Bringing Systemic Investing to Cities

Building a centre of competence to catalyse the net-zero transition of city-regions, in partnership with the Centre for Public Impact and Climate-KIC

Cities play a critical role in driving society’s transition toward a low-carbon, climate-resilient, just, and inclusive future. More than half of the world’s population lives in urban areas. Cities consume 78% of the world’s energy and produce more than 60% of its greenhouse gas emissions.

The Role of Finance for Net-Zero Cities

Finance is a key enabler of net-zero transitions of cities, and the challenge to be met is colossal: The C40 cities alone will require annual investments of about USD 50 billion up to 2030 and beyond. If these massive investment flows are to drive structural change in urban areas (and their surrounding regions), their stewards must be enabled to design and deploy financial capital in a way that generates systemic effects.

This is particularly true of municipal governments (particularly the legislative and executive branches) because the financial mechanisms they control have the power to exert great leverage over the stocks and flows of money in cities. But it is also true of a rising number of non-governmental actors dedicated to urban climate finance, such as multi-stakeholder alliances, impact-driven private sector investors, innovation partnerships, and multilateral financial institutions.

Existing Support Offerings Are Stuck in Ineffective Finance Practices

A great many support offerings exist to help these actors get savvier on climate finance, including peer-to-peer learning platforms, technical assistance facilities, training courses, policy support offerings, and concessional finance. Yet, as our research shows, most of these offerings focus on a narrow set of issues and are steeped in traditional mindsets and practices.

For instance, many see the greatest challenges for cities in mobilizing capital, training civil servants, and strengthening project pipelines. While these are important issues to address, they are not, on their own, sufficient to lead to more systemic ways of capital allocation. That’s because they neglect the complexity of city systems and the myriad ways in which a slew of factors inhibits more systemic approaches to climate finance, including culture, decision-making frameworks, approaches to visioning and futuring, institutional structures and governance, ways of collaboration, and modes of citizen participation.

Systemic Investing in Cities

We believe that there is tremendous potential in a more systemic approach to investment programming, deployment, and management in cities. What, exactly, this could look like and how it could be delivered in ways that are both empowering for city stakeholders and complementary to existing offerings is the key question at the heart of our partnership with the Centre for Public Impact and Climate-KIC.

The long-term ambition of this partnership is to establish a centre of competence for systemic investing in cities. The purpose of such a centre would be to support municipal governments and other urban stakeholders in stewarding financial flows to catalyse the net-zero transitions of city-regions. We are currently in an exploratory process to deepen our knowledge of the specific challenges cities face, sharpen our value proposition, and design a first set of service offerings to be piloted by such a centre starting in early 2023.

To learn more about this work, reach out to Chandrima Padmanabhan at the Centre for Public Impact and Ivana Gazibara of the TCI Core Team.

Engage

Challenge Owners

Do you represent an ambitious city council, regional or national government, multilateral institution, foundation, or another organization with a mandate to transform a human or natural system?

Contact us to learn more about systemic investing and funding architecture in service of your climate action plan.

Investors

Are you an asset owner, an investment advisor, an asset manager, or a financial intermediary looking to explore the next frontier of sustainable finance?

Reach out to learn more about systemic investing and to discover investment opportunities.

Innovators

Are you working on a novel idea, concept, space, method, strategy, tool, structure, philosophy, or metric relevant for building the field of systemic investing?

Get in touch to find out how to engage in our prototyping work and how to contribute to our community of practice.

Funders

Are you interested in supporting the design and mainstreaming of a new investment logic that challenges existing financial paradigms, structures, and practices?

We’d love to hear from you.

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TransCap Core Team
community@transformation.capital

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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