At the Systemic Investing Summit
Last week in London, the Systemic Investing Summit convened a distinct segment of the impact investing ecosystem. Two Impact Europe members shared their insights and takeaways from the event.
Systemic investing is an “approach to capital deployment that seeks to transform systems to produce the best longterm outcomes for people and the planet,” according to a new paper rolled out at the Systemic Investing Summit. Hosted by the TransCap Initiative and TWIST, the two-day event convened a curated audience of impact investors, asset owners and systems-change thinkers. Several Impact Europe members were on the guestlist and shared their insights on the state of investing for systemic impact.
Teachings of Sarah Teacher
Sarah Teacher is the co-CEO of the Impact Investing Institute, the UK’s impact investing authority, whose contributions to harmonised definitions, standards and data has been instrumental for Europe’s impact ecosystem. In a LinkedIn post, which posed big questions from the Summit, Sarah also offered a precise summary of systemic investing:
“Systemic investing is a sophisticated, complex approach to impact investing — one that recognises the power of combining impact strategies with deep collaboration, centring the system outcome above all else. It requires a willingness to deploy a polycapital approach alongside others to drive meaningful systems change and tackle problems at their root.”
The polycapital approach poses distinct challenges for different capital providers in the ecosystem. For example:
>The “complexity of the language, approach and returns” of systemic investing can be a hurdle for newcomers
>Risk appetite of pension funds and insurers is lower than private wealth owners, making them more cautious collaborators
Some investors are more ideally situated to become systemic investors than others.
Learnings from Laura Boyle
Sessions throughout the Summit called attention to the role of private wealth in systemic investing, particularly this group’s leverage points. Laura Boyle, Principal at Snowball, was an essential contributor on this topic. In the session “The Paradox of Private Wealth” a provocative question arose: is private wealth simultaneously a cause of systemic challenges and a way to fix them?
Amidst spirited debate, the session pointed toward the different ways private wealth owners can drive systems change, pointing out the levers available to them to change the financial system as a whole.
“Snowball was presented as a success story of how private wealth can be agile in 'going first' in investing for impact,” writes Laura, “widening participation by other types of investors.”
Snowball’s theory of change, discussed in the session, integrates financial returns and positive impact. But this comes with challenges. According to Laura: “Snowball needs to reach a target size in order to be able to launch a product for retail investors, so private wealth holders are laying the groundwork and creating the pathway encouraging others to follow. A challenge in the room suggested this is happening too slowly, and that targeting market rate returns could lead to change being too incremental.”
This discussion brought together themes from throughout the Summit, such as mindset shifts and the influence of wealth holders on bold changes to the financial system. This brought out the inspiration, empathy and poetry of the Summit; to quote Keoni Lee (CEO, Hawaii Investment Ready): “How do you be the light which attracts other lights? How do you organically grow without forcing and compelling? By being in right relationships with people you're seeking to serve.”
Indeed, as summed up by the TransCap Initiative, the power of relationships was a recurrent theme. A call to action they highlighted came from Ewa Gladek (Founder and CEO, Metabolic): “If each of us connects with two people with a different set of beliefs, outside of our circle, to tell them about systems change, we can, in time, talk to the whole world.”
Next steps
The systemic investing approach differs from more ‘traditional’ forms of impact investing in prioritising the systems-level outcome above others. Even so, many investors for impact (and members of the Impact Europe community) may aim for systemic goals without self-identifying as a ‘systemic investor.’
Our call to action, beyond the invite-only Systemic Investing Summit, boils down to one word: exploration. There is a growing set of resources to explore on systemic investing and its potential integration in the work of impact investors. This includes resources for members wishing to forge connections with systemic investors – or likeminded explorers of the topic.
>Further reading: Investor’s Guide to Systemic Investing; useful summary post by Frank Kumli here.
>Save the date – 18 November: Impact Week in Malmö will include systems change in the event programme – stay tuned for announcements in our newsletter.
>Connect and share: Are you an Impact Europe member working in systemic investing? Are you looking to connect with others or share thought-leadership on this topic? Please reach out to Peter -- we’d love to hear from you.