Investing in the Regenerative Economy: A Blueprint for the Future
Practical Steps to Actively Shape the Transition to a Regenerative Economy as an Investor
For decades, the principle was: as long as it’s green. Companies that reduced their emissions, lowered their water consumption, or switched to recycled paper were considered sustainable. However, this way of thinking has a dangerous limitation: it is oriented toward the status quo and attempts to minimize the damage that our economic system causes anyway. In an era of multiple planetary crises, this is no longer enough. “Less destructive” is not a viable model for the future. What we need are companies that actively repair, restore, and set new regenerative standards.
The regenerative economy thinks in cycles instead of lines, in relationships instead of resources, and in viability instead of short-term output. It’s not just about avoiding CO₂ emissions, but about building healthy soils, promoting biodiversity, strengthening social systems, and developing economic models that respect planetary boundaries. Regeneration is not a subset of sustainability — it is a radical shift in perspective.
Examples of this way of thinking can already be found in practice: Companies like Notpla (biodegradable packaging based on algae), InPlanet (carbon sequestration through regenerative agriculture), or Terraformation (reforestation as a business model) show how economic success can go hand in hand with active renewal. Investors are also beginning to recognize this potential: According to a report by CapShift [1], interest in “regenerative investing” is growing significantly in family offices and impact funds.
Investors have one of the most powerful levers in economic transformation. They decide which technologies scale up, which business models expand, and which markets emerge. Those who invest in regenerative business models today do so not only from moral impulse, but from smart strategic foresight: these companies are more resilient, more adaptable, and better equipped for a world where planetary boundaries represent both investment risks and market opportunities.
Regeneration is the operating system of the next economic era. The transition is already underway. The question is not whether, but how quickly capital will transform. Those who understand early what matters secure not only impact, but also competitive advantages.
1. Reframe: Why Regeneration is More Than ESG
The investment world is full of acronyms. ESG, SDGs, CSR — they all promise to make responsibility and impact measurable. ESG (Environmental, Social, Governance) in particular has established itself as a standard: companies are evaluated, ranked, and reported on based on clear criteria. But for all its structure: ESG remains fundamentally reactive. It asks how great the damage is, not how great the opportunity would be to improve the system. It measures risks, not potential. That’s no longer sufficient.
The difference between ESG, sustainability, and regeneration is not just semantic, but systemic. ESG focuses on minimizing negative impacts. Sustainability (or impact) goes one step further and seeks balance between ecological, social, and economic interests. Regeneration, however, sets a different starting point: it doesn’t ask how to cause less harm, but how to actively heal, restore, and create new systemic value. It thinks from the desired state, not from the deficit. And that’s exactly what changes how we must talk about impact, value, and growth.
This becomes particularly clear in regenerative agriculture: Instead of exploiting soils through monocultures, regenerative farmers build up humus, sequester CO₂, improve biodiversity, and make agricultural systems resilient to climate shocks. The result: fewer external dependencies, higher yields, long-term soil fertility — thus genuine economic added value.
Applied to other industries, this means: regenerative business models don’t just create output, but capacities. They strengthen social bonds (e.g., through community ownership), preserve natural resources (e.g., through circular systems), or develop new forms of infrastructure (e.g., through decentralized energy networks). This creates a different kind of return: more long-term, more integrative, more future-viable.
The Capital Institute calls this the “Regenerative Economy Framework” [2]: eight principles oriented toward living systems. These include the principle of mutual interdependence, timely feedback, and holistic decision-making. Investors who work with this framework of thinking recognize more quickly which start-ups have not just a scalable product, but unleash system-changing impact.
It would be a mistake to understand regeneration merely as “next level ESG.” It’s not about more KPIs, new standards, or better ratings. It’s about how we define economic success. Regenerative companies are not niche solutions, but prototypes for tomorrow’s economy. For investors, this means: those who redirect now are not opting out of the return logic, but entering into a model that inseparably connects value and impact.
Recognizing Regenerative Business Models
Not every start-up that calls itself “sustainable” actually thinks regeneratively. To make sensible decisions as an investor, it’s not enough to rely on labels or ESG scores. Regenerative start-ups are distinguished not by their communication, but by their business model. Those who look more closely recognize three central characteristics that structurally differentiate regenerative companies from conventional ones: they are net-positive, circular, and systemic.
