New research offers a guide to investors on how to move away from traditional impact investing towards a more holistic approach.
The next generation of wealth inheritors are increasingly “impact curious” and open to leveraging their capital for meaningful change, according to research on systemic investing by the Center for Sustainable Finance & Private Wealth (CSP).
Private wealth holders are in a prime position to adopt new emerging approaches to invest in addressing complex global issues through a more systems thinking approach, according to research carried out by the CSP and presented in their just published ‘Investor’s Guide to Systemic Investing’.
The guide, which urges investors to move beyond traditional impact investment approaches, was drawn together by CSP alongside several networks involved in systemic investing in private wealth, including the Sustainability Initiative at MIT Sloan, the TransCap Initiative, The ImPact, and TWIST.
Speaking to Impact Investor, Seth Fleisher, managing director of CSP North America, said that the next generation of wealth holders seem increasingly open to shifting from traditional single-point investments to more holistic, systems-level approaches.
“There’s a significant intergenerational transfer of wealth approaching, creating a prime moment for systemic investing education,” said Fleisher.
Paradigm shift
At its core, systemic investing focuses on the interconnectedness of social and ecological issues. Instead of addressing isolated problems, systemic investing encourages a holistic view that focuses on transforming the underlying systems that create these challenges.
For Fleisher, this shift in perspective is crucial for investors to comprehend the full scope of the systems they are engaging with to make meaningful changes.
A key practical aspect of the guide is helping investors to visualise connections through tools like system maps, allowing them to uncover opportunities which lead to greater impact.
Speaking on the core principles of systemic investing, Kirsten Andersen, CSP’s director of research, said: “It’s shifting the mindset of the individual towards asking what’s the change we want to see in the world? How do we apply these tools to help us intervene in the current system to achieve the desired future state?.”
Moreover, the guide stresses the value of blending different forms of capital, such as commercial investments, philanthropy, and social capital.
It is increasingly clear that conventional approaches to investing cannot fully address today’s most pressing ecological and social issues,” said Dr. Falko Paetzold, CSP’s managing director. “If we are serious about change, we need to listen, rethink, and embrace bold, systemic solutions together. This guide invites wealth holders to be open and brave by stepping back to move forward.”
The guide also profiles a number of impact investing organisations “reshaping global systems”, including The Good Investors, The Tara Health Foundation, and CO_.
