Regenerative Investing for the Climate

Most of the discussion around climate action has been about getting us from here to there; “there” being a state in which climate-related ills no longer exist and the drivers generating those ills also no longer exist.  However, little thought has gone into understanding what future state such climate action will bring us to. Will that future state be able to support thriving for all human and non-human species? Will it have the necessary ‘wisdom’ to sense and self-correct so that we don’t repeat mistakes of the past? Or, will it follow the same patterns as today thereby creating another global polycrisis over time? 

We need to not only design for a future state in which the drivers and conditions for climate destruction no longer exist, but more importantly, ensure that the drivers and conditions for a healthy and thriving planet do exist. This is a very different mandate than “We need to solve our climate challenges”.

Download our paper "Regenerative Investing for the Climate" here.

The Climate as an Emergent Effect

The planet is a living-system in which the climate is an emergent effect arising from the combination of a large number of interconnected factors acting simultaneously and continuously.  The climate, as we know only too well, has a reflexive effect on the very factors that contribute towards it. These are feedback loops which make differentiating between cause and effect difficult. Equally, it becomes difficult to determine solutions and identify intervention points. Adding to that, any interventions/solutions that are introduced themselves become part of the feedback loop and affect the climate.

What is needed is a way of analysing living-systems as a whole. Unfortunately, the dominant scientific paradigm is based on reductionism in which systems are taken apart to analyse them – quite the opposite of what we need. Note that the act of ‘taking systems apart’ renders emergent effects invisible. There is a developing science of interconnected systems (called complexity science = the study of complex systems) that looks at systems as a whole. This science is better suited for living-systems. But it is an enormous paradigm shift away from the current scientific and mental models. 

We can look to Nature, a living-system within which we all exist, for clues on how to achieve large and sustainable change. As Leonardo da Vinci said: “Nature is the source of all true knowledge”. 

Nature has maintained and sustained life over millennia and at massive scales. We see in Nature that even large-scale phenomena can take shape almost instantaneously (e.g. tornadoes), and that transformations of enormous depth can take place simply and quietly (e.g. a caterpillar transforming into a butterfly). We see hundreds of starlings make de-centralised collective decisions when they change their flight path smoothly without discord. We see Nature find a way to regenerate life even in the harshest lava rocks after a volcanic eruption. We see enormous plant and animal diversity in Nature, every one of those plants and animals equipped specifically for thriving, not merely for surviving as part of some hierarchical food chain. 

In these diverse natural effects there is a commonality, a universal patterning. Perhaps the most important of these patterns is a metabolism-like function in which a living-system receives inputs through its porous boundary, digests it according to its own needs and capabilities, re-structures and re-builds itself (autopoiesis & adaptation), then releases what it does not use. In this process of metabolism there are two core tendencies that are at play: (i) a self-assertive tendency by which the living-system asserts its specific qualities, and (ii) an integrative tendency by which it integrates with the external context within which it exists. These two core tendencies are constantly balanced so that the living-system can function with its full vitality.

There is an active cognition at play in these natural processes, which means that every living-system, no matter how small, expresses agency and is an agent of change. This, in turn means that no system-level change is possible through a top-down enforcement - change happens as a bottom-up coordinated shift by agents of change. The top-down influence functions as a triggering influence only.

Regenerative Investing for the Climate

Our climate challenges are the symptoms of an unhealthy planet. Applying single-symptom solutions, e.g. GHG reduction, is similar to dealing with a patient’s symptoms only. Excess GHG in the atmosphere is an emergent effect resulting from multiple factors working together. To solve it, an approach similar to holistic medicine’s needs to be applied where the underlying patterns are understood, and the planet’s ability to heal itself is supported. 

One of the key ‘underlying patterns’ behind the climate challenges is the current reductionist scientific model which has allowed us, for centuries, to pull things apart, and extract things without regard to the health of the context. The planet’s healing will require shifting this underlying pattern away from reductionism to living-systems. The ‘direct action’ approach, which comes from our reductionist and industrial past, cannot be used for living-systems because the healing capacity is innate in the planet. Instead, we need a ‘supporting action’ that enhances/ revives/ restores the planet’s innate healing capacity. Unfortunately, nearly all of our climate actions take the form of ‘direct actions’: to paraphrase Einstein, we are trying to solve a problem from the same level of consciousness, and by using the same methods, that created the problem.

Further, just removing the drivers and conditions for climate destruction (e.g., excess GHG) does not necessarily result in the drivers and conditions for a healthy and thriving planet. Why not? Because it could very well be that in the process of removing the drivers and conditions for climate destruction we inadvertently impair (or destroy) the drivers and conditions that are necessary for a healthy and thriving planet. Therefore, we must also equip ourselves with a comprehensive understanding of what it takes to sustain life. This is why we need to align with living-systems principles.

Regenerative investing is designed around living-systems principles, therefore, we propose that regenerative investing provides a more fitting approach for climate action. 

Summary

Climate-related work is venturing into new territory; we have not been here before. This work will require humility from all of us. 

A shift from a mechanistic to a living-systems paradigm is critical, but it is not a small shift. It will mean learning to work with regenerative design practices, keeping in-hand not just the conclusions upon which decisions are based, but also the logic pathways by which they were reached in order to be able to adapt our collective learnings accurately. Furthermore, it will mean learning from the wisdom traditions that have always looked at Nature and humans as an integrated whole. There are also powerful technology tools available these days, which can hopefully be used wisely. 

The planet’s climate challenges are symptoms of its ill health. Bringing it back to health will require a ‘supporting action’ that enhances/ revives/ restores the planet’s innate healing capacity. Unfortunately, most climate action is designed for ‘direct action’ which attempts to eliminate the symptoms directly, and too narrowly, without attending to their underlying patterns. 

Furthermore, despite business being recognised as one of the key contributing factors in the climate challenges because of its incessant pursuit of profit and growth, very few climate solutions seek to change the business paradigm itself. RII has developed an investing  framework with a set of guidelines that can move a business towards regeneration, thereby enabling the necessary shift in the business paradigm.

Note:  'Living-System' vs. 'Living System'  

We have renamed ‘living system’ to ‘living-system’ in order to avoid any confusion with the common usage meaning of ‘a system that is living’.  Wikipedia describes ‘living systems’ as “open self-organising life forms that interact with their environment”. That is the same meaning we give to ‘living-systems’.