Regenerative Investment Lab: Does a Market System Have to be Degenerative?
It’s time for new ideas, fresh thinking. The business and finance system as we have it is degenerative. Matthew Phan welcomes us to a new dawn for regenerative business.
In 2021, North Star Transition’s Finance Transition Lab conducted research across the capital chain and established that the ideas needed to reshape business and finance cannot be crafted solely by people from finance. That Lab is now morphing into the Regenerative Investment Lab, launching October 2022. We have a new partner, Forum for the Future – a leading international non-profit – and continue to work closely with existing partners Preventable Surprises and the Climate Action Unit at UCL. We are very pleased that CFA Institute has agreed to become the Lab’s first sponsor.
So, what’s new?
Thanks to Forum for the Future, we aim to involve corporates much more closely in the discussion. Our previous efforts focused on financial institutions, but we realized that finance and business are two sides of the same coin. If investors can be seen as suppliers of capital and demanders of assets, businesses are the flip slide – demanders of capital and suppliers of investable assets. Given the need to collaborate and innovate, any discussion with just one side of the table would be incomplete.
Our end-goal remains the same – we want to know what a regenerative economy and market system looks like, and take steps toward making it real. Our approach also remains the same – map and understand strategic challenges, collectively brainstorm and develop practical ideas that could potentially have systemic impact, and then test these ideas in actual situations, whether participants’ own fields or organizations, or in the active projects North Star Transition is already engaged in.
A natural question which has come up is, what are some examples of these concrete, action-based projects?
To illustrate, we share below some of what North Star Transition has worked on this year:
Wales Transition Lab
What started as a one-off online meeting has become NST’s flagship project. Wales Transition Lab is now two years in the running. “In October 2020, a group of 35 thought leaders across Wales got together to listen to each other and imagine a country that future generations could thrive in”, runs the first sentence of our record of that time. Out of this emerged four ambitions – to optimize the food system, to better connect nature (land, rivers and air) and the community, to give all stakeholders a voice at the table, and to find solutions that connected these different elements.
While that might sound high-level and airy-fairy, one practical outcome is the completion in July 2022 of an in-depth feasibility study for the NHS, to establish a supply of locally and sustainably farmed food for a hospital. This could improve patient diet and health, thereby relieving pressure on NHS budgets, support local farmers and the local economy, driving jobs and growth, and drive nature-positive outcomes on Welsh farmland, helping to address the climate and biodiversity crises. While the budget for a single hospital is only £2 million, if executed well, it could become a playbook for other hospitals, and even schools and prisons – amplifying impact to over £100 million.
Wales Transition Lab is now working on how to make an entire landscape healthy – the chosen area of focus is across south Wales, and will need individual but aligned actions across thousands of farms, businesses, public sector organisations and citizens. Such a transformation will yield economic, health, social and environmental benefits across the nation of Wales. North Star Transition is working on new finance models which will enable a billion pounds of funding to be raised for soft/green infrastructure.
Other potential ‘spin-offs’ from Wales Transition Lab currently include a discussion with the Welsh health boards to design a more nutritious food agenda, which goes beyond hospital menus, and an extension of the idea to Scotland, with the set-up of Scotland Transition Lab, in partnership with the Global Soil Health Programme at the University of Glasgow.
Anglian Water
Meanwhile, the idea of landscape regeneration has brought North Star Transition into discussion with other groups, including Anglian Water, a utility, which is planning a £3 billion reservoir investment in the east of England. With Mott MacDonald, an engineering consultancy, North Star is tackling the question how to achieve, measure, and finance environmental co-benefits around land, water, flood risk, biodiversity and others, alongside the planned construction of reservoir infrastructure.
Again, North Star Transition has started by convening stakeholders; already some extremely interesting discussions have taken place between engineers, conservationists and investors. These are taking North Star Transition in the direction of thinking around landscape transformation and how to finance it – a fair distance from (though perhaps intuitively connected to) food and public health in Wales!
These examples are intended to give ideas, but certainly not constrain, where we think discussions might lead. Participants are of course welcome to bring their own real-life examples and challenges, whether in their own organizations or fields, or in areas of interest.
Business and finance are two of the most powerful forces in our society today, and we must harness them if we want a better world. Yes, it is time for a new dawn.
Regenerative Investment Lab is a North Star Transition initiative, in partnership with Preventable Surprises, Forum for the Future and UCL’s Climate Action Unit. The Lab’s first sponsor is CFA Institute. For more information on how to participate in this important initiative, please email North Star Transition.
