The regenerative bioeconomy offers new visions of what businesses can deliver for climate
The efficacy of corporate-led decarbonisation has come under increasing fire recently and not just from environmentalists.
Many corporate leaders have questioned the real impacts of ESG practices, including Blackrock’s former sustainable investing chief Tariq Fancy.
The EU has also come in for criticism around this. Last year, it voted to include fossil-heavy natural gas in its taxonomy as a legitimate target of green finance. It led many to question whether regulatory frameworks are really supporting ethical finance in living up to its climate promises.
These accusations don’t just target underperformance on carbon reductions targets but also on sustainable development goals – the social benefits meant to accompany the green transition.
Building on the ESG concept, we need new ideas on how business can tangibly serve social and environmental goals. Here, the concept of the regenerative bioeconomy could offer something of value.
How is the regenerative bioeconomy different?
There are different definitions of what a regenerative bioeconomy is. However, all challenge the notion that a business’ role is to simply extract and transform resources – whether or not these resources are lower carbon or renewable. On top of producing goods and services, regenerative business ensure they give back more than they take.
One version of the regenerative bioeconomy says that businesses should give back in the form of ecological benefits, improving landscapes and biodiversity as a natural byproduct of the way they operate. Under this vision, a regenerative business would, for example, manufacture lower carbon intensity products in ways that actively revitalise habitats – coasts, abandoned lands, and former industrial sites.
Crucially, regenerative businesses would not achieve environmental impacts by buying up offsets tied to habitat restoration projects in distant continents. They would do it through the immediate consequences that flow from their business model.
One example would be a bio-based company that makes plant-based packaging that biodegrades quickly anywhere, not just in specialised processing plants. These products would be designed to release nutrients and other inputs (like soil-structuring materials) into the soil as they decompose, wasting nothing of ecological value through their life-cycle.
Liz Corbin, research director at circular economy consulting company Metabolic, says this type of model is critical for realising the bio economy’s potential. Currently, she says, ‘our bioeconomy is not mimicking natural systems in the way that it should”. In other words, it is still operating in the take-and-take-some-more extractive model that legacy industries have worked under, undermining its ability to offer an economic alternative that secures a healthy environment capable of sustaining our material needs long term.
Another vision of the regenerative model emphasises positive social outcomes too. Bennet Barth, managing director of the RESPOND accelerator program at the BMW Foundation, describes businesses that not only “move from extraction to a healthy relationship with our planet” but also move towards a healthy relationships “between us humans.” Businesses in the Regenerative Bioeconomy do more than offer a bio-based product. They are part of wider system changes beyond both the corporate world and the value chain they occupy.
An example of a socially sound regenerative enterprise would be a biorefinery whose operations meet the real, pre-existing needs of inhabitants living near their plant and not just the product orders from distant consumers. If the plant is in a heavily agricultural area, they would produce natural soil amendments and organic fertilisers among the multiple high-value products they create.
Business owners would need to understand the economic, social, and cultural outcomes that they want to see in their area, necessitating dialogue with local residents. This would be a far cry from the footloose tendencies of multinationals that set up in locations without meeting local needs.
Who is advancing the regenerative bioeconomy today?
One of the few accelerators targeting regenerative startups is the RESPOND programme. Organised by the BMW Foundation, it claims it is the first to promote both ‘responsible leadership and sustainable business model in line with the UN 2030 Agenda’ for development.
“In my opinion, successful investments in the future will be those that are regenerative or contribute to a regenerative way of doing business.”, says Bennet Barth, program director.
RESPOND looks for startups with working prototypes and business models that could ‘contribute to a fair and inclusive economy within the planetary boundaries’. Those selected for the annual accelerator program are given coaching on business, tech, and regenerative economy, put in contact with a network of entrepreneurs in Europe, and are promoted by at international conferences and on social media.
The 2023 RESPOND cohort was selected just in the last few weeks. Among the ten are many bio-based and circular businesses. One of them is Koralo, which makes no-kill fermented fish protein using just micro-algae and mycelium. The company claims the protein uses 99% less blue water to make than soy products and 96% less Co2 than fish, according to the company.
Another 2023 RESPOND beneficiary is EcoLocked, which focuses on biocarbon – biomass burnt in the absence of oxygen. The material is infamous within bioeconomy circles for having attracted huge interest in its carbon sequestering potential without ever quite managing to scale.
