Beyond Systemic Capital: When Finance Learns to Behave Like a Forest

A note written late at night in Bogotá, on the eve of teaching what I do not yet fully know.

It is late. I have just arrived in Bogotá, the altitude is doing what altitude does, and tomorrow morning I am supposed to stand in front of a room at the Latin American Regenerative Investment Summit and teach a class on advanced regenerative finance. My notes are open on the desk. I am improvising. And I have arrived at the slide where I am supposed to explain where this whole field is heading — and I have stopped, because the honest answer is that I am still working it out.

So I am writing this the way one writes when one is tired and the city outside is quieter than one’s own mind: as a way of thinking out loud, in the hope that the thinking might catch up with the question.

The question is this. We have, over the last few years, watched the emergence of something genuinely new in global finance: Bioregional Financing Facilities, or BFFs, The concept was primarily developed by Samantha Power and Leon Seefeld.

These are vehicles designed to channel long-term capital not into a single project or commodity, but into the health of an entire ecological territory — a watershed, a basin, a mountain range.

I want to be unambiguous about this: I think BFFs are one of the most important developments in institutional finance in a generation. They deserve our praise, our patience, and our investment. They represent the first serious attempt by large-scale capital to stop pricing fragments and start thinking in wholes.

But I am also going to argue, here on my hotel desk at midnight, that BFFs are a beginning, not an end. They belong to a category of finance we might call systemic capital — and systemic capital, important as it is, is not yet the destination.

The destination, if we are brave enough to walk toward it, is something else entirely. Call it living capital. The distinction sounds subtle. It is not.

Let me try to explain.

The bridge we are standing on

For most of the last forty years, the dominant story finance told itself about the world was a story of fragmentation. A forest was timber inventory. A river was water supply. A landscape was real estate. A community was labor. A territory was valuable only insofar as it could be cut up, priced, and converted into yield.

The financial system became extraordinarily sophisticated at pricing fragments. It became remarkably poor at understanding wholes.

You can see the consequences in any honest stock-take of the early twenty-first century. We optimized container shipping and broke the climate. We optimized agricultural yield and broke the soil. We optimized labor markets and broke a generation’s faith in the social contract. We were, in the language of complexity science, maximizing locally and degrading globally. The spreadsheet got smarter. The world got more fragile.

This is the context in which BFFs matter. They are the first piece of institutional architecture that says, explicitly, the boundary was drawn in the wrong place. You cannot finance a sustainable farm if the cloud forest above it is collapsing. You cannot finance the cloud forest if the indigenous communities stewarding it are being displaced. You cannot finance any of it if the regional water table is being drained two valleys over. Everything is connected, so the money must learn to be connected too.

That is the doorway BFFs open. And through that doorway lies the broader territory I want to spend most of this essay in: systemic capital.

What systemic capital sees

Systemic capital is finance that has finally learned to see ecosystems.

It understands that the value of an asset cannot be separated from the health of the larger systems that sustain it. Soil fertility, water cycles, biodiversity, governance stability, social cohesion — these are not externalities to be discounted in a footnote. They are economically material. They show up in the long-run cash flows. They show up in the catastrophe risk. They show up, eventually, in whether the asset exists at all.

Systemic capital understands the forest as ecosystem rather than inventory. And this single shift — from objects to systems — may turn out to be one of the defining economic transitions of the twenty-first century.

Once finance begins to see systems, a whole vocabulary becomes available to it that was previously foreign. It begins to understand feedback loops. Interdependence. Thresholds. Adaptive capacity. Resilience versus brittleness. It begins to grasp that the most expensive thing in the world is not a high-priced asset; it is a fragile one. It begins to price not just the strength of a system, but its capacity to absorb shock without collapsing.

This is genuinely new. The smartest BFF practitioners I have met now talk like ecologists. They speak of nested systems, of cascading risk, of the difference between a watershed that bends and one that breaks. They are, in the most literal sense, finance learning to read in paragraphs instead of letters.

So let me say it plainly, because I want this point to stand: the move from project finance to systemic capital is a real evolution. It is not a marketing veneer. It is not greenwashing. It is the beginning of capital learning to think in wholes. And BFFs are one of the most important expressions of this evolution that institutional finance has yet produced.

If we stopped here, this would already be progress worth defending.

But there is a quiet question that, once heard, refuses to leave: what if seeing the forest is not the same as belonging to it?

The limit of the bridge

Here is what I keep noticing. Systemic capital, for all its widened vision, still operates within the inherited grammar of finance itself.

It finances systems. It does not yet behave like one.

Its underlying verbs are still the old verbs. Capital is deployed. It seeks return. It exits on a defined horizon. Risk is priced. Ownership is structured. Value is captured. Ecosystem services are monetized. The boundary has been widened — from project to territory, from asset to ecology — but the metabolism underneath has not changed. The observer is still standing outside the forest, valuing it.

This is not a criticism so much as an honest reading of where the bridge ends. Systemic capital is a profound widening of the boundary condition. But the logic inside that boundary is still classical financial logic: ownership, capital stack, risk-return optimization, liquidity windows, monetizable services. The forest has become visible. Money has not yet become forest-like.

And so the question I want to put to my audience tomorrow — and to anyone working seriously in this field — is whether the next move is not simply a better version of systemic capital, but something categorically different.

Not finance that sees the system. Finance that participates in it.

Not capital that finances resilience. Capital that is part of the metabolism by which life continues to evolve.

What living capital is, and is not

Living capital is not merely capital invested into living systems. That is systemic capital, and we have already named it.

Living capital is capital designed according to the patterns and principles by which living systems organize themselves.

The difference is everything.

