Regenerative Finance : a new proposal to address sustainability

Abstract

Regenerative Finance emerged in response to the Great Recession of 2007-2008 and the subsequent financial crisis, which exposed the erosion of the financial system. Its foundation is on Regenerative Economics, proposing a new economic system and framework for a regenerative civilisation that will reshape the future of Finance. It contrasts with various other propositions, such as ESG, DEI, and Green Finance. This thesis aims to define Regenerative Finance and how it differs from traditional extractive Finance and investment business models. How “ReFi” challenges the habitual mindset behind the Financial industry, which prioritises maximising profits at the expense of communities, living ecosystems, and the environment, generating “a triple planetary crisis of climate change, pollution, and biodiversity loss”. How it plans to transform the financial system, addressing inequality, and setting forth regeneration. The study employed secondary data collection gathered from official sources, including the UNFCCC. The presentation is descriptive and employs thematic analysis, identifying core themes typical of social science projects. This research examines the technology substructure, which serves as an intersection between Web3, characterised by DAOs, blockchain, Decentralised Finance (DeFi), Crypto, NFTs, and tokenisation as its tools for regeneration. It explores all their technical specifications, the principles behind these innovations, implementation, and challenges. Additionally, there are Natural Capital-Backed Assets (VCM, Biochar, etc.), which function as a novel solution to preserve natural resources, employing technologies such as Tokenization. It encompasses socio-economic and political aspects, examples of ongoing ReFi projects, criticism, challenges, and/or fraud that ReFi may encounter in practice, beyond the theoretical.