Regenerative business principles
The below list can be used as a design tool when working with a business. Does your business achieve these points? What aspect of the design could be improved, to better meet them? Remember, it’s difficult to create a business in the current economic system that will do all these things perfectly. It’s something that can be worked toward with an existing business, and if starting a new business - a guide to ensuring your model is as regenerative as possible.
1. Regenerative business invests in regenerative assets.
2. Regenerative business uses renewable resources.
3. Regenerative business uses existing resources, including the waste stream, to create abundance through closed loop systems.
4. Regenerative business designs first, deeply, then does.
5. Regenerative business collaborates before competing.
6. Regenerative business competes constructively. (Constructive competition - raising the bar, making a better product)
7. Regenerative business crafts, lasting products, delivers remarkable services.
8. Regenerative business ensures local communities, economies and ecologies are enhanced by the business model
9. Regenerative business focuses on people, planet, profits - in that order. Profits are not enough unless they help people and the planet.
Local currencies
One of the main advantages local currencies can have for businesses is as an incentive to get people to shop locally. Consider them to be coupons that work with many businesses, not just one. When an entire town participates in local currency, and this can be used between businesses as well, the local economy becomes more resilient. Even if a local currency doesn’t take off or take over, there is a significant advantage in getting people familiar with it.
If the national currency ever collapsed or went funny, like what happened in the Great Depression, people would already be familiar with local currencies and be able to use them.
Cryptocurrency has done more to get people familiar with using something other than government issued currency than anything. There are a number of issues with cryptocurrencies that make them not ideal in a permaculture setting as they are currently designed, though that is changing.
The main problem is the intensive use of energy (think real cost) of popular coins like Bitcoin, which now uses more energy to function than some small countries. It is in no way sustainable, regenerative, or ethical to become dependent on a “currency” that uses that much energy to function. This design choice is something we would categorize as “bad design” or “Type 1 error” (a feature designed to fail) in permaculture.
There are some permaculture designers using concepts of blockchain and cryptocurrency to create a system of carbon credits; there are others creating systems to provide land access. It’s a very new field but the creativity is interesting and can lead to better ways of doing things!
Shared ownership business models
There are a number of ways to share profits and ownership of businesses. Simple profit share is common, with employees given a percentage of any profits the business makes. Sometimes, they’re given ownership of the company through stock shares, and sometimes, when they own more than ½ the value, they become “employee owned” and employees have varying degrees of control and say in the company. (Note often ~30% is in effect controlling interest.)
People originally came together in cooperatives because working alone was more inefficient and expensive. An example of this is dairy farmers in the midwest. A couple of generations ago, each farmer found their own customers and delivered to them. This was very inefficient as individual farmers were driving all over town delivering single bottles of milk and competing with each other for customers.
They got together and formed a cooperative, which allowed them to market all of their milk to customers, and organize delivery so it was much more efficient. Together, they were able to use their time far more efficiently. Land O Lakes is a dairy cooperative - most dairies and many farms still have some sort of cooperative model. The Farm Credit union and Farm Bureau are cooperatives.
There are various types of cooperatives; individual businesses can cooperative to buy goods in bulk and increase their advertising capacity (Ace Hardware), neighborhoods can get together to purchase organic food in bulk (food co-ops), or workers can own the company, ,share profits, vote democratically on major issues (like who manages the company), etc.
Group purchasing power can bring wholesale prices. Group marketing can reduce everybody’s cost while increasing exposure for the product. Group ownership inspires workers to care for the business more deeply since they get direct benefits when it does better.
Some worker’s cooperatives in the US:
Equal Exchange
Fedco Seeds
Southern Exposure Seed Exchange
The largest workers cooperative in the world, Mondragon, in Spain, is a multibillion dollar business that has its own banks, trade schools, retirement funds, health care facilities, and R & D funding. Every worker gets a vote on major decisions.
You need to buy into membership in the co-op (similar to a franchise), but you are also guaranteed health care and a job for life. That is how successful the cooperative is in not only making profits but looking out for the well being of workers while they’re doing it.
Collaborative business models
If you’re not ready to join a cooperative, there are many ways that individuals and small business owners can collaborate for mutual benefit. Imagination is the only limit.
Cooperative/collaborative marketing
Is a simple way to increase one’s reach as a small business person. All the businesses in the neighborhood could come together to create a “street festival” or other event or advertising that will draw many more people to the area.
Or similar businesses could all create a website together that they could all drive business to - thus increasing the visibility for all of them (rather than each individual trying to compete for attention). This is especially useful when a new business, like permaculture, is trying to capture a larger audience.
Business Guilds (cross pollination of activities).
This is a more in depth version of collaboration where three local businesses with different services might meet and work out a plan and program of how each of them could help the other. These work well if regular meetings are held and the businesses build on the different ways they can send business to one another or carry each other’s products or help each other in whatever way makes sense.
The value in this is getting to know each other, and each other’s businesses well enough to actually understand how to effectively help one another. This is a fulfilling exercise, as are most collaborative efforts.
One simple thing we’ve done is do webinars interviewing each other. The key principle applied here is integrate, don’t segregate. We’re taught to be competitive, to fear competition and distrust it. But collaboration is much more powerful and remunerative - and fun.
Major multinational corporations understand this very well and routinely come together to lobby on issues they’re aligned on, and in any number of other areas. That is one reason they’re multinational corporations. Yes, there’s competition there, but plenty of cooperation in areas of mutual interests.
Blue Economy
Created by philosopher and activist Gunter Pauli, is a method of creating a strong, resilient, circular economy through capturing all “waste” and turning it into a resource through mutual cooperation, similar to the idea of Business Guilds. Again, the power of this approach lies in the design phase and a focus on connecting all the dots that can be connected and then finding more.
One simple example might be fishermen producing fish waste which is applied to plants, which provide food, and waste which turns into soil, which produces bait that can catch the fish. Products include fish, fish emulsion, food, compost and worm castings. What about the nets? They can be recycled as well, producing yet another income stream. It takes time to work out the operational lines but it is well worth it for people, planet and profit.
Often, as a guild like this evolves, people figure out how to create even more products from other waste streams woven into their business model. Waste streams are a huge potential source of income and energy and people are making very good livings from capturing them.
Legal and certification tools
There are numerous certifications one can get as a green business and more being added all the time. We’ll share a couple of basic strategies here.
Cradle to Cradle design (no waste)
Developed by architect William McDonough and chemist Michael Braumgart, this is a design system that ensures any toxic substances stay within a closed system, and organics are reused or composted. This is an approach that can be scaled and used in an industrial society. They, like us, believe that it all starts with design.
“According to Cradle to Cradle, waste (which is what most pollution is) is a product of bad design. Regulations are enacted to control waste, but the message of regulation is, “Be less bad.” Good design, the authors argue, says, “Be good.”” https://grist.org/article/design/
B corporations
B (or “benefit”) Corporation is a legal entity replacing a “C” corporation that legally puts people and planet on an equal par with profits without getting into trouble with shareholders. “C” corporations are obligated by law to act in the interest of their shareholders, even if it means harming communities or ecosystems. The B Corp creates a legal entity that cannot do that without risking its ability to operate. It has requirements that show the company is committed to sustainability. Well known B Corps include Patagonia, Ben and Jerry’s and Seventh Generation.