Our Systems Finance approach
Gen, our Systemic Capital Lead, explores a future paradigm for investing in the Birrarung / Yarra River.
“The most dangerous thing we do is treat human and natural systems like machines.”
My environmental engineering professor’s maxim has been ringing loudly in my ears as I navigate the possibilities for a systems finance approach in service of the Swimmable Birrarung Project. Even the title of the work puts me in the danger zone of falling into this trap:
Swimmable – an experience of joy and immersion in a natural environment at an elemental level.
Birrarung – a ‘river of mists and shadows’, a place of ancient significance that forms a sustaining, complex system of cultural, environmental, educational and recreational resources.
Project – a bounded set of actions through which scientifically-robust processes efficiently and effectively convert inputs into outputs to achieve predefined outcomes.
The challenge: how could a systems finance approach at Regen Melbourne respond to the scale and complexity of making the Birrarung swimmable? In other words, how do I avoid the trap and not treat the restoration of a river to a swimmable level of health like an engineered system?
A moment of clarity about this dilemma occurred when our Lead Convenor, Charity Mosienyane, shared an article with me about ‘Rewiggling’ rivers. This article described how biodiversity has sprung back to life in rivers that have been reverted to their more natural shape. These remeandering projects are designed to reverse the detrimental effects that have resulted when rivers have been artificially straightened and ‘optimised’ to remove stormwater from streets and simplify urban design to more efficiently transport waste downstream. The way to create a healthier, more productive river is to slow it down. One of the most well-known examples is the rewilding of Yellowstone National Park - when wolves were reintroduced after an absence of 70 years, it led to a trophic cascade which created ‘niches’ for other species and habitats, allowing the river to regenerate. After reading the article I was left to ponder how many other parts of our lives have we devalued by speeding them up. Just as river systems need to slow down to allow richness to emerge, making the river swimmable means creating the space for ideas to percolate and meander.
When a complex system like a river thrives, unexpected things happen. It exhibits self-organising properties. Elements of the system interact in a way that means the whole is far greater than the sum of parts. It opens up the ability to tap into emergent values and ask what-if questions. What if the river running through Melbourne was healthy enough to swim in? Who might be inspired? How might this ignite creativity and build the character of the city? How would this engagement enhance the adaptive capacity and disaster resilience in the city? What new businesses or markets could be established if a city like Melbourne were able to achieve this goal?
There is a global movement to make rivers the centre of flourishing life they once were. Many cities around the world have already transformed their rivers into public swimming places and recreational sites - proof that our vision for a swimmable Birrarung can be achieved. People living in cities with rivers they can swim in relate to them and as a result, care for them, and protect them. For example, urban swimming in Swiss cities like Zurich, Bern and Geneva is considered one of the greatest cultural experiences, especially during the long days of summer. If something were to happen that endangered that experience, people would likely rise up.
Driving investment into the Swimmable Birrarung Project requires us to embrace complexity. This is simultaneously the most intuitive part of Regen Melbourne’s work, as well as the most formidable challenge. It’s a tenet that creates unexpected alliances and tensions. On the one hand, simple interventions such as focused conversations and storytelling can unleash previously suppressed energy. The river has always been a place of cultural and ecological significance for the Wurundjeri Woi-wurrung people. By listening to Indigenous storytelling and language about the river, we can easily imagine the Birrarung as a lifeblood of a city - a fundamental shift from optimising the river as a resource to be extracted. Similarly, the Yarra Riverkeepers collect a suite of ‘love stories’ which illuminate how we connect with the river.
Part of this storytelling is reflected in the pursuit of self-sovereignty for natural entities, which has gained traction in recent years. Fundamentally, we can draw on the knowledge and practices of First Nations communities in protecting and respecting the natural world we inhabit. Giving rivers a voice or legal standing can take different forms in different regions. In 2017, the Birrarung was recognised under law as a living entity through the Yarra River Protection (Wilip-gin Birrarung murron) Act 2017, meaning “keep the Yarra alive”. This is a positive step toward ensuring that ecosystems and natural entities have a right to exist and thrive, with its interests represented by the Birrarung Council, including Wurundjeri Woi-wurrung Elders. Another notable example is the Whanganui River in Aotearoa New Zealand, which has been granted legal personhood. This means that the river is recognised as a legal entity with its own rights, including the right to be protected and to have its interests represented. The decision was based on the cultural and spiritual significance of the river to the local Māori community, as well as the recognition of the river's intrinsic value.
On the other hand, the same simple conversations can stimulate the power dynamics vested in the status quo, which are currently motivated to suppress changes to how these complex resources are valued. These tensions reveal themselves in the need to compartmentalise. Silos in government and industry result in spending which optimises around water supply, rather than value the broader opportunities a thriving river could bring. There is no whole-of-government vision that integrates biodiversity gains and river health as embedded within development. Many organisational strategies struggle to account for the combinatorial value of aligned initiatives. While there is a lot of talk of the need for capacity building, enhancing community trust, participation and access to the river, initiatives which support this go unfunded. Dominant finance paradigms are steeped in valuing single assets and struggle to account for the profound value (and value flows) of complex integrated systems.
