How Business Can Improve the World, Not Just the Bottom Line | Esha Chhabra | TED

Summary

The script critiques the traditional business focus on scale, growth, and profit maximization, highlighting its environmental and social drawbacks. It introduces the rise of sustainable and mission-driven brands as a step towards addressing these issues but argues that true change requires going beyond sustainability to regenerative business practices. Regenerative businesses aim to restore and revitalize communities, industries, and the environment by embedding social and environmental impact into every aspect of their operations. Examples include Veja's sustainable shoe production and other companies pioneering in employee ownership, waste reduction, and regenerative agriculture, emphasizing the need for replication rather than scale and redefining business to prioritize regeneration over profit.

Takeaways

• 💡 Business traditionally focuses on scale, growth, productivity, and maximizing profit, often at the expense of the planet and people's well-being.
• 💰 The rise of sustainable and mission-driven brands represented a first step towards rectifying the harmful impacts of traditional business practices, but often fell short of significant action.
• ⚓️ 'Regenerative' is emerging as a crucial next step, aiming to restore and revitalize communities, industries, and the environment, moving beyond mere sustainability.
• 🔥 Regenerative businesses tackle social and environmental issues at their core, asking what problems they can solve rather than how much profit they can make.
• 👨‍🎓 Entrepreneurs are shifting focus from sustaining a broken system to regenerating and improving it, embedding impact into every aspect of their business model.
• 🌍 Examples like Veja shoes illustrate regenerative practices by preserving the Amazon, employing the 'unemployable', and focusing on environmental and social impact at every stage of production.
• 💵 Regenerative business models include employee ownership, profit-sharing, and viewing waste as an opportunity, fostering a more inclusive and sustainable economy.
• 💻 Regenerative agriculture, a prominent aspect of the regenerative movement, emphasizes soil health and organic farming, supporting ecosystems and local communities.
• 🤝 The call for replication and diversity in regenerative businesses underlines the importance of spreading these practices across industries and regions for broader impact.
• 💪 The narrative challenges the traditional metrics of success, urging businesses and individuals to consider the sufficiency of growth, scale, and consumption, and to prioritize human and environmental well-being.

Q & A

What traditional business priorities have led to negative impacts on the planet and people?

Traditional business priorities like scale, growth, productivity, and maximizing profit, often associated with hustle culture, have negatively impacted the planet and left people seeking more balance in their lives.

How have sustainable and mission-driven brands attempted to address the issues of traditional business models?

Sustainable and mission-driven brands have tried to rectify issues by adopting models like donating a pair of shoes for every pair sold, being conscious companies, recycling waste, and using carbon offsets, although these efforts often seem more like marketing than actionable change.

What does the term 'regenerative' signify in the context of business?

Regenerative businesses aim to restore, revive, and rejuvenate communities, industries, and people that are struggling, focusing on creating positive impacts that go beyond sustainability.

How do regenerative businesses differ in their foundational approach compared to traditional businesses?

Regenerative businesses start with the intent to solve social and environmental problems, embedding impact into their products and operations, unlike traditional businesses that primarily focus on profit.

What are some key practices of regenerative businesses?

Regenerative businesses may involve practices like considering the environment and people in their supply chain as partners, fostering better human connections, employee ownership, profit-sharing, and ensuring their entire business model focuses on impact.

Why do some entrepreneurs shy away from the term 'sustainability'?

Entrepreneurs may avoid the term 'sustainability' because it implies maintaining the status quo or a broken system, whereas regenerative approaches aim to transform and improve the system.

Can you give an example of a company that embodies regenerative business practices?

Veja, a shoe brand, exemplifies regenerative practices by preserving the Amazon, hiring people considered unemployable, regenerating soils, and challenging the fashion industry, focusing on environmental and social impact throughout their supply chain.

What challenges do large global companies face in transitioning to regenerative business models?

The transition to regenerative business models is harder and slower for large global companies due to the scale and complexity of their operations, among other factors.

What unique approach does Veja take towards marketing their products?

