and algae, can be regenerative but are often farmed in a way that is damaging. So, the source is important, but so is the process they go through. Many are not inherently regenerative — things like plastic and other petrochemical derivatives. But these materials are handy for a lot of things and mission-critical for others. Therefore, it’s impossible to eradicate them. Still, you can put things into place that lessen their impact, like sourcing recycled materials to make them out of, rather than virgin plastic, for example.

If you want a truly regenerative product, you need to consider the entire lifecycle of your materials from growth, processing, production, and finally, disposal. If something is grown in an enormous monoculture, devoid of biodiversity, can you change these production practices to regenerative agriculture?

If the processing of the raw resource into usable material is water-intensive, can you start to recycle and treat the water, so it can go back into the environment as pristine as you took it out? Can you use non potable water in your process, then treat it, so it becomes drinkable, so you are improving something through your business processes?

Historically, as businesses, we have avoided worrying too much about what happens to the product after the customer disposes of it. A big part of the material decisions you make should consider this. It is very hard to make products out of entirely compostable materials. So, if you have no choice but to use plastic or metal, can you implement a return recycling program, or ensure the product is incredibly long-lasting, to minimize “stuff” that ends up as waste?

People

The second category, “people,” is seemingly — and very unfortunately — the last factor considered. For a business to be regenerative, all its stakeholders need to be fairly treated and fairly paid, throughout the entire supply chain. And that’s particularly rare. This is where fair trade and labor practices need to be looked at to ensure everyone is benefiting. Or that at the very minimum, no one is losing out at the hands of the business.

I talk a lot about supply chain and how I believe paying suppliers a fair price for their goods or workers a living wage is the single biggest thing a business can do to have a positive impact on people and the planet. So, this is a great regenerative initiative to start with. Why? Fair prices are the key to economic empowerment, and economic empowerment is freedom (alongside education). Encouraging team ownership in the company, again, is a way to foster economic empowerment.

By and large, businesses are enormously exploitative of people who manufacture products or produce materials. By simply being fair, that is regenerative. Supply chain decisions should also consider which choices are the best to make for the environment. Palm oil, for example, is unsustainable due to the way it is currently produced. Is it inherently unsustainable? Absolutely not. It’s the most efficient oil plant we have. But we have made its production unsustainable due to our monocropping and human rights abuses. When considering sourcing options, think about whether you can work directly with a community to produce the material, in a way that regenerates previously deforested landscapes, for example.

This is what we are trying to do with palm oil. While we don’t use it at present in any form, it is so efficient that an industry-wide, global boycott would cause a lot of harm, as we would all have to find a new, less efficient source of oil (like coconut). So, in the future, we want to work with local palm oil producers and ensure they are paid fairly, and their environment is regenerated.

Processes

Processes, or business operations, is where it gets easier to implement regenerative options.
Initiatives like tree planting — which are usually part of a businesses’ carbon offset plan — are impactful if done in a way that encourages native planting, particularly in areas that need rewilding. We started our Ethique forest on Earth Day two years ago (April 22, 2020) and so far, we’ve planted almost 400,000 trees. Not only are they native trees, planted in countries like Madagascar, in environments that have been deforested, but those trees also sequester carbon over their next 20 years of growth. Done well, rewilding is something all businesses can contribute to.

A simple option: Run your factories and/or offices with renewable energy. Depending on where you are based, it’s as simple as changing your power company. Or, you could invest in solar panels or a wind turbine. An even simpler one: Just start turning your air-con and lights off at night. You’d be surprised how many businesses don’t.

Business has the power to be enormously destructive, as we have seen the past few decades. It also has the power to be hugely positive, caring for our environment, empowering people and bolstering communities. But we need to move beyond one-off, short-term “sustainable” practices, and think bigger. We need to start fixing what we have broken for the benefit of a few and fix it, for the benefit of everyone.

The best part? Businesses with a solid purpose and regenerative initiatives are proven to be more profitable, inspire more loyalty and grow faster than their peers. Building a regenerative business might seem like a tall order, but by tackling the low-hanging fruit first, you are already making a difference. The bigger stuff can come when you’ve taken those first, easier steps, like tracing your entire supply chain, creating packaging that is genuinely home-compostable (no bioplastics!) or ditching ingredients that are linked to deforestation. These things can take years, so like the saying goes, “How do you eat an elephant? One bite at a time.”