Regenerative companies don’t just leave less damage behind, they actively generate benefit. This involves not only ecological aspects like CO₂ sequestration or biodiversity, but also social factors like community orientation or community building. A prime example is InPlanet: The start-up uses rock dust-based silicate weathering to permanently bind CO₂ in soil while simultaneously improving soil fertility in tropical regions. Their model is based on local impact and global climate effect. CO₂ trading is just a vehicle; the regeneration of ecosystems is the goal.
Another hallmark of regenerative start-ups is the design of closed material cycles. This means: products, processes, and materials are designed so that they are reusable, biodegradable, or returnable without downcycling or externalities. A well-known example is Notpla, a British start-up that manufactures packaging from algae and plant extracts. The products dissolve completely without residue after use and replace conventional single-use plastics entirely without microplastics and waste.
Important here: the circularity is not just a sustainability feature, but part of the business case. Raw material independence, declining disposal costs, regulatory advantages are hard economic arguments that make regenerative start-ups more resilient than linear models.
Regenerative business models think not just in terms of products or markets, but in systems. They recognize interdependencies, use leverage effects, and often work with partners to change entire value chains. This distinguishes them from many green start-ups that merely want to make existing products “better.” An example of this is Frosch (by Werner & Mertz), a brand that consistently integrates regenerative principles into its business model. Frosch relies on closed material cycles by systematically collecting, recycling, and using plastic waste as secondary raw materials for new packaging. Instead of finite raw materials, the company uses surfactants from renewable plants. It’s not about a single product, but about comprehensive systemic change in the sustainable production of household cleaners.
Investors should not regard regenerative start-ups as “greener” investments, but as entrepreneurial responses to profound systemic challenges. Their business models are based on a different logic: they create value by bringing systems back into balance. Those who recognize this difference are not investing in a good conscience, but in tomorrow’s business models.
Reassessing Risk
Traditional risk models are based on the assumption that proven business models, stable markets, and regulatory continuity provide security. But this assumption is crumbling. The climate crisis, geopolitical tensions, supply chain disruptions, and social upheavals are changing the rules of the game radically and irreversibly. What was considered “safe” yesterday is increasingly risky today. The real danger for investors therefore lies not in the failure of innovative pioneers, but in persisting with seemingly proven structures that can no longer keep pace with reality.
Capital that relies on linear models, high externalization, or fossil foundations has long been exposed to creeping value loss: whether through regulatory adjustments, reputational risks, or simply through declining demand. BlackRock has repeatedly emphasized in its Sustainability Investment Statement [3] that climate risks are now also investment and market risks. The Economist speaks in its Climate Risk Report [4] of an “epochal shift” that doesn’t leave even conservative portfolios untouched. This means investors who don’t act today are betting on the status quo and underestimating the exponential dynamics of ecological and social transformation.
In an environment of permanent uncertainty, it’s not short-term return optimization that gains importance, but long-term resilience and adaptability. Regenerative business models are often less volatile than they seem because they address structural causes of crises. A portfolio that focuses on regeneration invests in future markets, robust supply chains, and social stability.
This doesn’t mean that pioneer investments are risk-free. But it means that risk is managed more consciously: through diversification along systemic impact logics, through new forms of due diligence, and through a different understanding of value.
The real danger doesn’t lie in investing in new solutions, but in missing the transformation. Those who understand risk only as potential loss compared to the status quo ignore how much this status quo has already shifted. Regenerative investments are therefore not a bet on a distant utopia; they are a pragmatic step toward resilient portfolios in a fundamentally changing world.
2. Redirect: Strategically Realigning Capital
Regenerative investments don’t begin with screening startups, but with an honest self-examination: What should my capital stand for? Those who don’t define for themselves what they want to achieve end up investing only reactively. The first step toward strategically aligned capital is therefore a clear value definition. It serves focus, because without it, the necessary coherence between investment decisions, portfolio management, and risk management is missing.
More and more investors recognize that ESG filters alone fall short when you want to achieve real transformation. Instead of making small corrections to existing models, what’s needed is a realignment around the question: What problem do I want to help solve with my capital? This could be protecting biodiversity, building climate-neutral industries, or social resilience in post-fossil economies. What’s decisive is not breadth, but the sharpness of the profile. Because only those who know what they don’t do can meaningfully concentrate resources.
