It’s idealistic. Change takes time. We’re doing what we can. The market’s too small. Those are some of the comforting lies today’s market winners tell themselves about regenerative and circular technologies.
Confirmation bias fuels euphoric bubbles that ignore inconvenient facts, like planetary overshoot and its economic implications. For a time, markets can drift from reality, but eventually, they correct.
The current market bubble ignores the foundation of all value creation: a thriving planet. It hosts all market booms and crashes — 1929, 2000, 2008 — which reminds us that consensus-driven conviction, empty of strong fundamentals, often precedes collapse.
Seven of the nine planetary boundaries (the limits that make Earth habitable) are now in danger zones. Global consumption drives well over half of our planetary overshoot. We are in crisis mode, yet the technologies we need remain deeply underfunded.
The funding gap for the technologies we need now
Agriculture, food, and land use have by far the largest planetary impact; funding for this sector needs to increase by 43x by 2030. In industry — the hardware and software systems that power our material economy — the funding gap is 16x.
Today’s AI spending spree shows that capital doesn’t lack where there’s market consensus. When the very system, planetary health, that sustains every industry is treated as “too expensive” while billions pour into AI, which is itself dependent on finite natural resources, a few things become obvious:
- Investing is still done as if planetary health weren’t what makes it all possible — despite awareness that it is, allocation decisions have yet to adjust accordingly.
- Confirmation bias and blind optimism are so strong that not even a worsening planetary crisis has been enough to push the market to correct toward planetary reality or to move materially in that direction.
Investing within earth’s limits
A growing group of investors, corporations and innovators across the world have stepped outside this bubble and are using Earth’s limits as a compass for scalable innovation that redesigns how we extract materials and produce and consume goods.
The science is unambiguous: The next five to ten years are pivotal for limiting global temperature rise and reversing planetary overshoot. And that same science shows that a radically different global economy can operate within planetary boundaries, but only if we invest today in technologies that can scale within the coming decade.
Across the capital stack, investors are acting on this reality. Invest-NL, the Netherlands’ sovereign wealth fund, explicitly targets circular and emissions-reducing technologies to attract global capital and accelerate scale. From corporates like IKEA to cities like Amsterdam, there are commitments to 100% circularity and operating within planetary limits. Businesses are already proving the regenerative model works by turning waste into high-value materials, redesigning consumer products and scaling novel business models that create economic value through planetary and human health, not despite them.
For example, Cruz Foam produces compostable, high-performance Styrofoam from food waste that outcompetes polystyrene. Nature Coatings replaces fossil-based carbon black with a bio-based pigment made from wood waste. Matter’s filtration tech stops microplastics before they reach waterways. These companies are scaling not through subsidies or philanthropy, but because they are cleaner, cheaper and faster.
Still, most of the market has not caught up. Many still invest as if the economy floats on a white canvas, but when water floods your home, the air you breathe turns toxic and the costs of living rise, the illusion of separation between a thriving market and a thriving planet collapses.
The 21st century’s most durable investment thesis
As venture capital investors, we build conviction daily, grounded in the physical reality of Earth. We believe the best investments of the 21st century are those that connect regenerative production and consumption to today’s market conditions.
Investing in circularity and regeneration is pragmatism, not idealism. It’s the most robust investment thesis available. Regeneration is how life creates abundance. If our economy is to continue generating value, it must follow suit.
Frameworks like CRISP — Circular, Regenerative, Impact, and Sustainability Performance — help us navigate complexity and translate impact into numbers. CRISP measures absolute reductions in waste and material intensity, tracks recyclability and durability, and links these metrics directly to financial outcomes.
For the first time, as we announced during NYC Climate Week in September, we applied this state-of-the-art framework to our portfolio in our latest impact report. We developed the framework with our strategic research partner, Circle Economy, pioneering the use of metrics such as linear resource use avoided and the alignment of our portfolio to planetary boundaries.
We believe all investors will eventually have to wake up to the notion that the future of returns lies in investing like nature would, in regenerative and circular technologies that rethink how we produce and consume on planet Earth.
Dan Fishman is a general partner at Regeneration.VC.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha. Disclosure: Regeneration.VC is an investor in Cruz Foam, Nature Coatings and Matter.