Because life does not organize primarily through extraction. Life organizes through circulation. Through reciprocity. Through relationship. Through adaptive feedback. Through nested intelligence. Through co-evolution.

A forest does not maximize the extraction capacity of its strongest tree. The healthiest forests do something almost opposite to modern financial logic: they circulate. Sugars move underground through fungal networks from trees with surplus to trees in shadow. Older trees — the ones some traditions call grandmothers — feed seedlings that will outlive them by centuries. Weak nodes are nourished rather than culled. Diversity is not a hedge against risk; it is the source of the system’s intelligence. Nothing exists independently. Value, if we must use that word, emerges relationally — in the spaces between, not the substances within.

Here is where I think the deepest distinction lives, the one I will draw on the whiteboard tomorrow morning.

Systemic capital understands that the forest is an ecosystem and not a collection of trees. This is a beautiful and necessary insight. We should not rush past it.

But living capital asks the next question. How does that ecosystem actually metabolize? What are its nutrients? How do they flow? How do older parts feed younger parts? How does the system regulate itself without a central planner? How does it absorb disturbance and emerge more, not less, alive?

Systemic capital sees the forest.

Living capital designs the nutrients of the forest.

One is ecology as observation. The other is ecology as architecture.

Living capital goes beyond systemic capital because it does not stop at financing the system — it works on the emergence of the system’s life. Systemic capital protects the forest. Living capital tends to the conditions from which the forest keeps becoming a forest: the soil chemistry, the fungal handshake, the seasonal pulse, the slow conversation between species that no spreadsheet will ever fully capture. It is the difference between safeguarding an ecosystem and participating in the ongoing event of its aliveness. One asks how to keep the system standing. The other asks how to keep the system generating itself. And once you take that second question seriously, finance stops being a discipline of allocation and becomes a discipline of midwifery — the careful, humble work of helping life bring more life into being.

And once you cross that threshold, the questions change. We stop asking how do we finance a bioregion? and start asking how does a bioregion metabolize value? That is not a finance question anymore. It is a civilization design question. It is the question of whether money itself can evolve from instrument to nutrient — from a thing we hoard to a thing that flows, the way sugars flow through a mycelial network, the way gifts flow through a healthy community, the way water flows through a watershed that has not been straightened and dammed into uselessness.

Under systemic capital, value still tends to emerge through ownership, production, financial return, and the optimization of resilient assets. Under living capital, value emerges through thriving relationships, regenerative capacity, biodiversity, circulation, adaptive intelligence, stewardship, and the increasing aliveness of the whole system.

In one model, capital finances resilience.

In the other, capital becomes part of the metabolism through which life continues evolving.

The grammar of who, and the grammar of it

There is a teaching I keep returning to, from the writings of indigenous scholars in North America and the long lineages they speak from. In many of those languages, everything that participates in the work of being alive is addressed not as it but as a kind of who. The river is a who. The maple is a who. The wind is a who. To call the river it is to make a category error so basic that it would be embarrassing if it were not also, in its consequences, catastrophic.

When I read BFF prospectuses — and I read a lot of them — the river in them is still, grammatically, an it. The forest is an it. The watershed is an it. As long as it remains an it, the relationship stays transactional, even when the transaction is wrapped in the language of regeneration.

Living capital, if it means anything, means a financial architecture in which the river is addressed as a who. In which the relationship is no longer between an investor and an asset, but between participants in a shared metabolism. In which wealth itself is redefined — not as a stock of accumulated claims, but as the capacity of a place to regenerate, adapt, and flourish through time.

A fertile soil is wealth. A resilient watershed is wealth. Social trust is wealth. Pollinator networks are wealth. Cultural continuity is wealth. A community capable of learning together through disturbance is wealth. By that measure, much of what currently counts as wealth in our spreadsheets is something closer to its opposite: the liquidated remains of wealth that used to be there.

What I will present in the morning

It is past midnight now and I should sleep, but I want to write down the line I think I will end the class with, because I am afraid I will lose it by morning.

Resilience is not enough.

Resilience is what a system does to survive disturbance and return to a prior state. It is a defensive virtue, and a necessary one. But life is not finally about resilience. Life is about evolution. Life is about a system’s capacity to keep generating novelty, beauty, complexity, and reciprocity, long after the original conditions have passed. The grandmother forest is not resilient. She is alive. There is a difference, and the difference matters.

The task ahead, then, is not simply to make capital more resilient, or more systemic, or more aware of its ecological context. Those are necessary steps. BFFs are taking them, and they deserve our applause for it.

But the deeper task is to design capital as an emergent property of living systems — to ask, with genuine humility, how would nature design finance? Not how would we apply nature as a metaphor to finance, but how would the patterns of living systems themselves give rise to a financial architecture? What would circulation look like? What would reciprocity look like? What would governance look like, if it were modeled on the way a forest governs itself — without a central planner, without an extraction logic, with everyone fed?

This is no longer a question for the finance department. It is a question for civilization design.

And so, to the Latin American Regenerative Investment Summit participants tomorrow morning, and to anyone reading this who has worked seriously on BFFs or anything adjacent to them: thank you for building the bridge. The bridge matters. We needed it. Without systemic capital, there is no path forward.

But the bridge is not the country.

The country, if we are willing to walk toward it, is a place where money has finally learned to behave less like a weapon and more like a nutrient. Where capital has stopped trying to own life and started trying to participate in it. Where the forest is no longer a portfolio, and the river is no longer an it, and wealth is measured not by what can be extracted from a place but by how much life that place is still capable of giving.

The first finance system to cross that threshold honestly will not just transform its returns.

It will help transform the world.

And on that thought, I think I can finally turn out the light.

Thank you for accompanying this reflection all the way to the end.

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