An example of this new strategic clarity is provided by Trellis with their biennial State of Sustainability Profession Report [5]. It shows that companies and investors who operationalize their impact goals — that is, define concrete, verifiable criteria — achieve not only higher impact, but also more stable financial results.
A central tool on the path from vision to implementation is developing impact investment theses. These define under what conditions an investment is both impactful and economically sensible. Such theses replace diffuse sustainability promises with verifiable assumptions about markets, technologies, business models, and societal levers. They help systematically recognize opportunities and avoid misguided investments.
Institutional pioneers like Blue Horizon have long worked with such frameworks. They define sectors, impact logics, and exit scenarios along clear impact goals. Combined with due diligence processes that treat impact not as an afterthought but as a strategic dimension, this creates a robust decision-making framework.
Ultimately, it’s about not allocating capital, but strategically positioning it. Those who want to help shape the regenerative economy must help determine the direction — and that begins with one’s own values.
Integrating Impact Dimensions into Due Diligence
Traditional due diligence primarily evaluates market potential, team quality, technological differentiation, and business model scalability. But this perspective falls short. Investors who want to truly identify future-ready companies must include a new dimension: Impact fitness. It asks not only how scalable a business model is, but whether it is viable long-term, resilience-enhancing, and socially legitimizable.
This isn’t about soft factors, but about strategically relevant risk dimensions: How dependent is the company on finite resources? Which systemic tensions does it address, or does it even amplify them? Is impact an integral part of value creation or merely an add-on? Those who ignore these questions overlook central indicators of entrepreneurial robustness.
To make impact and sustainability measurable and comparable, structured approaches are needed. One such tool is our own Lean Impact & Sustainability Assessment. It helps investors systematically examine startups for their “future-readiness” — their ability to survive under changing market, political, and environmental conditions. The framework combines elements from strategy, systems thinking, and impact logic and translates them into testable criteria such as:
- Problem relevance and stakeholder fit
- Impact incentivization in the business model
- Climate resilience and resource utilization
- Governance, team competencies, and values
- Data capability for ESG/CSRD/SFDR reporting
The goal is an integrated perspective where impact is recognized as a lever for risk minimization, differentiation, and long-term performance. This is exactly what initiatives like Impact Frontiers demand, supporting investors in building dual performance models.
This expansion is particularly relevant for early-stage investors. Precisely in pre-seed and seed rounds, reliable financial data is often lacking. Those who instead examine impact potential, problem-market fit, and structural resilience can identify innovation leaders early and secure access to those business models that not only scale economically but are also socially needed.
The integration of impact into due diligence is therefore a strategic advantage. It sheds light on those blind spots that often remain invisible in classic analyses and helps investors deploy capital consciously and future-ready.
From Industry Focus to Impact Focus
Traditionally, investors structure their portfolios by industries, technologies, or geographic regions. In the regenerative economy, however, an additional strategic organizing framework is needed: impact categories. Because those who want to finance systemic renewal must understand where and how their capital should work: for example, in the areas of soil fertility, water cycles, or social cohesion.
Such a shift in perspective enables a new kind of diversification. Instead of merely spreading risks, targeted investment is made in complementary levers for regeneration, e.g., in agricultural platforms for soil recovery, technologies for water reuse, or social infrastructures for strengthening communities.
Exemplary Impact Categories and Associated Investments
- Soil regeneration: Companies like Regen Network or Agreena focus on monitoring and compensation models for regenerative agriculture. They offer investors access to carbon credits and simultaneously an infrastructure for systemic scaling.
- Water restoration: Startups like Epic Cleantec develop decentralized water treatment systems for cities. They address both resource scarcity and regulatory pressure in urban spaces.
- Social cohesion: Platforms like Neighbourly or Commonplace strengthen local resilience through participatory processes. They link impact at the community level with data-driven governance — an increasingly relevant factor for ESG-compliant real estate and infrastructure investments.
The decisive advantage of such impact-based portfolio architectures lies in their synergy effects. Investments in regenerative agriculture can, for example, lead to CO₂ certificates that simultaneously function as assets in a climate tech fund. Projects for social resilience can increase the acceptance and stability of energy or infrastructure investments in regions.
