Reflections From the Inaugural Systemic Investing Summit

Reflections From the Inaugural Systemic Investing Summit

When it comes to protecting the environment, fighting climate change, and preserving earth systems, it’s easy to be weighed down by the gravity and complexity of these challenges. It’s only made more daunting by the statistics and headlines we read everyday - everything from warming oceans and billion-dollar climate disasters to under-reported methane emissions.

There’s no doubt: the planetary issues we face are significant, the time to act is now, and whether well-intended or not, much of what we’ve been doing has been radically insufficient. But what keeps me grounded and hopeful is seeing and meeting with the talented, brilliant people and organizations that are in the fight, working to effect change. The people who don’t just see immense problems, but instead see a bold and better future state.

Convening Around Systemic Investing

I recently participated in the inaugural Systemic Investing Summit at the MIT Samberg Conference Center in Cambridge, Massachusetts. Systemic investing is a nascent methodology that looks at the relationships and interdependencies across various systems, seeking to deploy many forms of capital and resources in a strategic way that helps drive true transformation (instead of singular, impact metrics). Though similarly rooted in seeking to invest in solutions that protect the planet while driving financial outcomes, it differs from traditional “impact investing.” Systemic investing looks at the combinatorial effects across assets and strives to drive system-level change as opposed to enterprise- or even sector-level impact (for a deeper dive, check out this explainer). 

The event was convened by the TransCap Initiative, MIT Sloan Sustainability Initiative, Meridian Institute, and The ImPact, with additional support from TWIST and ClimateWorks Foundation. There were around 120 people in attendance — all invited leaders within the systemic investing field — representing a diverse network of investors, NGOs, subject matter experts, and philanthropists. The intent of the event was to create a true convening — to bring engaged experts to the table, learn about each other's work, explore case studies, identify opportunities to partner, and dive deep into the theory and practice of systemic investing.

Those of us in this emerging space believe systemic investing is a more effective approach to impact investing in protecting human and natural systems, because we know that trying to make progress through narrow, isolated, or incremental moves isn’t enough. We don’t have the luxury of time. To create true, transformational change, we need an improved approach.  

What Systemic Investing Needs To Be Successful

Impact investing, which started around 15 years ago, was designed to funnel resources towards organizations and causes that would generate a positive environmental or social impact, while also creating a financial return. But it turns out, good intentions weren’t enough. Impact investing never had the tools to be truly effective, and we’re seeing the disillusionment and fallout as a result (look no further than the recent wave of anti-ESG sentiment).

To create a more lasting and potent approach for impact around systemic investing, it’s crucial to equip ourselves with a robust, flexible toolkit and to be intentional and deliberate as we build this new movement. After walking away from the summit, here’s what I see as three key ingredients (among many) to help ensure our success.

1) Align on shared language and definitions.

A shared vocabulary ensures we’re all singing from the same song sheet. It’s critical in rooting various stakeholders in the same concepts, principles, and goals from the beginning. For example, during one of the breakout sessions at the summit, we spent an extended amount of time discussing just the word “investment,” and debating what it actually means in the context of systemic investing. Traditionally, investment narrowly refers to deploying money in order to gain a financial return later, but we agreed that we need to broaden our understanding of the word investment. For example, it needs to include philanthropy, it needs to take into account the target beneficiaries, it needs to consider the many forms of capital (e.g. monetary, social, political) to deploy and reassess metrics for returns, etc. “Investment” is just one example, but establishing foundational definitions is pivotal while we’re in the early stages of building this movement.

2) Leverage visuals to illustrate systems mapping.

Systemic investing is complex by nature. Taking a systems lens to any field is complicated, because you’re trying to deeply understand a system and identify its nodes, connections, and interdependencies. We’re finding relationships and dynamics that are often invisible or overlooked. Due to the complex nature of a systems-based approach, visual illustrations will be imperative to helping people understand these complexities and system interactions, illuminating feedback loops and cause-and-effect relationships. As we all know, a picture is worth a thousand words. Colorful, easy-to-read maps and diagrams will awaken people to the interconnections across our systems.

3) Understand the power of collaboration.

Transforming systems is a massive undertaking. No one person, company, or solution can do it alone. There is no silver bullet. The systemic investing movement will require radical collaboration in order to make real progress. It will also require convening a broad coalition of diverse voices, including investors, environmentalists, researchers and academics, scientists, policymakers, entrepreneurs, and corporate leaders. This summit was an invaluable forum, and will be the first of many to come.

After listening, learning, and deliberating with such an amazing group of pioneers in this space - from organizations like TransCap Initiative, Meridian Institute, TWIST, and many members of other organizations such as The ImPact, Toniic, CREO, and NEXUS - I walked away from this first-ever Systemic Investing Summit energized and inspired. There was an admittance that 15 years of impact investing has not delivered the results we wanted, nor risen to the urgency of today’s planetary challenges. But with that acknowledgement, there is an optimism and conviction that once we’re equipped with the right tools, there is a better path forward and together we can build it. 

If you’re similarly disillusioned with past investment approaches and are interested in this nascent movement, keep your eyes out for our next blog, in which we’ll outline some of the building blocks and foundational principles of systemic investing! Be sure to subscribe to our newsletter too.