What is the regenerative economy?
The regenerative economy is an economic model in which economic activity supports the natural and social systems on which it depends. The concept is sometimes called the renewing economy. Sitra brought the term into the Finnish discussion with its report Towards a Regenerative Economy, which describes how the same principles that promote the systemic health of all living systems can be applied to economic activity.
The regenerative economy goes beyond sustainability: it is not enough that the economy does no harm; it must actively strengthen the vitality of the environment and society.
Why is the regenerative economy relevant to companies?
Business is the most important agent of a regenerative economy. As the policy framework (such as the green transition and the Nature Restoration Law) steers towards a restorative economy, companies that build their business model around strengthening the living world have an advantage.
The regenerative economy also offers a strategic frame for guiding investments, product development and value-network design over the long term.
Regenerative economy vs. circular economy vs. doughnut economics
Circular economy focuses on material and resource loops: reducing waste and preserving the value of resources.
Doughnut economics is a framework that defines a safe and just operating space for humanity.
Regenerative economy is the broader model that contains both and adds the impulse for active restoration of ecosystems and communities.
Practical applications
A company applying the principles of a regenerative economy invests in long-lasting relationships, strengthens local communities, restores natural capital, and links its product development to the health of natural systems. Examples include Houdini Sportswear (circular and biobased materials), Soilfood (recycled fertilisers) and Origin by Ocean (Baltic Sea eutrophication as a business resource).
Related concepts
- Regenerative growth, the company-level growth promise of the regenerative economy.
- Doughnut economics, a framework that defines the regenerative economy's target zone.
- Planetary boundaries, the ecological foundation of the regenerative economy.
- Regenerative business, where the principles turn into a company-level management model.