6 of 7: The TransCap Initiative: A Do-Tank for the Sustainable Finance Movement

The TransCap Initiative is an open innovation programme. Its mission is to develop, demonstrate, and scale the systemic investment logic at the heart of the transformation capital approach and to generate a pipeline of investable opportunities.

The TransCap Initiative has an open-ended, multi-stakeholder, and action-oriented structure and leverages methods from human-centred design and systems thinking to build a space for collaborative research, prototyping, field building, and investing.

As such, the TransCap Initiative is fundamentally about real-world action and practice-relevant research. As a do-tank for the sustainable finance movement, it recognises that practical experience is a potent source of knowledge, legitimacy, and differentiation.

Impact Pathway

There are three elements to the means by which the TransCap Initiative seeks to bring change into the world:

Stage 1 – Manage Millions

Finance is a profoundly practical industry, and when it comes to financial innovation, seeing is believing. So to demonstrate the possibilities of systemic investing, enable learning, and build credibility, the TransCap Initiative will raise and deploy substantial investment capital in real-world settings.

Stage 2 – Connect Billions

Systems transformation is a herculean task beyond the power of a single organisation. To achieve meaningful scale, the TransCap Initiative must “build the field” of systemic investing by activating and enabling a community of actors from across the entire investment value chain, and by matching real-world investment opportunities with pioneering investment consortia.

Stage 3 – Inspire Trillions

The scale of the sustainability investment challenge reaches into the trillions of euros per year. Generating outcomes at this level is only possible by harnessing the self-organising properties of complex systems through changing their rules, structures, goals, and paradigms. The TransCap Initiative will produce and disseminate the proof points and stories that enable the mainstreaming of its core ideas, leveraging best practices from storytelling, brand marketing, and narrative economics.

Work Programme

To progress along its impact pathway, the TransCap Initiative must develop the intellectual underpinnings of a systemic investment logic, develop the capabilities and operational models required to put its theories into practice, and demonstrate its possibilities and limitations in real-world settings.

We will produce these outputs through four streams of work:

  • Work Stream 1 – Research: developing the theoretical and intellectual underpinnings of transformation capital as laid out in the design space, as well as the capabilities required to put its theories into practice
  • Work Stream 2 – Prototyping: applying the intellectual foundations of transformation capital in real-world settings to test their core hypotheses and to generate insights and intelligence for their advancement, and to facilitate investment transactions
  • Work Stream 3 – Field Building: mainstreaming systems thinking throughout the financial sector by activating and enabling a community of practice and building a platform for investing in strategic portfolios
  • Work Stream 4 – Enabling: building a backbone structure to allow the TransCap Initiative to achieve its strategic intent and impact promise

These workstreams do not stand as separate pillars. They are designed as an interconnected web of innovation activities that inform and learn from each other. This ensures that the TransCap Initiative can evolve based on both theoretical development and practical experience.

Community & Engagement

The TransCap Initiative is a space that comes to life only through the people who are present in it. The way these people think and act, both at the individual and collective level, are critical determinants of the initiative’s success. Our ambition is to forge an active and inclusive community whose members are glued together by a common intent and excel at leveraging each other’s expertise, experience, and diversity.

What Does Success Look Like?

The ultimate objective of the TransCap Initiative is to induce a shift of paradigms, structures, and practices within the world of finance. We will accomplish this goal by gradually progressing along the initiative’s impact pathway.

For each stage of the impact pathway, we have defined a set of proof points that tell us whether we are on the right track. One set of proof points will help us answer questions related to the theory of change behind transformation capital. Another set of proof points will provide insights as to whether or not we are building the field of systemic investing.

Evolving Forward

At its core, transformation capital is a hypothesis. It exists because of a perceived problem—the inability of capital markets to fuel transformative change. The TransCap Initiative is thus designed as an inquiry, a deliberate and systematic investigation of whether a new investment logic can augment our capacity to cope with humanity’s gravest challenges.

The TransCap approach is developed specifically for issues that emerge within complex adaptive systems. A defining feature of such systems is that they constantly evolve. Likewise, transformation capital is also designed to evolve—through variation, adaptation, selection, and amplification.

In practice, this means that we seek to enable challenge owners and investment professionals around the world to use and adapt the knowledge and capabilities at the core of transformation capital, so that this new investment logic can achieve change at a scale that would never be possible if it were rigidly designed and tightly controlled.

Keep on Reading

  • Call to Action

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    The ideas set forth herein act as the starting point for what lies ahead—a journey of exploration and discovery, a systematic inquiry of what is possible, probable, and preferable. We invite challenge owners, systems thinkers, innovation practitioners, investment professionals, ecosystem shapers, and creative voices to join us in figuring out how to deploy financial capital to solve some of the most pressing and tangible problems of our time.
  • The Grand Challenge of Our Time: Transforming the Place-Based Systems Where We Live, Work, and Play

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    To safeguard human civilisation as we know it, we must fundamentally change the way our societies and economies operate. This means transforming the place-based, socio-technical systems that constitute the bedrock of our current way of life: cities, land use, transportation, energy, industry, infrastructure, and aquatic systems. Financial capital is one of the most powerful levers for driving this change. Yet what remains largely unclear is how, exactly, capital needs to be deployed to build a low-carbon, climate-resilient, just, and inclusive future.

Download the White Paper

The TransCap Initiative is a collective effort. Its contours have been drawn by a community of visionary innovators, finance professionals, scientists, entrepreneurs, systems thinkers, and creative minds who represent some of the most audacious and progressive organisations dedicated to tackling the climate crisis. By participating in co-design sessions and interviews, or by writing about their work and experience, they have contributed invaluable insights to the quest of a new investment logic fit for catalysing the transformation of those systems that matter most for human prosperity. The TransCap white paper synthesises their ideas into a starting point for the journey of exploration and discovery that lies ahead.

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.

Join the Network

Contact Us

Dominic Hofstetter, Space Building Lead
dh@transformation.capital

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About

What We Do

The TransCap Initiative is a collaborative space for developing, demonstrating, and scaling systemic investing in the places 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 apply systems thinking, human-centred design, and the principles of mission-driven innovation to explore how financial capital can catalyse the transformation of systems in service of a low-carbon, climate-resilient, just, and inclusive future.

Our mission involves developing a knowledge and innovation base, testing novel concepts and approaches, and building a community of practice. In doing so, we recognise the complex adaptive nature of human and natural systems and the fundamental uncertainty that governs their evolution, and we thus emphasise the need for collaboration, experimentation, and learning.

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.

Who We Are

The TransCap Initiative convenes a diverse community of partners from the private, public, civic, academic, and philanthropic spheres. Many of our community members are world-leading thinkers and doers in the fields of systems innovation, sustainable finance, public policy, social innovation, and sustainability research. It is a dynamic community, open to anyone committed to our cause and values.

The TransCap Initiative was initiated in 2019 by EIT Climate-KIC with support from the European Institute of Innovation and Technology (EIT).

Learn More

Contact Us

Dominic Hofstetter, Space Building Lead
dh@transformation.capital