How can adopting regenerative principles unlock a sustainable future?

A global economic system in polycrisis

Key economic forces – policy, technology, citizens, finance and business – all have huge roles to play in either reinforcing the inertia and the lack of trust that holds the dominant system in place or helping build confidence in, and momentum behind, the transition to a new state. While there are worrying trends indicating we are at risk of locking ourselves into an unsustainable future in the long term, there are equally promising signals that we are at a pivotal moment for transformation, one where the crises we face today could become the catalyst for an economic reset.

These positive trends can be seen in the growing number of frameworks and initiatives for economic transformation increasingly making their way into the policy discourse; the rapid advancement of renewable and regenerative technologies and the transition to a digitally enabled economy. Similarly, the cultural shift toward eco-conscious, experience-based and values-led modes of consumption; the growing role of finance in mobilizing capital toward sustainable projects and technologies; and the expansion of sharing economy, ecosystem and other innovative business models that challenge traditional paradigms for success, all hint that change is already underway.

Translating these early signals into widespread action requires intentional collaboration across all economic actors to remove structural barriers and create enabling conditions for change. Should there be deliberate, confronting and urgent moves away from the systemic flaws perpetuating the polycrisis, a new, regenerative economy founded on human and planetary flourishing is still within reach. To accelerate the transition, we believe that strategies and decisions made today (and in the future) would need to be guided by five principles:

1. Sufficiency – enough for a good life within planetary boundaries
2. Circularity – aligning production and consumption with nature
3. Systems thinking – connecting the dots to catalyze systems change
4. Value redefined – putting human and planetary flourishing at the heart of value creation
5. Equity and justice – achieving shared and lasting prosperity for all

We sit at a critical inflection point, with two future economic systems in view: one deeply entrenched, the other slowly emerging, and both likely to continue vying for dominance. We recognize that most (if not all) businesses today would find their business models not only misaligned but, in many cases, even in conflict with new economy principles. After all, it is a given that a business cannot be truly sustainable in an unsustainable system.

Yet, a growing number of businesses are recognizing their role – as the most economically powerful and environmentally impactful bloc on the planet, and a critical link between policy and real economy action – in accelerating momentum toward, and building confidence in, a regenerative future. Recognition is also growing that navigating inevitable disruption and maintaining relevance and competitiveness in a future radically different from the present requires deeper transformation, without which businesses risk being left behind. 

Evidence of this change in mindset abounds, with even large, established businesses beginning to change in small but meaningful ways. The fashion industry, for example, is increasingly recognizing the importance of optimizing resource use and minimizing waste, with many businesses encouraging people to buy fewer, high-quality, enduring pieces. In the electronics industry, initiatives for recycling electronic waste and designing products for easy disassembly are gaining traction. In mobility, manufacturers are embracing sharing and service models and collaborating with road networks to create whole-of-system solutions. In agriculture, businesses are implementing regenerative agriculture practices; reducing food waste, and partnering with farmers to create more equitable, inclusive and resilient supply chains. And some large businesses are adopting the legal status of B Corps, or similar, to enshrine their commitment to sustainability and the pursuit of value beyond the financial. 

While achieving the shifts needed will be a long-term project, the policies and strategies being set in the short term will define which future will prevail. The questions we must therefore ask ourselves are: Which future will we gift to the next generation? And what is our role in bringing it about?

To delve into them in depth, exploring data points, practical actions, real-world examples and questions for reflection regarding your and your organization’s role in the new economy, you can read the full review: A new economy: Exploring the root causes of the polycrisis and the principles to unlock a sustainable future (pdf).

About the New Economy Unit

The New Economy Unit (NEU) is a research and insights team within the EY Global Climate Change and Sustainability Services (CCaSS) practice. The NEU focuses on the long-term, systemic shifts toward a new, regenerative economy.

We recognize that the scale of the challenge is beyond the remit of a single company and requires collective effort to address. We want to engage, share ideas and co-create with others doing research in this space, and with anyone who’s interested in bringing about a more equitable and liveable future.