LAUSR

Organisations can play a decisive role in steering societies towards sustainable, resilient, and regenerative pathways of development. However, little is known empirically about how they do so. Such knowledge is vital as COVID-19 has laid bare the need for a wide range of systemic transformations. We examine the role of Sustainability-Oriented Hybrid Organisations (SOHOs), which use market related practices to solve social and environmental problems, in building foundational transformative capacities for regenerative sustainability. We further develop an existing framework and operationalise transformative capacities as: (1) reconnecting social and ecological systems dynamics in ways that are mutually supportive, healthy, and regenerative of life-support systems;(2) fostering healthy individual and political agency;and (3) contributing to building rich community relationships and enhancing social cohesion. Through this lens we explore the practices, activities, and strategies of nine SOHOs in and around the Metropolitan Area of Barcelona. We show that SOHOs emerge from and are decisive in further building transformative capacities within communities creating contagious virtuous cycles. However, their strategies and associated actions may also harm the development of these capacities at the urban scale. Broader institutional innovations, enabling environments, and continually adaptive and critical learning approaches are needed to avoid unintended negative consequences. © 2021 Elsevier Ltd