Regenerative business models: a conceptual framework

Abstract

The current economic system is degenerative, exploiting people and the environment through unsustainable practices, which has significantly weakened the planet’s regenerative capacity. With six planetary boundaries now exceeded, businesses need to move beyond sustainability toward regenerative business models. Unlike sustainability, which focuses on minimizing harm and maintaining balance, regenerative business models seek to create net-positive impacts by actively improving planetary health and societal well-being. Originally rooted in biology, the concept of regeneration remains underexplored in the context of business models. The fundamental components, principles, and characteristics of regenerative business models are still undefined. Although an increasing number of companies have established regenerative strategies, it is unclear if truly regenerative business models exist. This paper aims to address this gap by integrating concepts from multiple disciplines to develop an initial conceptual framework of value exchange systems for regenerative business models. This paper argues that regenerative business models require value exchange activities that generate net-positive impacts on the firm and stakeholders (including the natural environment and society), and leave the planet, society and economy system healthier over time. The framework introduces two new components, i.e., value enhancement and value replenishment, as important activities for value regeneration. The framework suggests that a regenerative business model describes a firm’s value proposition, how the firm creates and delivers value for its stakeholders in a way that continuously enhances stakeholders’ well-being, and how the firm captures value from its stakeholders in a way that continuously enhances stakeholders’ well-being, and how the firm captures value from its stakeholders in a way that replenishes firm’s resources and capabilities to improve planetary and social health.