Regenerative Finance, also known as ReFi, emerges as an innovative movement, adopting a holistic approach to finance and focusing on broader investment criteria that encompass Environmental, Social, and Governance (ESG) aspects to determine investment value. The regenerative finance ecosystem seeks to promote changes in productive and economic models, aiming to make them more sustainable through tools and incentives.
The theoretical foundation of ReFi can be found in the works of Humberto Maturana and John Fullerton. Maturana introduced the concept of autopoiesis, which describes the internal processes of creation and maintenance present in living beings. From this idea, the proposal arises to drive initiatives that aim to regenerate the spaces and processes necessary for the continuity of life on the planet. On the other hand, Fullerton, a financial manager, proposes a transition to more sustainable economic arrangements through new financing models.
Blockchains are decentralized networks with immutable records, eliminating the need for trust in a person or institution to validate transactions, thanks to the technology itself that supports them, with its transparent and public protocols. These characteristics are fundamental to the ReFi movement since they allow the creation of records that assess the ecological behavior of companies. Additionally, blockchain's tokenization and validation technologies enable the development and implementation of incentives for communities and owners of preservation areas.
The central goal of regenerative finance is to use money in a community-oriented manner through decentralized finance to generate collective value that improves the quality of life for the entire community or disadvantaged segments. This value is not limited to monetary aspects since regenerative finance has a comprehensive view of economic, social, cultural, and environmental processes. The intention is to promote a culture and an economic system in which companies, funds, industries, individuals, and groups focus their efforts on business decisions, investments, or developments that have a positive impact on the environment and the common good.