We help institutional investors understand the big picture, or “systems-level,” context of their portfolio-level decisions. This is important because “systems-level” events, such as economic crises, ecosystems under stress, and societies in turmoil can disrupt the best-laid plans of investors and cost them dearly. Even seemingly “local” issues are now having much greater impact than they once did as the world becomes increasingly interconnected.
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Of particular interest from the point of view of systems-level considerations are the commitments of PGGM to exploring policies and practices that intentionally emphasize solutions to underlying systems-level challenges as well as self-organization through field building and thought leadership.
By allocating several billion Euros of its assets under management to a portfolio that is “investing in solutions for sustainable development,” PGGM brings to its investment approach a sharp focus on issues that “contribute to ‘financial ambition’ with regular risk and return expectations” and at the same time are “intended to support positive impact on at least one of [its] selected themes” (Klop 2016). It has focused on four themes with environmental and societal challenges that that address systems-levels considerations: climate change, water scarcity, healthcare, and food security.
As the world becomes increasingly interconnected, we’re beginning to see large investors adopt broader, “system-level” strategies; in fact, we believe this is the next step in the evolution of investment. Our most recent study of 50 institutional investors with total assets/assets under management of $17 trillion supports this belief. We help our clients think practically about the risks and opportunities of this big picture approach to investment. Learn more about us or subscribe today.
