Nick Natrella writes on why, as late-stage capitalism move away from notions of fairness, reimagining the economy as one based on shared value is the only way forward, and why Value-for-All is at the heart of the Positive movement for regenerative business.
Strength in Numbers
Historically, the proponents of radical change have been dismissed and suppressed by the loyal voices of the status quo, exclaiming “that’s just the way things are”. However, as history tells us, all that which comprises society today sprouted from peoples’ determination to not accept things the way they are. No matter how noble the cause, whether it be the fight for women’s suffrage, or the civil rights movement, the leaders of these movements were actively undermined by pro-establishment forces. This is evidenced by a Gallup Poll which showed that, even as late as 1966, around two thirds of Americans had an unfavourable view of Dr. King. Although we see the same forces at work today, demonising environmentalist struggles and underplaying this late-capitalist system’s role in climate devastation, we must find strength in the collective. Had it not been for collaboration between the vast array of organisations, committees, and groups, which upheld these movements, we would not have the rights we enjoy today.
This is why Partners cannot be understated as an indispensable point on the Positive compass; a philosophy which promotes healthy supply chains, shared value, and radical collaboration. Of course Partners could not exist without adherence to the other points of the Compass: Planet inspires ideas of zero-waste, harmless production, and net-zero emissions, People promotes good governance and human wellness, and Places is all about community engagement, fair tax, and positive impact. With a Transformational Purpose at the centre, the Positive Compass guides us to a bright future.
Creating Value for All
The philosophy behind Partners is rather simple: in this globalised world we all are dependent on one another, and recognition of this should lead us to establishing a fairer system which truly creates value for all, rather than ignite a race to the bottom in terms of wages, worker’s rights, and environmental regulation. With a holistic mentality, we can move from the low-skill, low-pay, low-value-added trap associated with global supply chains, and build value webs & cycles which reconstruct globalisation as a means of development and shared prosperity. By establishing Partnerships in value webs & cycles, businesses can collaborate in their social and environmental endeavours, widening their impact across borders. There is no place for the winner-takes-all philosophy of late-stage capitalism in the Regenerative economy; unless we begin to change the dynamics of the global economy, the world will continue to be plagued by conflict, environmental destruction, and extreme poverty.
How Globalisation Deceived Us
The word “globalisation” evokes ideas of international collaboration, opportunity, and shared prosperity, however, the reality has been very different. Global economic integration was supposed to lift the world’s poorest out of extreme poverty, fusing export-oriented growth and knowledge transfers, with crucial foreign direct investment. However, this theory lied on the assumption of free movement of both labour & capital, minimal trade barriers, absence of economic crises, and a fair distribution of productivity gains. Instead, globalisation’s course has been thwarted by the vested interests of international actors.
Free movement of labour remains a dream for many, with millions risking their lives at sea to achieve a better life. However, the movement of unaccountable capital is a key feature of this global system, seeking profit maximisation without consideration for workers’ rights or environmental costs. Hence, we have nations attempting to undercut each other on pay & regulation in order to attract much-needed investment.
Protectionism remains prevalent across the developed world, quashing low-income countries’ hopes of achieving export-led growth as a means of development. The most prominent example is how EU and US agricultural subsidies create artificially low prices, hitting the profits of agriculture exporters which seek revenue to invest in mechanisation and lower their costs of production.
Recurring economic shocks coupled with poor policy recommendations by the IMF and World Bank have further entrenched nations in the development trap. The IMF Structural Adjustment policies failed many nations, however one of the more shocking examples was in Cote d’Ivoire. Liberalisation of the cocoa and coffee sectors caused severe economic hardship and led to the expansion of child labour, while harsh cuts to government expenditure resulted in declining quality of education and healthcare provision.
As for productivity gains, the onslaught of neoliberal policies in the 1980s, such as tax cuts for the wealthiest and the attack on unionisation, has seen the transfer of an increasing share of profits into the owners of capital. From 1979 to 2009, productivity rose by 80%, however the income of the bottom fifth fell by 4%, while the income of the top 1% rose by 270%.
