Dr. Norman Dytianquin

Abstract:

As an emerging concept in economics and business, regeneration straddles the blurred lines between allied concepts of sustainability and the circular economy. Whereas sustainability is about the balance of the so-called triple bottom line, and whilst circularity progresses a step further by looping back waste as inputs to the production process, the regenerative economy and business models promote ecological integrity by ensuring planetary provisions and societal wellness. This is done through its replenishment or restorative or rebuilding function. Replenish means to fill again what has been used up, restore is to put or bring back to an original state while rebuild is to reconstruct something that has been damaged or destroyed. The latter two terms of restoring and rebuilding have common elements though with the other Rs of the circular economy such as repairing, refurbishing, or remanufacturing, where some form of restoration and rebuilding transpires. Replenishment therefore is the more appropriate eleventh R added to the 10 Rs of the circular economy comprising Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle and Recover introduced by Potting & Hanemaaijer (2018).

The need to replenish resources is crucial due to the limits on production imposed by the earth’s carrying capacity. In ecological terms, carrying capacity is defined as the maximum number of a species that can sustainably live or thrive in a given area.  In other words, a population’s carrying capacity is the size at which a population can no longer grow due to the lack of supporting resources. The carrying capacity is defined as the environment's maximal load,whichin population studies correspond to the population equilibrium, when the number of deaths in a population equals the number of births (including immigration and emigration).  Hence, it is imperative to transcend circularity that reduces waste to regeneration that warrants that the planet’s carrying capacity is not breached.

As for regenerative business, this paper uses the concept of business models with respect to the elements of a business model proposed by Richardson (2008), Teece (2010), and Osterwalder & Pigneur (2005, 2011) comprising value proposition (marketing), value creation (R&D and production), value delivery (supply chain and logistics) and value capture (finance). The sustainability dimension to business models were introduced by Bocken et al. (2014) with eight archetypes classified into three groupings of mechanisms and later expanded on by Clinton and Whisnant (2014) with 20 distinct sustainable business models grouped into five categories, and Toth (2019) with 15 sustainable business movements. Using this conceptual framework, this research will use a qualitative approach of selected case studies of regenerative business models juxtaposed with circular business models to showcase the differences using environmental, social, and economic indicators.  The case studies of 60 enterprises cover two highly polluting sectors —fashion and construction — in three countries, namely, the Netherlands, France, and Germany, which are among the top EU polluters in both sectors. The methodology involves scoring the case companies using multi-criteria decision analysis (MCDA) where the sustainability indicators serve as criteria to produce an overall triple bottom line (TBL) score (for people planet and profit) following Elkington (1994) that represents balanced sustainability. 

A conclusion on the benefits of regenerative versus circular economy business models in terms of the triple bottom line will be made with some policy implications drawn, using lessons learned from the case studies including improvements in materiality indicators needed to measure the concept of regeneration. Overall, regenerative business models reveal more balanced sustainability in almost all case companies compared to circular models due to value creation across the entire chain from upstream suppliers to downstream consumers.