State of the Field: Financing Systemic Transformation
Financing Systemic Transformation: Insights from Transformations 2023 Conference
By: Bruce Evan Goldstein, Kim Sensener, Steve Waddell, Magdalena J. Schneider
Abstract
At the Transformations 2023 Conference, a panel of finance experts discussed the urgent need to transform the current financial system to support systemic transformation. This blog post delves into their insights on the limitations of traditional finance models and the emergence of transformative finance strategies.
Introduction
The session highlighted the critical role of finance in driving systemic change, emphasizing the need for a paradigm shift in financial practices to address multifaceted global crises effectively.
Panel Discussion Highlights
Steve Waddell introduced the concept of "Financing Ecosystems for Systemic Transformation" (FEST), advocating for a shift from traditional finance to models that prioritize multi-stakeholder decision-making and systemic impact.
Magdalena J. Schneider emphasized the need for different capital exploration methods focusing on real economies and multi-stakeholder alliances for systemic change.
Johan Schot discussed transformative investment, which targets systemic change beyond traditional ESG investments.
Challenges in Traditional Finance
The panelists critiqued the limitations of conventional financial models, including their misalignment with transformative goals and the focus on incremental changes. They highlighted the necessity for finance systems that support broad, systemic changes.
A New Approach to Finance
The discussion underscored the importance of radical collaboration and an experimental mindset in developing transformative finance ecosystems. These approaches involve diverse stakeholders and prioritize systemic impact over traditional financial returns.
Towards Transformative Finance
Radical Collaboration: Emphasizing holistic partnerships that integrate diverse stakeholders to solve complex problems.
Experimental Mindset: Encouraging learning from multiple experiments and diverse perspectives to enhance impact.
Stakeholder Inclusivity: Ensuring that all relevant parties are involved in decision-making processes.
Shaping a Just Transition
The panelists stressed the importance of addressing unintended consequences in transformative investments and balancing returns with transformative goals. They advocated for close interaction with investors to align objectives with transformative outcomes.
Conclusion
The Transformations 2023 Conference panel concluded that a shift towards transformative finance is essential for funding initiatives aligned with the SDGs. This requires a transformation in the goals, values, and structures of the finance system, moving beyond traditional ESG investments to embrace systemic change.
Next Steps and Ways to Connect:
FEST (Financial Ecosystems for Systemic Transformation): Accelerating transformative finance. Learn more.
TransCap Initiative (TCI): Building the field of systemic investing. Explore TCI.
Utrecht University's Centre for Global Challenges: Research and education on complex global issues. Visit Utrecht University.
Join the Transformations Community: Be part of a global network of action-oriented researchers and practitioners. Sign up.
This blog post offers a comprehensive overview of the panel's discussions, aiming to inspire current and aspiring finance professionals in the field of systemic transformation.
