Regenerative business: a roadmap for rapid change

Multinational businesses with interconnected operations have traditionally sought to scale everything globally - from raw materials sourcing and equipment purchasing to HR policies - with a goal to create maximum efficiency. What has emerged of late is a hybrid approach, nicknamed ‘glocal’, that makes the most of scaled practices while recognizing that manufacturing sites, consumer habits and labour markets often have drastically different footprints. Local consumer needs can vary significantly, as can solutions for protecting local biodiversity. Paying more urgent attention to regional needs with a long-term mindset can step-change progress, so that each community the business touches can thrive.

This is the core of the regenerative business movement, which places a more intentional focus on systems thinking to protect, restore and replenish both human capital and natural resources. More than a theoretical exercise, some companies are beginning to operate as regenerative businesses in order to accelerate change.

Take local water supplies. Across the world, and even within countries, there is a diverse mix of landscapes, cultures, economies and climates that make water issues complex and which require solutions unique to each river basin. This led P&G to embark on a data-based water risk assessment of all our sites, partnering with experts at World Resources Institute (WRI), World Wildlife Fund (WWF) and Environmental Resources Management (ERM) to identify the areas of the world on which we should focus for maximum positive impact. Using data from the WRI Aqueduct Water Risk Atlas and other sources, 18 priority basins across seven countries were identified by understanding where our consumers, suppliers and facilities are most exposed to current and future water risks.

Here's an example of taking a systems approach to catalyze collective action at the local level; three of the 18 priority water basins P&G is focusing on the next decade are in central Mexico, including the basin that surrounds Mexico City. Over the past year, P&G has engaged with local experts at The Nature Conservancy to learn more about the water issues and potential solutions in and around the city. As a first step towards being part of the solution we joined the board of the Mexico City Water Fund, Agua Capital, which was created in 2018 as an innovative platform for collaboration among different sectors to contribute to the water security of Mexico City, with an emphasis on nature-based solutions. P&G, along with the other board members, intends to address the overexploitation of the city’s aquifers, inefficiencies in infrastructure and operations, flood management and improvement of wastewater treatment and reuse.

Setting a clear mission infused with an entrepreneurial spirit, regenerative businesses understand the change process and embrace bold thinking to address complex challenges. It is predicted that by 2030, there will be a 40% gap between global water supply and demand. Pressure on water resources is growing. Some cities, like Cape Town, South Africa have already experienced Day Zero: a day when the city nearly ran out of water and the government required all four million residents to reduce their water use at home to 50L per person per day.

Most homes in the US use up to 500 litres of water per day, per person — an unsustainable rate. Several years ago, we started exploring innovations in waterless and water-efficient products, purification systems and experience platforms. At the World Economic Forum’s Annual Meeting in 2019, we led a discussion that explored whether homes could run on 50 litres a day and still feel like 500 litres.

The result - the 50 Litre Home concept, spearheaded by P&G - is bringing together companies, policy-makers and communities to develop and scale innovations for the home that help solve the urban water crisis. It is an ambitious undertaking that requires cross-sector collaboration to move quickly and harness diverse expertise and resources, like home fixtures and appliance makers, city governments, utilities, tech partners, NGOs, real estate developers, engineering, home design and more.

Responsible forestry is another area where the principles of regenerative business are working to create the right market incentives and trade practices while ensuring local communities are positively impacted today and tomorrow. Beyond simply managing forests, a regenerative approach also seeks to enhance resilience through local biodiversity conservation and procurement practices that restore and replenish. World Wildlife Fund’s Global Forest & Trade Network (GTFN) is one of the most forward-thinking efforts for saving the world's valuable and threatened forests. By working with companies committed to achieving and supporting responsible forestry, GFTN helps to create local market conditions that champion biodiversity while providing economic and social benefits for the communities - helping ensure forests thrive now and in the future.

Waste as an economic accelerator

Finding locally-driven, creative ways to address plastic waste is another area where the regenerative business approach is emerging as a way forward. No single company can solve this issue, and there is no solution that can become self-sustaining without the deep engagement of local communities. P&G has taken a lead role in the Alliance to End Plastic Waste, a CEO-led not-for-profit coalition of more than 40 companies that make, use, sell, process, collect and recycle plastics. Bringing together the world-class expertise and global reach of the entire plastic value chain represents an unprecedented gathering of resources all focused on solving our plastic waste problem. The Alliance is applying member know-how in collaboration with governments, communities, NGOs and academics on a range of projects, rather than simply providing funding to others.

This approach is starting in South East Asia where the need is most urgent. Recognizing that a critical element common to most every solution where infrastructure is lacking is the local workforce, many of the projects the Alliance is supporting have a social business foundation. Enlisting the informal sector will accelerate progress, increase the economic attractiveness of keeping materials in the system, create jobs, and strengthen the communities where waste-pickers are at the bottom of the current value chain. Going from local to global, not the other way around, is the ideal way to be regenerative.

I firmly believe that adopting regenerative business practices will soon emerge as a must-have, not a nice-to-have. The times of ‘less bad’ are over. Tomorrow is about ‘more good,’ as defined locally and scaled globally.