María Corina Machado and the price of freedom.
There are moments in history when courage becomes a moral necessity. For Venezuela’s María Corina Machado, recipient of the 2025 Nobel Peace Prize, that moment began long before the world knew her name.
Environmental, Social, and Governance (ESG) frameworks have helped channel capital toward companies with better environmental practices or stronger corporate governance. Yet, the landscape of finance is shifting once again. Investors and businesses alike are beginning to embrace regenerative finance, a concept that goes beyond mitigating harm toward actively restoring and enhancing ecological and social systems.
While ESG frameworks provide a baseline for sustainability, they often fail to deliver measurable regeneration or systemic improvement. Recent studies and analyses highlight several structural issues:
ESG investing measures companies on their ability to avoid environmental damage, protect workers’ rights, and maintain ethical governance. For example, MSCI ESG Ratings evaluate over 8,500 companies worldwide based on these criteria. Yet ESG has limitations. Despite the growth of ESG-labelled funds, greenwashing remains a concern, with many funds not significantly altering their impact on carbon emissions or social inequality.
Regenerative finance reframes the goal. Rather than simply reducing harm, it seeks to create positive outcomes for both the environment and communities. The Global Impact Investing Network (GIIN) defines impact investing as capital deployed to generate measurable social and environmental benefits alongside financial returns. Regenerative finance extends this by emphasizing systemic improvement – restoring biodiversity, revitalizing communities, and strengthening local economies.
Example: LeapFrog Investments, a private equity firm, invests in companies in Africa and Asia that provide financial services to underserved populations. Their portfolio companies aim to improve social and environmental outcomes while remaining profitable, demonstrating that finance can grow both wealth and societal value.
Traditional green bonds have funded renewable energy, low-carbon transport, or energy-efficient buildings. Regenerative finance builds on this by financing projects with measurable ecological regeneration.
Case in point: The European Investment Bank (EIB) has issued bonds aimed at financing projects that restore natural capital, such as reforestation and biodiversity initiatives across Europe. Investors receive returns linked not only to financial performance but also to verified environmental improvements. Research from the UN Environment Programme shows that such initiatives can increase biodiversity by 20–30% over five years while providing stable financial returns.
Infrastructure projects are also moving in this direction. For example, the City of Rotterdam funds water management projects that restore wetlands and urban green spaces. These interventions reduce flooding risk, improve urban air quality, and provide recreational spaces – creating multiple layers of ecological and social value.
Beyond bonds, regenerative finance shifts corporate accountability. Companies are increasingly measured by their ability to actively regenerate the ecosystems they operate within.
Patagonia is a prime example. The company goes further than ESG compliance by funding environmental restoration projects worldwide. Through its “1% for the Planet” initiative, Patagonia commits 1% of sales annually to NGOs that protect and restore the natural environment. Over the last decade, the program has directed over $140 million to restoration projects globally.
AI and blockchain are enabling transparency and impact measurement at a scale previously impossible. Satellite imagery and AI-powered analytics track reforestation, water quality, and soil health, providing verifiable data to investors and regulators alike.
Example: Pachama, a Silicon Valley startup, uses AI and satellite monitoring to verify carbon capture in forest restoration projects. Investors can track the actual environmental impact of their funds in near real-time. Such tools transform regenerative finance from aspiration into actionable, verifiable impact.
Blockchain also allows for “impact tokens,” where investors can see a direct link between capital deployed and ecological outcomes. Projects such as Regen Network are pioneering ecosystems where farmers and land stewards receive verified credits for regenerative practices, tradable on blockchain marketplaces.
The ultimate goal of regenerative finance is systemic transformation. It challenges conventional profit-first models by embedding ecological and social regeneration into the core of investment decisions.
Research from the Global Sustainable Investment Alliance shows that assets under management in sustainable and impact investing exceeded $35 trillion in 2023, highlighting growing investor demand (Global Sustainable Investment Review, 2022, 2023). As more capital flows toward projects with regenerative outcomes, entire sectors – from agriculture to energy – are incentivized to transition toward practices that restore rather than deplete resources.
Example: Dutch bank Triodos integrates regenerative finance principles into its lending, supporting companies that prioritize circular economy practices, community wellbeing, and biodiversity restoration. Triodos’ approach demonstrates that financial institutions can simultaneously maintain profitability and catalyze positive systemic impact.
Regenerative finance represents a philosophical and practical shift in how capital interacts with society and the environment. While ESG frameworks helped raise awareness and set standards, regenerative finance pushes boundaries by demanding positive outcomes, measurable impacts, and systemic transformation.
The next decade will be critical. As investors and companies increasingly adopt regenerative principles, we can expect a new financial ecosystem where wealth generation is inseparable from ecological restoration and social equity. Beyond ESG, finance can become a true agent of regeneration.