Piloting Systemic Investing at Regen Melbourne
Just like my professor stated, the crux of this challenge remains the same—treat natural systems as natural systems, hence recognise that the potential value of the Birrarung is tied up in how we enhance its complexity. This project is not a machine that can be optimised. The premise of establishing a systems finance approach at Regen Melbourne is to recognise that finance and investment practices must also work towards and serve this goal. We seek to match these properties of the river as a complex adaptive system nestled within (and independent with) other complex adaptive systems with the legitimate expectations and constraints of the current financial system. In practice, this means acknowledging and valuing what emerges from the interactions between people, projects, and systems within the logic we apply when thinking about finance and investment.
We are beginning to manage this challenge through a systems finance approach at Regen Melbourne. We are not vague about the issues we seek to address. We are part of a global coalition of leading systems thinkers, including partnering with the TransCap Initiative, a global network who are building the field of systemic investing, as well as the Griffith Centre for Systems Innovation. You can read The Griffith Centre’s article about developing a systems financing approach for a Swimmable Birrarung with Regen Melbourne here. We know that to make the river swimmable will require multiple interventions that enhance the value of each other. Activities will happen at every scale and range from multi-sized engineering programs, investment in arts and culture along the river, as well as modes of storytelling and environmental governance that help us connect into different worldviews. We will continue to map these activities and, most importantly, how they interact with each other and how they might combine to spawn positive emergent outcomes.
In practice, what this means is that systems finance approach at Regen Melbourne will be piloted through three interconnected workstreams:
Interpreting demand
Understanding and enrolling supply
Facilitating investment
These three workstreams are expanded below.
Interpreting demand
This work is in service of and embedded within the pioneering work that has been driving improvement in river health for decades. I will participate in the Swimmable Birrarung workstream activations and map the investible and non-investible activities coordinated by our Lead Conveyor. Together we will build a map which provides insight into how resources and money flow in service of both current and future vision for the river. We will seek out the ideas, frameworks, artefacts that allow this diverse community of actors to make sense of the project together - these are called boundary objects.
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Participating in ‘swimmable river’ convening sessions.
Identify and test how diverse actors engage with ‘boundary objects’ - initially this will be a Miro board we can use to test and share ideas.
Individual follow-ups with challenge actors explicitly seeking investment/new resources.
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Observe dynamics between challenge actors.
Surface and interpret resourcing needs/opportunities and map the available funding landscape (inclusive of and beyond the actors directly involved in the swimmable river initiative).
Infer and codify practices that support the intermediation and implementation of systems financing approaches.
Infer the potential for more structural (systems financing) supports and mechanisms.
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Annotated map of the evolving investment landscape (i.e., the set of interrelated actions / activities requiring capital to be fully realised).
Reflection blog(s).
Investment opportunity snapshots to engage capital-holders with.
Understand and enrolling supply
The purpose of this workstream is to engage with capital holders to better understand their perspectives on the potential of systems financing and adopting new practices. It will provide information on how investors are currently spending capital and if this is or could be working in service of a Swimmable Birrarung.
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Semi-structured interviews with a selected range of capital-holders of diverse types and scales.
Opportunistic engagements with capital-holders.
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Exploration of understanding of and perspectives on systems financing and the conditions which would enable changes in investment policies and practices.
Also consider internal investment policies and practices where capital-holders are also challenge actors, particularly where these are likely to enable or hinder systems investment in practice.
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Reflection blog(s).
More capital holders engaged with Regen Melbourne and open to experimenting with new investment approaches.
Facilitating investment
The ultimate success is being a trusted connector between these people, providing a service to enable people and organisations to achieve more. This takes an active-learning approach, brokering connections to improve flow of resources into Swimmable Birrarung aligned activities. Initially this workstream is an opportunistic matchmaking between supply (capital holders) and demand (activities identified in workstream activations). This role includes making the tensions and resistances we see visible and working directly with partners to resolve these. The second, longer term opportunity is to design a funding program that could work in service of a Swimmable Birrarung.
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Opportunistic match-making between supply (capital-holders) and demand (challenge actors).
Where applicable, influence funding logic of supply side actors to recognise the value of the activities being nested within a broader suite of activities working towards Swimmable Birrarung.
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Observations of how a ‘systems framing’ influences the prospects of and dynamics around investments, including the role of ‘snapshots’ of possible investments within the broader Swimmable Birrarung challenge.
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Reflection blog(s).
Investments into challenge aligned activities.
Case studies.
An important part of this work is the publishing insight we are learning from undertaking the process itself. We will keep you informed via regular blogs as we build out the systemic investing approach. In my next blog I will share insight on how we are mapping the investable universe through a systemic investment lens.
