The Role of Businesses in Regenerating Local Economies — Part 3
Catalyzing a Business Stakeholder Ecosystem to Drive Place-Sourced Economic Development
Article 2, Part 3.
By Beatrice Ungard and Ben Haggard (with the Regenerative Economy Collaborative)
To get caught up, start at part one.
Putting the Stakeholder Pentad to Work
In The Responsible Business, Carol Sanford describes the virtuous loop of stakeholders’ investments and return on investment, including the business imperative for each stakeholder (see Figure 3).
Figure 3: Stakeholders’ Stake and Return on Investment (Reproduced from The Responsible Business © 2011 Carol Sanford)
Building on Sanford’s work, we explore below five principles that a business can use to guide the building of mutually beneficial relationships with each one of its stakeholders and create a business environment that promotes regenerative practices. We use the Playa Viva example to illustrate how the resort put these principles into practice to regenerate the local economy of the Juluchuca community.
Principle #1: Care for customers’ life — beyond what they know to ask for themselves
A business cannot exist unless its customers buy its products and services. Through their purchases, customers seek to enhance their lives and express who they uniquely are. They expect the businesses from which they buy to deliver distinctive offerings with integrity — in other words, to be what they say they are and to stand behind their activities. They seek to build trustworthy relationships with businesses because they want the peace of mind that comes from knowing that a business will consistently meet their expectations. It is therefore imperative for businesses to be true to their words and raise the level of distinctiveness of their offerings to serve and delight customers beyond what they know to ask for themselves.
Playa Viva’s customers are socially and environmentally conscious individuals who value living a sustainable life; they seek to have luxury vacation experiences that respect nature, as well as local cultures, traditions, and communities. Playa Viva knows that to build enduring relationships with their guests they must offer them distinctive and authentic experiences that are in integrity with their values, experiences that go beyond what they would have found somewhere else. Toward this aim, the resort has developed an approach that integrates watershed and community regeneration into the its guest programs, marketing, and facilities.
Playa Viva does this by creating educational, even transformative, programs that connect customers to the local environment and community in ways that are deeply respectful of place and tradition. For instance, the resort’s buildings, which use the best green technology available, have been designed to feel like an extension of the natural surroundings. Furniture featured in the guest rooms is built by local artisans from native and sustainably harvested local woods. The baby sea turtle sanctuary allows visitors to release palm-sized turtle hatchlings to the ocean. Playa Viva offers multiple opportunities for its guests to reconnect to and deepen their own values. Not only are they able to immerse themselves in the beauty of the natural environment, explore local communities, take part in wellness programs, and enjoy healthy farm-to-table dining, but they do so as participants in a process that seeks to regenerate the entire region.
Principle #2: Build developmental relationships with co-creators in service to improving the customer’s life.
In order to be able to deliver outstanding products and services to its customers, a business needs the support of its co-creators: its employees, contractors, suppliers, and other business partners. When working with or for a business, these co-creators invest their intelligence and creativity with the expectation that in return they will learn, develop themselves, increase their creative capacity, and receive a fair compensation for their work. A regenerative business considers all its co-creators as not only members of its team but also members of society. Consequently, it has a responsibility for creating a working culture of personal and professional development that empowers its co-creators to apply what they learn both inside and outside the workplace. That way, the co-creators are able to make a difference that matters for all the systems they care about, not only at work but also in their families and local communities.
From building contractors and workers during the construction of the resort, to current employees and suppliers, Playa Viva draws most of its co-creators from the local community. To build their capacity and capabilities, Playa Viva has worked with community groups to deliver locally relevant educational and training programs. These have focused on subjects like organic farming, waste reduction, or habitat management. In addition to the turtle sanctuary that employs local workers, Playa Viva has helped to establish a local salt co-op to ensure that salt harvesters received a fair business price. It has also built deep relationships with local businesses and artisans, offering guest excursions that provide a taste of the region’s history and culture while enabling locals to generate an income. In this way, the resort has been able to support entrepreneurialism within the community.
Principle #3: Cultivate a partnership with Earth and discover ways to enrich the distinctiveness of the contributed materials that are sourced.
Any business has a responsibility for regenerating the natural ecosystems in which it operates or from which it sources raw materials. Earth invests resources (raw materials, landforms, climates, ecosystems, unique places) to support living processes and evolution of humans and other living systems. It must therefore sustain the capacity to continuously regenerate itself, thereby evolving higher orders of life expression wherein ecosystems increase their resiliency, diversity, connectivity, complexity, and capacity for evolution. Because each place on the planet is unique and characterized by highly differentiated lifesheds from which all raw materials are derived, a business has the imperative to respect and enhance this uniqueness as a core aspect of its value-generating activity.
