Systemic investing is the application of systems thinking to addressing societal problems through the strategic deployment of diverse forms of capital, nested within a broader systems change program and intended to transform human and natural systems. It can be a key lever to emerge from an economy reliant on scarcity, argue Johannes Tschiderer and Tom Zamzow of the TransCap Initiative.

Commitments to combat scarcity are emanating from all centres of global power: governments, intergovernmental organisations, NGOs, start-ups, philanthropists, institutional investors, just to name a few. To this day however, scarcity remains a key organising principle of a mainly growth-oriented capitalism as our global economic model. Scarcity of a resource is rewarded with a positive market-based signal (i.e. a higher price) and promotes (mostly technological) innovation to overcome it, so as to continue the exploitation.

Yet, a dead-end approaches, as this model has severely destabilised Earth’s major biophysical systems, with tipping points approaching at great speed. Relying solely on technology and ignoring necessary changes in mental models and behaviour patterns in our societies now bears the risk of replacing one scarcity with another. The question must no longer be “How can we more efficiently use the scarce resources we have left?”, but rather “How can we transition towards thriving natural and human systems that are in line with planetary boundaries, and what is technology’s role in this?”.

Systemic investing is a new investment logic that explores ways to answer this question in order to transform systems from perpetuating scarcity to enabling a low-carbon, climate-resilient, just, and inclusive global society. It is an approach that allows us to understand a system as a network of interconnected leverage points. These leverage points, if jointly activated by capitals and other interventions, can unlock combinatorial effects and catalyse transformation towards a desired future.

This transformation represents a pathway, along which “climate technology” has a role to play. Yet if we aspire to deep and irreversible system transformation, we must look beyond innovation in technology and address the underlying paradigms that anchor a system in the status quo. Let’s illustrate these points based on a systemic investing prototype currently underway in the net-zero mobility space in Switzerland.

Light-road traffic in Switzerland is the strongest contributor to greenhouse gas (GHG) emissions in the overall transportation mix (which accounts for 41% of all GHG emissions in the country), as well as the sector with the greatest need for net-zero investment. If looked at without a systemic lens, a push towards the large-scale adoption of electric vehicles (EVs) for private car ownership (technology innovation and adoption) appears to be an obvious and viable solution to decarbonise the system. Yet, if all privately owned Internal Combustion Engines (ICE) were replaced with EVs, the end goal would inherently summon different forms of scarcity (e.g. raw materials for batteries or urban living and green spaces used for vehicles).

While it certainly forms a crucial pillar in the overall mix, a systemic mindset understands EVs for private mobility as a bridge solution in a wider System Transformation Strategy for the Swiss mobility sector.

Developing such a strategy has been the goal of months of stakeholder interviews and meticulous system analysis conducted by the TransCap Initiative (based in Zurich, Switzerland). The findings reveal that decarbonisation leveraging the private mobility system requires investment along two connected objectives:

1. Accelerate the shift from ICEs to EVs for current car owners in an inclusive and just manner
2. Reduce the importance of car ownership (and number of private held cars in general) through electrified shared solutions that eliminate their relative convenience advantage

To understand the role of privately owned EVs, we must look at an important factor. That factor is time.

The TransCap Initiative developed its System Transformation Strategy using a model from the world of Futuring, called the “3 Horizons Model”.

The 1st Horizon represents a system without change, reliant on ICEs that will inevitably perpetuate a future that is inefficient and polluting. A system from which we must depart as soon as possible, aided by investment capital that is systemically deployed at various leverage points. The 3rd Horizon is our desired, yet not immediately actionable, future. One of reduced car ownership, alternative electrified transportation solutions, and a low-carbon, climate-resilient, just, and inclusive Swiss mobility system.

The 2nd Horizon is where we see the critical role of increased adoption of EVs for private use come into play. We must account for a transition period, a period that is required to shift the societal mindset, as well as ready infrastructure, regulatory frameworks and economic conditions that allow for our 3rd Horizon to unfold. E-mobility is the bridge that allows us to counteract the negative consequences of a 1st Horizon system while the 3rd emerges.

The TransCap Initiative is now in the process of shaping a systemic investing strategy which aims for the transition from the 1st to the 2nd Horizon, while supporting the establishment of conditions that allow the 3rd Horizon and a future not reliant on scarcity to emerge.

Johannes Tschiderer is a Research & Investment Associate, focusing on the coordination and delivery of the TransCap Initiative’s prototyping activities around individual mobility in Switzerland. In addition to his role at the TransCap Initiative, he is engaged in the design and facilitation of novel course formats at the nexus of business and sustainability at the University of St. Gallen, Switzerland.

Tom Zamzow leads the communications and public relations at the TransCap Initiative. In addition to his work at the TCI, he also manages his own consulting firm, specialising in strategic communications and cross-sector partnerships to unlock new business opportunities for clients. Tom honed his communications and stakeholder engagement skills with a Fortune 100 multinational, where he worked in multiple roles related to marketing, commercial strategy, digital innovation, and corporate communications.