Regenerative Finance is the process of using various forms of capital to drive systematic, sustainable, and positive change for all stakeholders. ReFi aims to direct investment toward regenerative businesses in order to accelerate their growth and help them scale up their impact.
Most of us have already heard about NFT’s and carbon credit but there are two additional trends concerning ReFi:
Smart Contracts and Regenerative Agriculture:
Farmers are extremely vulnerable to climate change as changing weather patterns threaten their livelihoods and homes. Smart contracts can help farmers increase their resilience to this risk by, in the short term, improving the accessibility and accuracy of crop insurance. Farmers can be insured against weather-related disasters such that if a season’s crop is ravaged by a flood, farmers will be protected against financial ruin. Further, the smart contract will deliver the payout immediately, which is particularly critical for farmers who may have been relying on the harvest for their own household’s food.
Blockchain and Cross-Border Collaboration:
The Blockchain for Climate Foundation is advocating to “put the Paris Agreement on the blockchain” to provide the infrastructure for cross-border collaboration on emissions reduction. The Foundation asserts that “emissions reductions outcomes are the most important, and soon to be among the most valuable, assets of the world.” Building a coordinated infrastructure to facilitate emissions reduction is critical to make the process efficient and effective.
It is often difficult to realise to what extent distributed technologies will be embedded in our lives in the near future. No doubt this issue of regenerative finance will gradually take hold.
Credit: Jesus H.
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