Veja minimizes spending on traditional marketing, such as endorsements by athletes and influencers, instead reinvesting funds into their supply chain, ensuring fair wages and environmental care.

How do regenerative businesses view the concept of scale and growth?

Regenerative businesses challenge the traditional notion of endless growth and scale, suggesting that it should be acceptable to maintain a level of scale that is sustainable and enough, focusing on impact over size.

Outlines

00:00

🔄 Transitioning from Sustainability to Regeneration in Business

The speaker begins by critiquing the current business ethos focused on growth and profit, which has resulted in negative impacts on the planet and people's lives. Despite well-intentioned moves towards sustainability in businesses, the term has often turned into a marketing strategy without substantial change. The narrative then shifts to the concept of regenerative businesses, which aim to restore and invigorate communities, industries, and individuals. These businesses tackle social and environmental issues by embedding impact into their operations, beyond mere profit generation. The speaker emphasizes a holistic approach where every aspect of a business contributes to positive impact, challenging the status quo and advocating for a shift beyond sustainability to a regenerative model.

05:02

🌱 Real-World Examples of Regenerative Business Practices

This paragraph delves into practical examples of regenerative businesses, illustrating how companies can make a significant impact. The narrative highlights Veja, a shoe brand that incorporates environmental and social considerations throughout its supply chain, from sourcing rubber sustainably in the Amazon to partnering with a nonprofit for fulfillment in France. Additional examples include Technicians for Sustainability, which shares profits with employees, and Toast Ale, which turns food waste into beer. These cases demonstrate how regenerative practices can be integrated into various aspects of business, showcasing a shift from wasteful to resourceful and from exploitative to inclusive, ultimately benefiting both the planet and people.

10:02

📣 Spreading the Regenerative Business Model for Broader Impact

The final paragraph calls for the widespread sharing of regenerative business stories to inspire replication across industries and geographies. The speaker reflects on conversations with entrepreneurs who emphasize the importance of not striving for excessive scale but rather focusing on meaningful impact. The core message encourages businesses to redefine their success metrics beyond profit and growth, considering environmental regeneration and human dignity. The speaker concludes by urging business leaders to leverage their influence to create organizations that prioritize the well-being of the planet and humanity, challenging them to redefine the essence of business.

Keywords

💡Sustainable

Sustainability refers to the capacity to maintain certain processes or states indefinitely. In the context of business, it often focuses on environmental conservation and socially responsible practices to minimize negative impacts on the planet. The video script critiques the overuse of sustainability as a marketing tool rather than substantial action, indicating a need for businesses to evolve beyond merely sustaining to actively improving and regenerating resources and communities.

💡Regenerative

Regenerative is a concept that extends beyond sustainability by aiming not just to reduce harm but to actively improve and rejuvenate ecosystems, communities, and societies. The video emphasizes regenerative businesses as those that restore, revive, and enrich their environments and stakeholders. Examples include businesses focused on restoring soil health, increasing biodiversity, and enhancing the well-being of communities they operate within.

💡Mission-driven

Mission-driven brands are companies that are founded on, and operate according to, a specific mission to achieve social, environmental, or economic goals. The script highlights the rise of such brands as a response to consumer demand for more ethical and purposeful business practices, signifying a shift from profit-centric to value-driven business models.

💡Carbon offsets

Carbon offsets are compensatory measures taken by individuals or companies to reduce the equivalent of their carbon dioxide emissions through funding renewable energy projects, reforestation, and other environmental efforts. While mentioned in the script as a step towards sustainability, the narrative suggests that simply offsetting emissions is not enough and that more transformative approaches like regenerative practices are necessary.

💡Supply chain

A supply chain encompasses all the steps involved in producing and delivering a product or service, from raw materials to end customers. The video script discusses regenerative businesses considering their supply chains as partnerships, focusing on the environmental and social impacts of their production processes, and aiming to improve the lives of those within the supply chain.

💡Profit-sharing

Profit-sharing refers to a business model where employees receive a share of the company's profits, beyond their regular wages or salaries. It's mentioned in the script as a method regenerative businesses use to distribute wealth more equitably and foster a sense of ownership and community among employees, contributing to social impact.

