Scaling Regenerative Supply Chains in Agriculture: An Integrated Framework of Digital MRV, Transition Finance and Socioecological Resilience

Abstract

ABSTRACT Regenerative agricultural supply chains (RSCs) generate substantial ecological value through improved soil health, biodiversity and climate resilience, yet this value remains largely excluded from financial valuation. This structural disconnect, termed the bankability gap, constrains capital mobilisation and limits the scaling of regenerative transitions. This study develops a qualitative system dynamics model, formalised as a causal loop diagram (CLD), to analyse the feedback structures that generate and sustain the bankability gap. The model integrates farm‐level bioeconomic dynamics and market‐level digital financial infrastructure within a unified analytical framework. The model identifies five reinforcing loops (R1–R5) and one balancing loop (B1). The bankability gap emerges as a structural property of the system rather than any single barrier. During the early transition phase, B1 dominates, creating a temporal trap that suppresses adoption even when ecological performance is positive. Transition finance, digital MRV scaling and asset standardisation are identified as sequential leverage points that shift loop dominance from constrained to virtuous system dynamics. The findings offer integrated guidance for financial institutions, policymakers and supply chain actors seeking to align ecological performance with capital allocation.