Regeneration First: A Paradigm Shift in Corporate Sustainability

By Dr. Simon J.D. Schillebeeckx 25 January, 2022

it's time to focus on 'handprints' to fill the gap between corporate disclosure & scientific reality, urges Dr. Schillebeeckx - Co-founder of Handprint Tech

>90% of S&P 500 companies publish sustainability reports yet, the disconnect between corporate disclosure & scientific reality is a cause for alarm
‘Regeneration First’ proposes to focus on ‘handprints’ - actions with a positive impact on the planet i.e. restoring/ rewilding - rather than footprints that aim for net zero
Shifting from footprinting & corporate materiality towards ecosystem materiality will help meet changing investor expectations, employee involvement & consumer preferences

In 1989, governments signed the Montreal Protocol which led to the elimination of CFCs responsible for the hole in the ozone layer. This global agreement was successful thanks to its broad corporate support as companies had already found a substitute. That year, we also came tantalisingly close to globally binding regulations for greenhouse gas emissions. Fast forward 32 years, one Kyoto Protocol and one Paris Accord, and we are edging towards 420ppm CO2 in the atmosphere.

Not so long ago the goal was to keep this concentration below 350. At once, the ongoing destruction in biodiversity is accelerating at a rapid pace, with scientists agreeing we are in the midst of the sixth mass extinction event and the first one caused by human activity. The sixth assessment report of the IPCC paints a dire picture of the state of the world and offers surprisingly little hope.

More than 90% of S&P500 companies publish sustainability reports…

In apparent conflict with scientific reality is the rise of corporate sustainability. In 2011, about 20% of S&P500 companies publish sustainability reports. That number is now above 90%. The same trend is visible in China, Singapore, Japan, UK, and most European stock exchanges.

If we would look at the narratives spun by the corporate world alone, we would be celebrating victories of human ingenuity over the climate and biodiversity crises, but nothing is further from the truth.

…but the disconnect between corporate action, disclosure & scientific reality is cause for alarm

This disconnect between corporate action, corporate disclosure, and scientific reality is cause for alarm. It is also a cause for action. One rather radical perspective is to put regeneration first and make it part and parcel of every company’s sustainability activities but especially for the growing service sector.

In the report “Regeneration First”, I propose that we need nothing short of a revolution in our approach to sustainability if we are to address the enormity of the climate crisis.

Dominant sustainability narrative has been on footprints, aiming to reach net-zero…

…yet, it is not an aspirational goal

For way too long the dominant sustainability narrative has been obsessed with footprints, thereby imposing a measure of guilt on every single person and company. Yet, “there is no problem so awful that it cannot be made worse by adding some guilt”. This footprinting obsession perfectly fits with the sustainability priorities of reduce, reuse, recycle with the end goal being to reach Net Zero or Carbon Neutrality, a state in which the influence of humans on the planet is zero.

The problem with Net Zero or Neutrality is that it is not an aspirational goal. And therefore, it fails to motivate sufficient action. As Desmond Tutu famously said, “if you are neutral in the face of oppression, you side with the oppressor”.

“Regeneration First” focuses on ‘handprints’, actions that have a positive impact on the planet

Regeneration First focuses on handprints. Handprints are deliberate actions that have a positive impact on the planet: Think reforestation, ocean plastic clean-ups, coral reef reconstruction, habitat preservation and so on. Handprints are linked to three new Rs. We need to grow our natural reserves to 30%, a target backed by the High Ambition Coalition for nature and people which should not only save our natural ecosystems but even improve our economic ones.

This requires both restoring damaged ecosystems as well as rewilding part of the earth by removing human intervention.

We need to grow our natural reserves to 30%…

…which requires both restoring damaged ecosystems & rewilding part of the earth

Instead of Net Zero, these actions will lead to an aspirational goal of people leading planet-positive lifestyles and organizations becoming regenerative so that we leave the earth better off than we inherited it.

3 congruent drivers: investor expectations, employee involvement & consumer preferences

For such lofty ambitions to materialize, we need companies all over the world to step up, which begs the question: What’s in it for them? We see three congruent drivers: investor expectations, employee involvement, and consumer preferences.

Investors are becoming more data-driven which requires a move away from the annual sustainability reports and towards verifiable continuous disclosures of both positive and negative impacts. The entire ESG movement in combination with enabling technologies facilitating radical transparency such as blockchain is on the verge of changing investing forever.