💡Environmental footprint

The environmental footprint of a company refers to the total impact its operations have on the environment, including carbon emissions, resource consumption, and waste production. The script emphasizes the importance for businesses, especially those in the services industry, to consider and minimize their environmental footprints as part of a broader regenerative approach.

💡Waste

In the context of the video, waste is viewed not just as an inevitable byproduct of production but as an opportunity for innovation and resource efficiency. Regenerative companies aim to repurpose waste into valuable products, reducing environmental impact and creating a circular economy. An example provided is the transformation of bread ends into beer, illustrating a creative approach to waste reduction.

💡Regenerative agriculture

Regenerative agriculture is a set of farming practices designed to restore soil health, increase biodiversity, and sequester carbon, thus reversing the detrimental effects of conventional agriculture. The video script uses regenerative agriculture as a foundational example of regenerative practices, illustrating how businesses can contribute to environmental sustainability and improvement.

💡Employee ownership

Employee ownership refers to business structures where employees have a significant stake in the company, often through stock ownership plans. This approach is highlighted in the video as part of regenerative business practices, contributing to wealth distribution, enhancing job satisfaction, and promoting a culture of inclusivity and shared responsibility.

Highlights

Business has traditionally focused on scale, growth, productivity, and maximizing profit, contributing to environmental and social issues.

The rise of sustainable and mission-driven brands represents a shift towards more ethical business practices.

Sustainability efforts have often been more about marketing than meaningful action, highlighting the need for a deeper change in business models.

Regenerative business is introduced as the next step beyond sustainability, aiming to restore and revive communities, industries, and the environment.

Regenerative companies focus on solving social and environmental problems through their products and operations.

The concept of regenerative business incorporates impact at every level of the company, not just as a side activity.

Examples of regenerative practices include prioritizing environmental sustainability in supply chains and fostering better human connections.

The capital and ownership model of a company, such as employee ownership and profit-sharing, can significantly impact its social contributions.

The rejection of the term 'sustainability' by some entrepreneurs, arguing it suggests maintaining a broken system.

The story of Veja, a shoe brand that prioritizes environmental preservation, fair employment, and challenges the fashion industry with its regenerative approach.

Technicians for Sustainability in Arizona shares profits with employees, investing in people who contribute to the renewable energy transition.

Toast Ale, a UK-based company, turns wasted bread into beer, showcasing an innovative approach to dealing with food waste.

Regenerative agriculture is highlighted as a key area of focus for regenerative businesses, with examples of practices that restore soil health and biodiversity.

Entrepreneurs emphasize the importance of telling stories of regenerative businesses to inspire replication and broader adoption.

A call for redefining business to prioritize regenerating the environment and treating people as humans rather than transactions.

Transcripts

Business as we know it has been focused on scale, growth,

productivity and maximizing profit.

It's that hustle culture that we love, right?

The faster the growth, the better; the more money, the better.

And yet that hasn't really worked.

I mean, the planet has clearly taken a hit,

but also, I think people are fed up

and seeking for more balance in their lives.

So to rectify this, over the last few years,

we saw the rise of sustainable and mission-driven brands.

These were companies that started with a very simple model of:

you buy a pair of shoes, we'll donate a pair of shoes.

Then it became "we'll be conscious companies,"

"we'll recycle our waste,"

and most recently, "we'll use carbon offsets."

Well, that’s all well-intentioned, and it truly is,

but sustainability has become more marketing than action, it seems.

It hasn't really moved the needle on what is the core purpose of business

and the core model of business.

So I see it as: it was a great step one, good effort,

but now it's time to move to step two.

And what is step two?

It's regenerative.

You may have heard of the term.

It’s been all over the news lately, in Vogue, in New York Times,

in Outside magazine.

These are just some headlines.

New York Times said it best, I think most succinctly.

“Regenerative: it’s like yoga, but for farmland.”

(Laughter)

Not quite.

