Check out the following recording of the TIIP and Morningstar event that provided a pre-release look at TIIP’s latest report, Measuring Effectiveness: Roadmap to Assessing System-level and SDG Investing. This report provides investors with a breakthrough roadmap for measuring the effectiveness of system-level investing strategies, including measuring progress toward achieving the United Nations’ Sustainable Development Goals (SDGs).
The report is authored by William Burckart, Steve Lydenberg and Jessica Ziegler of The Investment Integration Project (TIIP) and was sponsored by the Investor Responsibility Research Center Institute (IRRCi).
Among the key findings in the report is the identification of four foundational characteristics of environmental, societal and financial systems. Investor actions which strengthen any of those four characteristics mitigates systemic risk, while investor actions which weaken any of those four will increase systemic risks.
- Adaptability: the environment, society, or the financial system’s ability to adjust to shocks and major disruptions (i.e., high adaptability, or self-regulation, helps systems better adjust to unanticipated external shocks).
- Clarity: the coherence, flow, access to, and transparency of information about and within a system (i.e., information flows among actors and about system components-and their interrelationships- enables investors’ ability to understand their influence and act accordingly).
- Connectivity: the value of a good or service is determined in part by how many people use it. The more it is used, the greater the benefit to the system (i.e., systems so structured have positive feedback loops that increase their health and resilience).
- Directionality: market incentives structured to encourage positive changes in stakeholder behavior (i.e., healthy systems are those in which influential actors enhance positive characteristics and align their actions with the systems’ fundamental goals).
Read an overview of the key findings by Prof. Bob Eccles in Forbes here.