September 8, 2020

What we´re reading: Transformation Capital: Systemic Investing for Sustainability

Sara ScherrEcoAgriculture Partners Manon KoningsteinEcoAgriculture Partners

Hofstetter, D (2020) ´Transformation Capital: Systemic Investing for Sustainability´, Climate-KIC, Brussels

´The science is clear, and the world’s top economic authorities agree: To safeguard human civilization as we know it, we must fundamentally change the way our societies and economies operate´.  A freshly published report on systemic investing for sustainability–´Transformation Capital´–directly addresses that challenge. This ground-breaking report by Dominic Hofstetter, Director of Capital & Investments at Climate-KIC, provides a rationale and framework for connecting place-based “strategic investment portfolios’ with finance and the innovations that will be needed in the financial sector to respond to climate change in a more comprehensive and transformative way.

There is no doubt that we need to move towards a regenerative, and resilient model that respects the natural boundaries of our planet and honors the social needs of our communities. Financial capital must play a powerful role in building this low-carbon, climate-resilient, just, and inclusive future, such as envisioned by the UN Sustainable Development Goals (SDGs). However, how can this capital be situated to catalyze the transformation of place-based systems? The report explores this question through the presentation and analysis of cases of innovative region-wide financing strategies such as for port-regions such as in the Spanish Bask Country region; in city-regions, such as the development of clean and healthy cities; and in nation-wide regions, such as the Circular Economy Transition in Slovenia.

Transforming landscapes

While the report presents no examples of agricultural landscapes, its analysis is directly relevant to the challenge of transforming landscapes to link and achieve food and agriculture systems, biodiversity conservation, ecological regeneration, watershed health, and healthy human environments. The current and post-pandemic challenges make this financing strategy even more salient (for more info, read our blog: How to reimagine our food systems for a post-COVID world – taking a landscape perspective)

What we need now is a radically new approach to investing with the explicit aim of systems transformation—one that deploys capital with a broader intent and mindset; that is anchored in different methodologies, structures, capabilities, and decision-making frameworks; and that moves away from a project-by-project mentality to a strategic blending paradigm.

The analysis and recommendations in the report are remarkably aligned with EcoAgriculture’s recent report with CPIC, Landscape Finance Lab and the 1000 Landscapes Initiative on emerging integrated landscape finance models [Shames & Scherr, 2020]. We can draw on this report to enrich dialogue in our own community of practice around landscape finance.

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