So what is regenerative,

particularly in the context of business?

Regenerative businesses are looking to restore,

revive and bring to life communities, industries and people that are struggling.

It's actually much more than just a term.

So I’ve been reporting for over 10 years on business,

social issues and the environment and how all of that overlaps.

I have seen my fair share of doom and gloom headlines.

I think we can all agree we've got problems in the world.

But as I was doing this reporting,

I kept meeting entrepreneurs

that were really looking beyond the crisis at hand

and focusing on solutions.

So I decided to write about their stories and their regenerative businesses,

which don't start with this question

or intent of how do we make the most money by selling you X, Y or Z?

Rather, they ask a really simple question:

What problem are we going to solve?

What social and environmental problem are we going to solve?

And so it's not about just selling you another great pair of jeans

or a great cup of coffee or a nice hotel stay,

unless all of that has impact embedded into it.

In fact, I like to think of regenerative companies as a multi-tiered cake.

It's layer upon layer upon layer of impact,

which makes the whole thing enticing.

It's not just one thing you do off to the side

or one aspect of your company.

It's every tenet of the company is focused on impact.

And so what are some of these tenets they might be thinking about?

Well, if you have a supply chain, if you're in manufacturing,

you're definitely thinking about the environment

and the people that are involved in that supply chain.

In fact, they're not your supply chain, they're your partners.

If you're in the services industry, yes,

you're thinking about your environmental footprint,

but also are you fostering better human connections?

And how are you going to fund this company?

Because the capital that you take on is going to determine

how you run the company for years to come.

Are you open to employee ownership, profit-sharing?

That can have serious social impact in the world.

And most of all, are you inspiring and improving people's lives at work

or just keeping them afloat?

Because I think we can all agree that we want to be treated with respect

and work with purpose these days.

So it's every hub and spoke of the company

is thinking about impact, not just one.

And that’s why, when I turn to these entrepreneurs,

and I would ask them, "Well, what's your take on sustainability?"

They would sort of push back and say,

"We don't really use that word around here."

It was almost as if they were allergic to it.

They said, "Because, what are we sustaining?

A broken system, the status quo?"

I mean, that's what it suggests, right?

Now regenerative is not a one-size-fits-all.

For large global companies,

this is going to be a harder and slower transition

for reasons we can discuss afterwards.

But for small- to medium-sized companies, it’s very doable.

In fact, it's already happening.

And so it's lovely to talk about all this in theory,

but let's put it into context with some examples, shall we?

You may have heard of the shoe brand Veja.

They're quite popular these days,

but 20 years ago, when they started,

the two French cofounders started with less than 20,000 Euros,

and they had very little fashion experience.

And yes, they were selling shoes,

but they were looking to do something far more meaningful.

They wanted to preserve the Amazon,

hire people that are considered unemployable,

regenerate soils and challenge the fashion industry as a whole.

So a few years ago, I had the opportunity to go down

and see one of their supply chains in the Amazon in Brazil.

And it was beautiful and green and biodiverse.

And the supply chain that I focused on was rubber.

So Veja sources native rubber from the rubber trees in the Amazon

for the soles of their shoes.

These trees can harvest rubber for years, if not decades

if it's done properly and it's done by rubber tappers.

These are individuals who live within the Amazon,

and their other option for a livelihood is cattle farming.

But thanks to Veja,

they were able to make the same amount of money,

if not more money, tapping trees for rubber

than they would be doing cattle farming.

And cattle farming requires you to level the land,

to get rid of the trees.

Here, the trees get to stay upright.

This is an example of a regenerative design,

where a company thinks about the environment

and its people from the beginning.

That rubber is then taken down to their factory

in the southern part of Brazil, in Porto Alegre,

where it meets up with organic cotton that comes from another corner of Brazil

and is turned into a shoe.

That shoe then sails across the sea,

and only by sea, to France.

Now here again, Veja had an opportunity.

They could have hired any fulfillment company to do their fulfillment.

Instead, they decided to partner with a nonprofit.

