This state of the industry report documents the scope and variety of systems-level and related approaches undertaken by 50 asset owners and managers. It describes the activities they have executed, the tools they have used, the progress they have made and what research and support is necessary for further progress. It includes profiles of the specific policies and practices of these asset owners and managers that detail the tactics adopted by individual organizations and the variety of best practices that are being developed.
This report is organized as follows:
Section 1, entitled “The On-ramps to Systems Thinking,” provides details on the major developments in investment thinking that have direct or indirect implications on policy or practice at a systems level. Many of these initial steps still have a portfolio focus, but at the same time turn a face toward the systems level.
Section 2, “The 10 Tools of Intentionality,” turns to the crucial role of intention in systems-level investing. This section contains insights about the actual strategies that investors utilize to bridge the gap between what is happening within their portfolios and what occurs in the outside world.
Section 3 on “Implementation” examines five basic activities executed by many investors—belief investment and manager selection—and points out how they are now being used by some investors to incorporate more systems-related thinking. It also provides concrete examples of systems-level issues that investors are confronting, as well as examples different strategies.
Section 4, “Successes and Challenges” and Section 5, “Recommendations,” take a step back and offer a look at what has and has not worked to date in the transition to systems-level thinking and what additional resources and research would facilitate next steps.