How Business Can Improve the World, Not Just the Bottom Line | Esha Chhabra | TED

Business as we know it has been focused on scale, growth,

productivity and maximizing profit.

It's that hustle culture that we love, right?

The faster the growth, the better; the more money, the better.

And yet that hasn't really worked.

I mean, the planet has clearly taken a hit,

but also, I think people are fed up

and seeking for more balance in their lives.

So to rectify this, over the last few years,

we saw the rise of sustainable and mission-driven brands.

These were companies that started with a very simple model of:

you buy a pair of shoes, we'll donate a pair of shoes.

Then it became "we'll be conscious companies,"

"we'll recycle our waste,"

and most recently, "we'll use carbon offsets."

Well, that’s all well-intentioned, and it truly is,

but sustainability has become more marketing than action, it seems.

It hasn't really moved the needle on what is the core purpose of business

and the core model of business.

So I see it as: it was a great step one, good effort,

but now it's time to move to step two.

And what is step two?

It's regenerative.

You may have heard of the term.

It’s been all over the news lately, in Vogue, in New York Times,

in Outside magazine.

These are just some headlines.

New York Times said it best, I think most succinctly.

“Regenerative: it’s like yoga, but for farmland.”

(Laughter)

Not quite.

So what is regenerative,

particularly in the context of business?

Regenerative businesses are looking to restore,

revive and bring to life communities, industries and people that are struggling.

It's actually much more than just a term.

So I’ve been reporting for over 10 years on business,

social issues and the environment and how all of that overlaps.

I have seen my fair share of doom and gloom headlines.

I think we can all agree we've got problems in the world.

But as I was doing this reporting,

I kept meeting entrepreneurs

that were really looking beyond the crisis at hand

and focusing on solutions.

So I decided to write about their stories and their regenerative businesses,

which don't start with this question

or intent of how do we make the most money by selling you X, Y or Z?

Rather, they ask a really simple question:

What problem are we going to solve?

What social and environmental problem are we going to solve?

And so it's not about just selling you another great pair of jeans

or a great cup of coffee or a nice hotel stay,

unless all of that has impact embedded into it.

In fact, I like to think of regenerative companies as a multi-tiered cake.

It's layer upon layer upon layer of impact,

which makes the whole thing enticing.

It's not just one thing you do off to the side

or one aspect of your company.

It's every tenet of the company is focused on impact.

And so what are some of these tenets they might be thinking about?

Well, if you have a supply chain, if you're in manufacturing,

you're definitely thinking about the environment

and the people that are involved in that supply chain.

In fact, they're not your supply chain, they're your partners.

If you're in the services industry, yes,

you're thinking about your environmental footprint,

but also are you fostering better human connections?

And how are you going to fund this company?

Because the capital that you take on is going to determine

how you run the company for years to come.

Are you open to employee ownership, profit-sharing?

That can have serious social impact in the world.

And most of all, are you inspiring and improving people's lives at work

or just keeping them afloat?

Because I think we can all agree that we want to be treated with respect

and work with purpose these days.

So it's every hub and spoke of the company

is thinking about impact, not just one.

And that’s why, when I turn to these entrepreneurs,

and I would ask them, "Well, what's your take on sustainability?"

They would sort of push back and say,

"We don't really use that word around here."

It was almost as if they were allergic to it.

They said, "Because, what are we sustaining?

A broken system, the status quo?"

I mean, that's what it suggests, right?

Now regenerative is not a one-size-fits-all.

For large global companies,

this is going to be a harder and slower transition

for reasons we can discuss afterwards.

But for small- to medium-sized companies, it’s very doable.

In fact, it's already happening.

And so it's lovely to talk about all this in theory,

but let's put it into context with some examples, shall we?

You may have heard of the shoe brand Veja.

They're quite popular these days,

but 20 years ago, when they started,

the two French cofounders started with less than 20,000 Euros,

and they had very little fashion experience.

And yes, they were selling shoes,

but they were looking to do something far more meaningful.

They wanted to preserve the Amazon,

hire people that are considered unemployable,

regenerate soils and challenge the fashion industry as a whole.

So a few years ago, I had the opportunity to go down

and see one of their supply chains in the Amazon in Brazil.

And it was beautiful and green and biodiverse.

And the supply chain that I focused on was rubber.

So Veja sources native rubber from the rubber trees in the Amazon

for the soles of their shoes.

These trees can harvest rubber for years, if not decades

if it's done properly and it's done by rubber tappers.

These are individuals who live within the Amazon,

and their other option for a livelihood is cattle farming.

But thanks to Veja,

they were able to make the same amount of money,

if not more money, tapping trees for rubber

than they would be doing cattle farming.

