Developing Conceptual Foundations

Our first-generation research agenda presents the arguments for engaging in academic research and other conceptual work, describes our approach to research work, and identifies the priority research questions for our initial inquiries.

By Dominic Hofstetter

The TransCap Initiative exists to improve the way sustainable finance is purposed, designed, and managed so that money can become a transformative force in building a low-carbon, climate-resilient, just, and inclusive society.

We believe that the key to accomplishing this vision is to inspire and enable purpose-driven investors to leverage the insights and tools of systems thinking and complex systems science for addressing the most pressing societal challenges of the 21st century.

In pursuit of this ambition, we are building a collaborative innovation space for developing, testing, and mainstreaming a new investment logic at the intersection of systems thinking and finance practice. We call this logic systemic investing.

What, exactly, systemic investing is and how it can be operationalized sits at the heart of the TCI’s mission. The starting point for this exploration, framed as a hypothesis, is articulated in our white paper.

The Role of Research

The involvement of researchers in the development, validation, and dissemination of the ideas that sit at the heart of systemic investing is a key operating principle of the TCI.

Research is important because systemic investing is not yet a robust methodology, and because its relevance has yet to be established. There is a need to define what systemic investing is, what distinguishes it from other approaches, why investors should care about it, and how it can be operationalized and evaluated.

It is essential that these questions be explored with rigor so that what emerges from these inquiries is robust and can hold up when challenged.

Specifically, research will serve the following purposes:

  • Build the theoretical and conceptual foundation of systemic investing: generate original knowledge, develop artefacts (methods, tools, concept notes)
  • Establish the relevance of systemic investing: provide scientific arguments, illuminate historical and contemporary cases where systemic investing has catalyzed transformative change
  • Bestow rigor upon the field: test hypotheses, interrogate assumptions, validate claims
  • Formalize knowledge: empirically test theoretical foundations, develop mathematical models
  • Introduce objective clarity and structure to the field: provide definitions, create taxonomies

Our Approach to Research

Our ambition is to build a diverse research coalition consisting of leading universities, research institutes, and other societal actors with a strong affinity for scientific inquiry. This coalition should span the disciplines of complex systems science, sustainable finance and economics, and sustainability transitions. It should be global in nature and connect some of the leading minds doing research at the nexus of finance, innovation, and systems change.

Our first-generation research agenda—available for download here—lays out the guiding principles that will underpin our conceptual development work as well as the priority research questions for the initial phase of inquiry. It will continuously be updated in response to our findings from academic and practical work.

If you are interested in getting involved in our research agenda, please get in touch.

Do you want to collaborate with us?

There is an urgent need to rethink the way we deploy financial capital for transformative impact in human and natural systems. The field of systemic investing has garnered significant momentum, and now is the time to scale deep and scale out. So we invite challenge owners, systems thinkers, innovation practitioners, investment professionals, ecosystem shapers, and creative voices to join us in figuring out how to redeploy financial capital in service of a prosperous and sustainable future for all.

How is systemic investing relevant to

Foundations

...because the pots of capital operating under a philanthropic logic are orders of magnitude smaller than those operating under an investment logic, so systemic investing is a way for foundations to leverage their capital in the systems they care about.

Corporations

...because their supply chains are becoming increasingly fragile and societal expectations of business are growing. This requires companies to deploy all the tools in their finance toolbox (incl. direct investments, advanced purchase agreements, and supply-chain financing) and partner more strategically with governments, foundations, and NGOs.

Impact Investors

...because single technologies, start-ups, or social enterprises—no matter how ingenious their solutions and how brilliant their teams—are unlikely to change systems by themselves. So what matters is that these single-point solutions are synergistically nested within a broader systems change effort.

Institutional Investors

...because mainstream ESG investing doesn’t benefit places and communities at the pace, scale, and quality required, so institutional investors must channel more capital into real-economy assets in a strategic and collaborative manner.

MDBs and DFIs

...because sustainable development in a VUCA world requires portfolio approaches to systems innovation, and those need to be funded with a different investment paradigm than those dominant in development finance institutions today. And because the public sector cannot finance sustainability transitions alone, so systemic investing is a way to crowd-in private-sector capital in a smart way.

Engage with us

Which option best describes your interest in systemic investing?

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About

Who We Are

The TransCap Initiative is a think-and-do-tank operating at the nexus of real-economy systems change, sustainability, and finance. We operate as a multi-stakeholder alliance coordinated by a backbone team and comprised of wealth owners, innovation leaders, system thinkers, research institutes, and financial intermediaries. Our community is open to anyone committed to our cause and values.

Why We Exist

We exist to improve the way sustainable finance is purposed, designed, and managed so that money can become a transformative force in building a low-carbon, climate-resilient, just, and inclusive society. We believe that the key to accomplishing this vision is to inspire and enable investors to leverage the insights and tools of systems thinking and complex systems science for addressing the most pressing societal challenges of the 21st century.

What We Do

Our mission is to build the field of systemic investing. This means developing, testing, and scaling an investment logic at the intersection of systems thinking and finance. We do that by convening a multi-stakeholder alliance to develop a knowledge and innovation base, test novel concepts and approaches, and build a community of practice.

Our core ideas borrow from the disciplines of systems thinking and complex systems science, challenge-led innovation, human-centred design, new economic frameworks, and financial innovation. Our experiments are contextualised in those place-based systems that matter most for human prosperity—such as cities, landscapes, and coastal zones—as well as in value chains and other real-economy systems. We hope that our work produces knowledge and insights, methods and tools, and a self-organising community of inspired and enabled change makers.

The places and value chains we intend to transform act as centres of gravity for our work. In each of these systems, we will work with challenge owners, communities, innovators, investors, and other stakeholders to design, structure, and finance strategic investment portfolios nested within a broader systems intervention approach.

Learn More

Contact Us

TransCap Core Team
community@transformation.capital