Companies will increasingly move away from providing only annual sustainability reports because stakeholders will request more frequent, more detailed information. Quasi-real time environmental data disclosures will become the new norm.

Hope to see a shift away from corporate materiality towards ecosystem materiality

In addition, I hope to see a shift away from corporate materiality towards ecosystem materiality. The former has been hailed by GRI and SASB as essential to high-quality reporting but in my mind, it focuses too much on what is best for the company from an economic vantage point. We need sustainability reporting to be sustainability centric. The recently identified “accounting gap” of 5.5 billion tons of CO2 (i.e. 12% of global emissions) is evidence of this problem.

By shifting our actions towards regeneration, we can engage many more companies and employees because every organization can meaningfully (and financially) contribute to regeneration. This is manifestly not true for sustainability today. The vast majority of employees in the developed world, which should bear the brunt of the costs to save humanity, do not work in primary industries, in manufacturing, or in transportation.

80% of employment in US, EU, SG, HK are excluded from sustainability debates due to their organisation’ small footprints

Pharmaceuticals, lawyers, government employees, marketers, tech companies, digital nomads, consultants, health workers, PR agencies, educators, banks, FinTechs, insurance companies, brokers, unions, politicians, and every SME that lacks the power to change its supply chain from the inside out constitute easily 80% of employment in the USA, EU, Singapore, and HK for instance and have no meaningful avenue to contribute to reduce, reuse, recycle. These employees are de facto excluded from sustainability debates because they work for organizations with relatively small footprints and hence have little to reduce.

They could however be trailblazers when it comes to creating a positive impact by integrating positive impacts in employee KPIs and daily business processes and transactions, something companies like Handprint enable.

Finally, consumers preferences are evolving. Historically, consumer preferences for local action have inspired companies to solve (often minor) problems in their backyards. The urgency of the climate crisis however makes such actions increasingly look like resource misappropriation. The next phase of stakeholder capitalism will lead to calls for companies to invest in natural capital, a public good. Consumers calling for climate justice and expecting companies to engage in regeneration are no longer fringe movements as the pandemic has finally made us feel that we are physically interconnected, hence heightening climate change and biodiversity activism.

Carbon neutrality will become an expected business practice

Carbon neutrality will not be a strategic differentiator for long as it will become an expected business practice. Doing so would not only massively increase the number of potential high-impact organizations but also revolutionize the scope of impact.

Investing in sustainability implies efficiency gains that lead to higher corporate profits through cost reductions. Investing in regeneration implies enormous North-South transfers that support livelihoods, education, de-urbanization, and climate justice. Regeneration will become the most influential brand differentiator of this decade. And it can save billions of lives. What’s not to like about that?

Further Reading

  • Dreaming Of A Regenerative Economy? – Co-founder Dr. Simon J.D. Schillebeeckx explains how Handprint helps restore threatened ecosystems one micro purchase at a time by helping companies to integrate positive impact
  • The Water Footprint Versus The Water Handprint – Corporate water stewardship is stalling. It is time to adopt a water handprint strategy with its positive and broader impact focus, seen already in the ICT sector, says William Sarni, Water Foundry CEO
  • Role Of Businesses In Water Conservation – With the backdrop of Singapore’s industrial water challenges, Professor Asit Biswas & Dr Cecilia Tortajada show what Unilever & Nestle are doing on water management but also the behavioural challenges they face
  • Market Potential Of Nature-based Solutions In Southeast Asia – Nature absorbs 50% of CO2 emissions & provides US$72trn in goods but is chronically underfunded. What are the opportunities in SEA? RS Groups’ Joan Shang shares key takeaways from their study
  • Bankable Nature Solutions: A Case Study – Is there a way to stop land subsidence, create climate resilience & raise farmers’ incomes? WWF’s Thomas Gomersall & Jean-Marc Champagne say the integrated rice & shrimp model does exactly that

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Dr. Simon J.D. Schillebeeckx
Author: Dr. Simon J.D. Schillebeeckx
Dr. Simon J.D. Schillebeeckx is the co-founder of Handprint Tech, a Singaporean start-up that empowers companies to integrate positive impact into business processes. He is also an Assistant Professor of Strategic Management at the Lee Kong Chian School of Business of SMU where he teaches and conducts research on the cross-section of digitization, business model innovation, and sustainability. Simon also founded the Global Mangrove Trust, a non-profit organization that builds technology to support mangrove reforestation
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