Understanding the global economic system, and how it has been manipulated by rogue forces, is fundamental to helping us create a fairer system which works for all.
Regenerative Sourcing
Regenerative businesses understand their impact goes beyond their four walls, and by establishing closer relationships within global value webs they can welcome others into their mission for social & environmental justice. If we are to leave the value-added dogma of supply chains today, we must adhere to the 3 fundamentals of Regenerative Sourcing:
Net-zero GHG emissions (may entail carbon-offsetting initially)
Restoration of ecosystems & increasing biodiversity in key biomes
Creation of safe, fair livelihoods for all
One of the clearest examples of the harmful dynamics of modern supply chains is the situation surrounding coltan deposits in the Congo. Although Congolese coltan mines used child labour and sparked conflict which killed millions, the mineral still found its way into mobiles phones, computers etc. produced by Western MNCs. However, the company Fairphone has demonstrated the potential of Regenerative Sourcing in tackling the situation. Setting up frameworks to identify social & environmental risks associated with the minerals in their devices, all in collaboration with organisations and institutions which share their interests.
As smart devices, renewable energy, and electric-powered vehicles become more widespread, the demand for such materials will only increase. We cannot afford to have a repeat of events in the Congo, hence why we need to begin a standardisation of Regenerative Sourcing practices and demand complete transparency in terms of how all components are procured. With the rise of institutions such as the EITI (Extractive Industries Transparency Initiative) and diligent businesses like Fairphone, we know it is possible to replicate this work across all industries.
Value Webs & Cycles
We must leave behind supply chains and establish value webs, where we engage with Partners to create shared value. This transformation redesigns relationships between Partners and paves the way for collaboration in achieving transformational purposes. A core element of the Regenerative economy is the rise of companies creating innovative solutions out of waste products from this dated “take-make-waste” model. By establishing a closed-loop system we can drastically reduce our waste output while simultaneously decreasing the need to extract new materials.
Houself, a French eco-construction company, are demonstrating the environmental & financial benefits of scrapping single-use materials. They have created Partnerships with producers of second-hand construction materials which help them deliver a variety of services from designing & constructing eco-homes and biodynamic gardens, to conducting thermal performance studies.
Back here in the UK we can also see changemakers making profitable businesses out of environmentally-motivated initiatives. Geneco, a Bristol-based business tackling food waste, is using biofuel powered vehicles to collect food waste which is then used to create renewable energy and biofertilisers. Although only kicking off in 2017, Geneco have already recycled over tonnes of food waste.
As environmental regulations are beginning to catch up with the times, ordinary businesses are searching for ways to clean up their act. This is where Regenerative businesses make their entrance, offering unique services powered by transformational purpose and the most forward-thinking minds of our time.
More Than Financial Value
Recognition that value encompasses more than something’s price or cost is integral to reinventing the way we do business. This is why we must consider Roland & Landau’s 8 forms of capital: financial, material, natural, social, cultural, intellectual, experiential, and spiritual. By understanding that our impact on individuals and communities goes beyond finance, we can respect, protect and build all forms of capital to ensure long-term prosperity.
With cutting-edge studies in fields from cultural studies to environmental economics, we are constantly learning what constitutes happiness & quality of life. This enables us to better measure our impact and find real solutions that exceed financial compensation. Fusing this knowledge with state-of-the-art environmental engineering and technological solutions, we are ready to create a new world from which the Regenerative Economy can take form.
Building Our Future, Together
Radical collaboration is at the core of all this transformation. Whether it be working closely with suppliers to minimise your impact, or sharing invaluable industry insights & breakthroughs, the Regenerative Economy will be built through collective effort. Like any movement fighting the status quo, change can only be achieved through sustained cooperation and pure determination. Already, Regenerative businesses are proving that profit and exploitation are not two sides of the same coin. These businesses are giving way to a new world; a world where we restore our balance with nature; where we recognise everyone’s right to live safely, free from exploitation; a world where Value for All is a fact of life.