This nonprofit hires individuals that come from marginalized neighborhoods

and are considered unemployable,

and gives them a chance at a career.

Those individuals are responsible for shipping the shoes out to customers.

So it's layer upon layer of impact.

And one more.

Veja decided early on

that they were not going to get so involved in the marketing game,

so they don't pump loads of money into athletes

and influencers and models to wear their shoes.

The money goes back to the supply chain.

The materials cost more,

but the people who make it also get paid more.

Every hub and spoke of the company --

(Applause)

Every hub and spoke of the company is thinking about impact.

So making a shoe has a footprint on the planet

and no solution and no company is perfect,

we can all acknowledge that.

However, when we ask this question, can business do better?

Definitely.

Here's just one example in fashion.

Looking beyond fashion,

what does regenerative business look like?

Well, some of them use employee ownership and profit-sharing.

Here’s a company in Arizona called Technicians for Sustainability

where the owner of the company realized early on

that the folks who are responsible for installing the solar panels

on the roofs

are not going to amass personal wealth doing that job.

So he opened up the profits of the company to his employees.

Today, 40 percent of the profits every year go to the employees.

And what's great about it is not only are they part

of the transition to renewable energy,

but they're investing in the people that are making it happen.

Regenerative companies think about waste differently.

They see it as an opportunity rather than a burden.

If you've been across the pond to the UK,

you know that the Brits love their ready-to-eat sandwiches.

You can find them on every corner shop.

Well, to make those lovely sandwiches,

you have to unfortunately sacrifice the end slices of loaves

and so those end slices would often go to waste.

Well, a food waste entrepreneur and a social entrepreneur got together

and said, "Why don't we turn it into beer?"

And that became Toast Ale.

And so now Toast is available throughout the country in pubs,

restaurants and in grocery stores.

And they've gone one step further.

The profits of the company now go to a charity that's focused on food waste.

(Applause)

And regenerative, the term you may have heard of,

has its roots in regenerative agriculture.

That's where it's being used most prominently these days.

Well, here's a gentleman, David Vetter,

who's been doing it far before it was trendy.

He is the son of a military veteran-turned-farmer

who lives in the cornfields of Nebraska,

in the heart of big ag and conventional ag.

But him and his dad decided early on

that they would go down the route of regenerative organic farming.

They grow regenerative organic grains.

And if you talk to David, he will tell you,

"Soil is something you grow crops in,

dirt is something you find under your bed.

You ought to know the difference."

There is a difference.

And as the company has grown and as the family has grown,

the Vetters have also put a processing unit,

a mill on their facility,

which now allows other farmers in the area who want to also do organic farming

to be able to get their products closer to the market.

If we can create these links,

we can get these products closer to consumers.

So these are just some examples.

I mean, I could rattle on many more examples of these kinds of companies,

but when I asked them fundamentally, "I said, OK guys, what's next?

What do we have to do?"

Many of them said to me one simple thing.

We have to tell these stories further and wider.

The cofounder of Veja said to me something

that I thought was quite poignant.

He said, "We don't need Veja to be the next global ethical shoe brand.

We need dozens of Vejas.

We need dozens in every industry, in every culture, in every geography.

Replication is the answer."

And that brought up another conversation about scale.

Many of the entrepreneurs said to me,

"We don't all need to reach astronomical heights.

Not every company needs to be a global company.

It should be OK to say we are good with this level of scale.

This is enough."

And that fundamental question, of how much is enough,

has come up year after year in my reporting.

Ask yourselves personally how much stuff, house, food,

consumption is enough.

But also, as business leaders,

how much growth, scale, profit is enough

to feed our greed and our egos sometimes.

So I leave you with this thought.

We're all here, on this flying rock, for a moment in time.

We can't take any of this stuff or any of this wealth with us.

So why not use this time to build businesses

that think beyond profit?

Why not build organizations

that regenerate the environment instead of destroy it?

Why not build organizations and companies that have a workforce

that treats people as humans and not as transactions?

I think it's time that we really redefine business.

Thank you.

(Applause)