Apr 15 2019

Developing the Transforming Finance System

By Steve Wadell

The Transformations Series (not to be confused the TRANSFORM series) is an important step forward in developing a badly needed system for transforming finance.  Such a system will both massively upscale the resources that transformation requires, and also transform finance in line with regenerative futures.  

There are a lot of organizations and networks already explicitly or implicitly involved in the system for transforming finance, such as those who will be coming to our event. By and large these are focused at the more modest and early stage end of the finance system, where billions of dollars of investment are needed globally to support emergence of system entrepreneurs, regenerative economy examples and transformation systems infrastructure. At the mega-end of the spectrum focusing on trillions of dollars of global finance, the most remarkable work has grown out of the Inquiry Into the Design of a Sustainable Financial System. The most impressive effort at such a scale of change, with the leadership of the indominatable Simon Zadek and Nick Robins, it consisted of a couple of years of important organizing and direction-setting that continues to be pursued.  

At TRANSFORM Series, we’ll have a workshop to focus on the more modest, early stage end of the scale, to advance steps to address a key blockage.  Currently there is a range of financing modalities that are relatively well-organized. There are lots of networks of high networth folks, science funders, crowd sourcing platforms, foundations, impact investors and government development agencies.  However, only a small fraction of money in these networks is transformations-oriented – aimed to make profound shifts from a mining and extractive relationship with nature and people, to a regenerative one.  The vast majority of “change investors” are tinkering around the edges with something the SDG Transformations Forumrefers to as incremental change (doing more of the same) or reform (making changes to rules and structures, within the same mindset and value-system).  

We need a network for those from all of the financing modalities who are categorically supportive of transformational change.  Such a system of relationships will bring out the complementarity of the modalities to create the early- to mid-stage of investment in transformative activities. Belmont Forum members who form the world’s largest network of science investors, are putting money into some very early stage developments with transformative potential, but they are not connected to other parts of the financing transformation field.  When funding ends, the project ends.  Project leads are rarely connected to financiers, although they may be good system entrepreneurs in other ways.  Meanwhile, impact investors complain that there’s “not enough product”.  Well, they have to get involved in creating the financing transformations system.  

Such a Transformations Financiers Network could play a variety of other roles, such as:

  • Risk-sharing amongst transformation financiers; 
  • Pooling for scale;
  • Addressing specific issues/locations:; 
  • Transformations investing learning and expertise-sharing; 
  • Connecting financiers and those with expertise in transformations processes; 
  • Promotion of transformations investing;
  • Changing regulatory environment; 
  • Experimentation with new finance models and principles; and
  • Creating transformations-appropriate impact measures.  

Come to Transformations Series, and join with it and the SDG Transformations Forum in making this Transformations Financiers Network a reality!

  • Steve Waddell, Lead Staff – SDG Transformations Forum