And cattle farming requires you to level the land,

to get rid of the trees.

Here, the trees get to stay upright.

This is an example of a regenerative design,

where a company thinks about the environment

and its people from the beginning.

That rubber is then taken down to their factory

in the southern part of Brazil, in Porto Alegre,

where it meets up with organic cotton that comes from another corner of Brazil

and is turned into a shoe.

That shoe then sails across the sea,

and only by sea, to France.

Now here again, Veja had an opportunity.

They could have hired any fulfillment company to do their fulfillment.

Instead, they decided to partner with a nonprofit.

This nonprofit hires individuals that come from marginalized neighborhoods

and are considered unemployable,

and gives them a chance at a career.

Those individuals are responsible for shipping the shoes out to customers.

So it's layer upon layer of impact.

And one more.

Veja decided early on

that they were not going to get so involved in the marketing game,

so they don't pump loads of money into athletes

and influencers and models to wear their shoes.

The money goes back to the supply chain.

The materials cost more,

but the people who make it also get paid more.

Every hub and spoke of the company --

(Applause)

Every hub and spoke of the company is thinking about impact.

So making a shoe has a footprint on the planet

and no solution and no company is perfect,

we can all acknowledge that.

However, when we ask this question, can business do better?

Definitely.

Here's just one example in fashion.

Looking beyond fashion,

what does regenerative business look like?

Well, some of them use employee ownership and profit-sharing.

Here’s a company in Arizona called Technicians for Sustainability

where the owner of the company realized early on

that the folks who are responsible for installing the solar panels

on the roofs

are not going to amass personal wealth doing that job.

So he opened up the profits of the company to his employees.

Today, 40 percent of the profits every year go to the employees.

And what's great about it is not only are they part

of the transition to renewable energy,

but they're investing in the people that are making it happen.

Regenerative companies think about waste differently.

They see it as an opportunity rather than a burden.

If you've been across the pond to the UK,

you know that the Brits love their ready-to-eat sandwiches.

You can find them on every corner shop.

Well, to make those lovely sandwiches,

you have to unfortunately sacrifice the end slices of loaves

and so those end slices would often go to waste.

Well, a food waste entrepreneur and a social entrepreneur got together

and said, "Why don't we turn it into beer?"

And that became Toast Ale.

And so now Toast is available throughout the country in pubs,

restaurants and in grocery stores.

And they've gone one step further.

The profits of the company now go to a charity that's focused on food waste.

(Applause)

And regenerative, the term you may have heard of,

has its roots in regenerative agriculture.

That's where it's being used most prominently these days.

Well, here's a gentleman, David Vetter,

who's been doing it far before it was trendy.

He is the son of a military veteran-turned-farmer

who lives in the cornfields of Nebraska,

in the heart of big ag and conventional ag.

But him and his dad decided early on

that they would go down the route of regenerative organic farming.

They grow regenerative organic grains.

And if you talk to David, he will tell you,

"Soil is something you grow crops in,

dirt is something you find under your bed.

You ought to know the difference."

There is a difference.

And as the company has grown and as the family has grown,

the Vetters have also put a processing unit,

a mill on their facility,

which now allows other farmers in the area who want to also do organic farming

to be able to get their products closer to the market.

If we can create these links,

we can get these products closer to consumers.

So these are just some examples.

I mean, I could rattle on many more examples of these kinds of companies,

but when I asked them fundamentally, "I said, OK guys, what's next?

What do we have to do?"

Many of them said to me one simple thing.

We have to tell these stories further and wider.

The cofounder of Veja said to me something

that I thought was quite poignant.

He said, "We don't need Veja to be the next global ethical shoe brand.

We need dozens of Vejas.

We need dozens in every industry, in every culture, in every geography.

Replication is the answer."

And that brought up another conversation about scale.

Many of the entrepreneurs said to me,

"We don't all need to reach astronomical heights.

Not every company needs to be a global company.

It should be OK to say we are good with this level of scale.

This is enough."

And that fundamental question, of how much is enough,

has come up year after year in my reporting.

Ask yourselves personally how much stuff, house, food,

consumption is enough.

But also, as business leaders,

how much growth, scale, profit is enough

to feed our greed and our egos sometimes.

So I leave you with this thought.

We're all here, on this flying rock, for a moment in time.

We can't take any of this stuff or any of this wealth with us.

So why not use this time to build businesses

that think beyond profit?

Why not build organizations

that regenerate the environment instead of destroy it?

Why not build organizations and companies that have a workforce

that treats people as humans and not as transactions?

I think it's time that we really redefine business.

Thank you.

(Applause)