This systemic linking of investments strengthens not only impact depth, but also economic performance. It reduces dependencies on individual markets, opens up new markets, and simultaneously creates narrative connectivity — an often underestimated factor in follow-up financing and exit strategies.
Designing portfolios along impact categories means understanding capital as a lever for systemic co-creation. It is an invitation to think about investment in ecologically and socially networked terms and thus act more robustly, relevantly, and future-ready.
3. Regenerate: Strengthening Ecosystems Instead of Individual Bets
The assumption that early investments are sufficient to advance the regenerative economy falls short. In complex, systemic markets, many promising ideas fail not due to lack of capital, but due to missing support infrastructure: know-how, networks, operational excellence. This is exactly where impact accelerator programs and venture building modelscome in. They expand the classic investor understanding to include the role of co-creator and work where markets are still incomplete or emergent.
Regenerative business models are characterized by high interdisciplinarity, regulatory uncertainties, and long impact time horizons. Many classic early-stage investors shy away from this complexity or demand traction-based evidence that often only emerges late in regenerative startups. Those who want to be involved early must be ready to co-build rather than just observe.
Venture studios like Zinc VC in Great Britain or Carbon13 deliberately focus on systemic challenges like climate change or social inequality. Besides capital, they also provide targeted methodology, founding teams, expert networks, and structured venture building processes. In Germany too, formats with impact focus are increasingly emerging that specifically promote social and ecological founding ventures.
Our previously described Lean Impact & Sustainability Assessment is also a structured methodology to make regenerative startups future-robust and investor-ready — in addition to evaluation, there is active sparring and operational support of portfolio companies.
Instead of waiting for startups to knock on the door with market-ready solutions, a rethinking is needed: From selection to co-creation. Those who want to help shape the regenerative economy should become part of the creative emergence process themselves through structural offerings, methodical support, and long-term partnerships.
Co-building models reduce systemic risks, shorten development cycles, and strengthen investor commitment. They make it possible to help shape the DNA of a startup early, for example through governance standards, impact orientation, or stakeholder integration. This strategic depth increases exit chances and positions investors as true pioneers of a new economy.
In the regenerative economy, it’s not about finding the one next “green unicorn” bet. It’s about building entire ecosystemswhere impact can emerge. Impact accelerators and venture building approaches are decisive levers for actively shaping systemic innovation.
Impact Needs Infrastructure, Not Just Innovation
Many regenerative innovations fail because they lack the necessary infrastructure to work. Without reliable data, open tools, educated professionals, or resilient supply chains, even the best business model remains fragile. Investors who are serious about regeneration should therefore not only invest in individual startups, but specifically in the infrastructure that supports these innovations — so-called commons investments.
Regenerative business models require a new entrepreneurial mindset: systems thinking, ecological intelligence, co-creative working. Educational formats like the Regenerative Economics Program [6] from Capital Institute or Designing Resilient Regenerative Systems [7] from ETH Zurich show how such competencies can be systematically built. Investments in education are strategic prerequisites for creating a functioning ecosystem of regenerative innovation in the first place.
Particularly in regenerative agriculture, the energy sector, or circular construction, open-source initiatives are increasingly emerging that make scalable tools accessible to all. Platforms like OpenTEAM (for agricultural data infrastructure) or CIRCL (for circular construction) bundle know-how, facilitate standardization, and create trust. Investors who participate here not only make contributions to the common good but significantly increase the scalability of their portfolio companies — because they make implementation easier for them.
Regenerative value creation is based on transparency and feedback loops. Projects like LandPKS or OpenLCA help companies measure ecological impacts more precisely and make data-based decisions. Particularly in emerging markets, access to open, valid data is crucial. Those who invest in such structures reduce market risks and democratize innovation.
Individual regenerative products have only limited impact as long as they are embedded in extractive supply chains. Therefore, investments are needed in entire value creation networks: from raw material extraction through processing to logistics. Models like the Regenerative Rubber Supply Chain [8] from Goodyear & HeveaConnect show how entire industries can be transformed through digitalization, cooperation, and impact metrics. Such approaches create value along the entire chain: socially, ecologically, and economically.