EcoLocked is trying to realise biochar’s climate promise by mixing it with concrete to lower the high emissions associated with making building materials. The company offers customised mixes suited to different construction applications.
Concrete is a material staple of modern society, contributing at least 8% of total global emissions – more than the aviation sector which holds a 2.5% share of global emissions. It is also used in agriculture and water filtration. As populations increase and people buy bigger homes, concretes will become an ever more important target for emissions interventions.
SimplexDNA is a stand-out on the list. The startup offers DNA sampling services that measure genetic biodiversity using just soil, water, or air samples from a habitat. giving a quick and easy snapshot of the health of an ecosystem. Habitat assessment services are a fundamental pillar of regenerative bioeconomies as they give us a quantified understanding of human impacts on the environment.
More work needed
The 2023 RESPOND cohort is overflowing with innovative products, often looking for their very first funding rounds. These early-stage startups are full of ideas and idealism, with the scientific know-how and business acumen to begin their journey towards the market.
However, many exhibit a characteristic all too common in the bioeconomy today: they fail to foreground in concrete terms how they plan to achieve Barth what describes as ‘systemic impact’.
For example, while all claim their products are greener than those they are trying to displace, few provide precise, independently verified figures life cycle assessments. Within the bioeconomy, this should be the most prominent feature in the market- and investment-facing literature.
These details are critical: a lot of whether bio based alternatives can serve IPCC carbon reductions targets depends on how the feedstock being used is grown. Here again, too many bioeconomy businesses fail to outline in clear terms how the biomass feedstock or genetic resources they use will impact the wider carbon calculus.
This is partly a failure of regulation: universal standards for carbon accounting have been hard to achieve. Further, deciding how best to assess biodiversity impacts is still a work in progress.
In today’s bioeconomy, it is still more difficult to find precise details on how companies will achieve the social outcomes fundamental in bringing sustainable tech and practices more squarely into the economic mainstream. This matters since ecologically sound ways of extracting biological resources tends to go goes hand in hand with socially sensitive ones.
Barths herself admits that very few businesses today embody the socially transformative dimension so crucial to his definition of regenerative economy. Right now, however, he sees the RESPOND accelerator’s purpose as taking projects with potential to do so under its wing.
Taking sustainability seriously
The regenerative bioeconomy promises to address concerns with the ESG model as it has functioned so far. Instead of ticking off a balance sheet of emissions reductions, offsets, and green investments, regenerative businesses would form part of and drive wider systemic and social changes from the get-go.
The concept recognises that bringing new technological offerings to market are not enough: to truly meet the challenges of a warming world, business must also put in motion social and cultural shifts that make waste-utilisation, renewability, social equity, and ecologically sound relationships to nature become the default rather than the exception.
Regenerative businesses would be part and parcel of wider social networks and their concerns, beyond narrowly economics considerations and just the stakeholders that are tied to their specific value chain. Beyond company profit, employee pay packets, and even the narrow confines of the monetary economy, they must consider the multifarious ways their operations impact on environment and society.
Bennet Barth of the regenerative business-focused RESPOND programme says this will be a multi-sectoral effort: “We need to bring the capital, as well as key stakeholders from the corporate world, public institutions, governments, and legislators on board to create momentum towards a regenerative economy”.
Working with public authorities would be second nature to regenerate businesses. They would fluidly traverse the public-private divide to maximise their financial viability and socio-ecological outcomes at once.
Material recycling startups are a prime candidate for such a model: the best way to procure reliable, cheap feedstock is by working with local authorities, actors with the organisational acumen and infrastructures required to collect waste.
There’s an even more urgent reason why the regenerative bioeconomy must be a planned, coordinated endeavour – there’s less biomass to go around than we think. Researchers at the consultancy Material Economics reckon that using more than 11-13 extrajoules worth of biomass in the European Union per year for biomaterials and bioenergy would start to undermine key environmental objectives.
We need to ensure that the limited feedstock supply we do have is used for applications with greatest impacts. Only a deliberate plan for the bioeconomy would ensure complete, well-oiled ecosystems of regenerative businesses working to achieve tangible goals, in concert with communities and markets alike.