Playa Viva has been designed with the best green technology available including 100% off-grid solar energy, salvaged and eco-friendly building materials, natural cooling systems, and biological water treatment for grey and blackwater, along with water reuse and extraction of nutrients to enrich soils [1]. But the care for Earth went a step further. Very early on during the project’s planning phase, the project team realized that It would make no sense to design and build a sustainable hotel within the limited boundaries of the property while neglecting the surrounding, highly degraded ecosystem. Located at the intersection among salt- and freshwater systems, Playa Viva was positioned to play a key role in the restoration of the estuary, including the restoration of the coastal forest and wetlands, bringing back the mangroves, hardwood trees and a variety of indigenous flora and fauna [1]. The team launched multiple initiatives to revitalize the land, including organic farming, permaculture, reforestation, and agroforestry projects. Over time, these projects improved soil quality, water retention capabilities, carbon sequestration, and habitat improvement. These solutions, located both within and outside of Playa Viva’s property boundaries, became teaching models for guests, local farmers, local contractors, and other resort owners in the area. Over time, this has encouraged multiple other projects in the area, considerably extending the benefits to the whole ecosystem.
Principle #4: Engage communities consistent with the distinctive story of that Place.
In return for sourcing materials and for the effects its operation has on a place, a business must become a partner to the communities in which it operates. Ultimately, a community’s wellbeing depends on the vitality and viability of its place, so it has a lot at stake when a new business enters its economy. A community invests its unique identity and its social and cultural web of relationships and infrastructures. In return and in order to thrive, a community must increase the wellbeing of its members while minimizing disparities in opportunity so that everyone has the chance to grow and to make meaningful contributions. A community must do so by pursuing economic development that reflects and strengthens its uniqueness and identity. Therefore, a business has an imperative to ensure its operations are grounded in an understanding of place. In addition, it must help other business leaders in its stakeholder ecosystem do the same, thereby strengthening everyone’s connection and commitment to the integrity of place.
At the onset of the project, the Playa Viva team engaged members of the local community to explore the inherent potential of the place they lived, learn about local aspirations, and uncover the regenerative role the resort could play in restoring the harmony that once existed between the land and the people. In the process, they uncovered a rich history that had largely been locally forgotten. Playa Viva launched public education initiatives to disseminate this history and articulation of potential. This helped the community to reconnect to its core identity and empowered it to take charge of its own evolution, a welcome alternative to the colonialist patterns of control that so often accompany high end development.
Principle #5: Educate financial investors on the benefit of regenerative thinking so that they can fuel the next cycle of growth.
Financial investors support manifestations of creativity to generate steadfast growth. They invest the capital of accrued equity and expect businesses to return growth and income. A regenerative business, however, will ensure value return, not only financial return, for all stakeholders. In addition, a conscientious business enhances the perception that investors and capitalism provide meaningful contributions to all of society, restoring a reputation that has been severely battered by predatory behaviors on the part of many corporations and their investors. To achieve this, a business has the imperative to exercise discipline and rigor, consistently operating from sound principles and paradigms in order to achieve systemic return on investment.
Playa Viva has enlisted its guests as financial investors in diverse local initiatives through a Regenerative Trust. Two percent of guest fees is added to the total bill as a contribution to the environment and community of Juluchuca. The funds serve to support the Turtle Sanctuary and other environmental and community development initiatives. Most guests embrace this opportunity to invest in the regeneration of a region that they have come to love, and some go on to invest directly in local programs and projects.
Healthy Stakeholder Ecosystems Mean Healthy Businesses
When a business considers its five key stakeholders as an integrated and dynamic system, the whole system coalesces as a web of reciprocal exchange. Each member receives and contributes value to this web, thereby reinforcing the vitality and viability of the whole. Members are interdependent, and with some education can learn to support one another’s capacity to invest and receive a return for this investment. This virtuous cycle of reciprocal support requires no trade-offs from the business, but it does require strategic, living systems intelligence. By developing this capability, a business not only reinforces its own creative capabilities, but it increases its economic viability by making itself non-displaceable — an essential member of the local economy.
For this reason, we propose that there is no inherent conflict between business success, community success, and responding to the critical issues of our time. From a regenerative perspective, the most powerful way to address climate change, ecological collapse, social injustice, economic inequality, and a host of other issues is through growing the capacity of local places to regenerate themselves. Business has a critical role to play in this important work, and we would like to encourage businesses of all shapes and sizes to come together to regenerate the local economies within which they operate.
Announcing The Regenerative Entrepreneur Communities (TREC) Series
Launched in Mexico City at the end of 2019 and expanding to the U.S. in 2021, The Regenerative Entrepreneur Communities (TREC) is a developmental, place-sourced initiative for businesses and entrepreneurs seeking to have more regenerative effects on their local economies. It is supported by a multi-year educational process designed to enable participating companies to become economic change leaders in the places where they do business. This initiative is a partnership between Beatrice Ungard (Soma Integral Consulting, USA) and Sidney Cano (DUIT, Mexico) with the support of Ben Haggard (Regenesis Group, USA). Please contact Beatrice Ungard (beatrice@soma-integral.com) for more information.
References
[1] Beatrice Benne and Pamela Mang 2015, Working Regeneratively Across Scales — Insights From Nature Applied to the Built Environment, Journal of Cleaner Production, Volume 109, December 2015, Pages 42–52.
[2] https://www.minneapolisfed.org/publications/fedgazette/the-walmart-effect-poison-or-antidote-for-local-communities; https://ilsr.org/impact-chain-stores-community/
Acknowledgements
We thank our reviewers from the Regenerative Economy Collaborative — Sidney Cano, Karryn Olson-Ramanujan, and Michelle Halle Stern for the comments and suggestions they provided about this article.