Commons investments don’t generate classic exits, but they multiply the success probability for portfolio startups by strengthening their impact environment. They are infrastructure for the next generation of entrepreneurial value creation — comparable to building roads before the invention of the car. Those who invest in them today secure strategic first-mover advantages in emerging markets.
Those who want to advance the regenerative economy should not only bet on individual pioneers, but on the collective foundations that make their success possible in the first place. Investments in education, open-source tools, data platforms, and supply networks create a robust foundation for systemic transformation. It’s time for more investors to not only promote innovation, but co-develop infrastructure.
Regenerative Impact Requires Collaboration
The great challenges of our time — climate, biodiversity, social resilience — are systemic in nature. Their solution demands not individual fighters, but coordinated action. This also applies to capital. Those who want to finance regenerative transformation must unlearn looking only at individual performance and start scaling impact together.
In sectors like regenerative agriculture, circular economy, or restoration of natural ecosystems, not only is capital scarce, but often the expertise on how to properly evaluate such models is also missing. Collaborative fund structures bring multiple parties together, pool knowledge, and distribute risk. OnePlanetCapital is an example of a specialized impact venture capital fund that specifically supports regenerative business models while bundling investor capital as well as entrepreneurial and sustainable expertise.
Particularly in early phases, the interplay of multiple capital providers is crucial to give startups sufficient runway and strategic sparring. Co-investment models — such as that of the 2B Community — show how capital providers with similar impact goals join forces to invest together in ventures whose system impact goes beyond financial KPIs. The advantage: Not every fund has to represent all competencies itself; instead, complementary impact chains emerge.
Instead of orienting themselves only to market logics, mission-driven capital pools are increasingly forming that often invest specifically in transformation fields by sector. These pools combine philanthropic capital, venture capital, and public funds to build entire innovation fields. An example is Toniic’s 100% Impact Network, which aligns complete portfolios toward regenerative impact across family offices and foundations.
Alliances are more than just financing instruments: they are networks for collective learning, faster scaling, and political effectiveness. Because regenerative models need more than money: they need cultural change, policy alignment, and cross-sector reference projects. Therefore, building coordinated investor communities becomes a key strategy to lift the regenerative economy to the next level.
The regenerative economy won’t be won through individual bets, but through strategic collaboration. Alliances and joint fund models enable not only more impact with less risk, they also create the structural prerequisites for real transformation. Capital that connects multiplies its influence.
Conclusion: Investing Means Co-Creating — Not Just Managing
Capital that is only managed secures the status quo — capital that shapes creates the future. In a world where ecological tipping points are being crossed and social tensions are increasing, the regenerative economy is not a utopia, but a business necessity. The shift toward circular, net-positive models is already underway.
Investments that continue to rely on decoupling, resource consumption, and linear growth are ethically questionable and economically risky. Studies like the Global Risk Report 2024 [9] from the World Economic Forum clearly show: the greatest risks for capital markets lie in ecological instability, not in regulation. The regenerative economy offers a counter-narrative: it doesn’t create fewer damages, but more life through business models that put repair, restoration, and resilience at the center.
It’s no longer about vetting startups on ESG criteria or adding green assets. Those who invest today influence tomorrow which infrastructures, supply chains, and consumption patterns are even possible. Investors sit at the lever of shaping power. This requires a shift in perspective from the question How much return with how much damage? to the question How much regeneration is compatible with return?
The regenerative economy doesn’t need just any capital. It needs investors who are ready to take responsibility, ally with others, and think beyond pure return logics. Those who invest now are investing in business models AND possibility spaces for societies that function.
Sources:
[1] https://capshift.com/explore/2023-impact-report/
[2] https://capitalinstitute.org/8-principles-regenerative-economy/
[3] https://www.minterellison.com/articles/summary-blackrock-ceo-larry-fink-annual-ceo-letter-2020
[4] https://impact.economist.com/sustainability/resilience-and-adaptation/dispatch-climate-risk-doesnt-mean-risky-business
[5] https://trellis.net/report/the-state-of-the-sustainability-profession-2024/
[6] https://capitalinstitute.org/course-introduction-regenerative-economics/
[7] https://systemicdesignlabs.ethz.ch
[8] https://rubber.agridence.com
[9] https://www.weforum.org/publications/global-risks-report-2024/
