In the Summer of 2023, The Investment Integration Project (TIIP) launched an inaugural SAIL (Systems Aware Investing Launchpad) cohort, made up of 22 asset owners and  institutional investors. Over the course of the six-month program, members of the cohort learned the fundamentals of system-level investing, including: why investors should care, what it means to manage systemic risks and rewards, why it is imperative to do so now, and how to integrate this new way of thinking into current investing policies and practices.

Due to the success of the program, and a growing waitlist of interested investors, TIIP is accepting Expressions of Interest for a 1-day virtual intensive on system-level investing to be held on March 12, 2024 from 9.30am-5pm ET.

Previously, investors could find ways to insulate their portfolios from certain global events. But even seemingly ‘local’ events today can immediately affect portfolios. The largest investors are recognizing this trend and considering the interconnection between environmental and social systems under stress and long-term performance. They are pioneering policies and practices that are additive to conventional investment scrutiny at the security and portfolio levels, helping them to confront global systemic challenges like climate change and income inequality–in the process, they are charting the next critical shift in the evolution of finance, which we call system-level investing.

Participants will learn:

1. What it means to manage system-level risks and rewards;
2. Why it is imperative to do so now; and
3. How to extend their current investing practice to the system-level

Related, on April 18, 2023, TIIP hosted "Introducing the Next Evolution in Finance: System-level Investing". Part celebration of the 2yr anniversary of the launch of the book 21st Century Investing, and part forward looking discussion of what happens next, the event featured a number of investors and field leaders working to manage systemic risks and advance industry transformation. Check out the recording here: https://www.youtube.com/watch?v=ZZu8ZB-qH_M

Background

The social and environmental challenges of the 21st century are new, different, and fundamentally destabilizing. Many of these challenges are systemic in nature; they are complex, interconnected global issues with multiple contributing factors. They impact entire societies and economies and threaten the global financial system and long-term investment returns across all asset classes. Income inequality, for example, is stirring nationalistic protectionist rage, upending democracies, and inciting trade wars. Human rights abuses, including forced labor, modern slavery, and human trafficking, are triggering war and conflict and weakening societies. Rapidly worsening climate change is accelerating natural disasters and leading to mass migrations.

While the drivers of these challenges are many and complex, one thing is clear: the financial industry is part of the problem. Many investors, for example, focus on short-term goals (e.g., beating stock benchmarks, generating the greatest returns in the shortest time possible). Such short-termism—short-term focus on price and efficiency—can impede investors from appropriately considering long-term social risks and opportunities to create long-term value. It causes investors to ignore destabilizing social challenges, to ignore the contributions they make to them, and to enable situations that worsen as they accumulate short-term profits.

Thankfully, the financial industry can also be part of the solution. System-level investing helps investors—be they institutions, families, or individuals—to recognize the scope and scale of their impact and influence on systemic challenges and on social, environmental, and financial systems more broadly. It guides them in using a combination of conventional and new approaches to intentionally managing this impact toward the goals of minimizing long-term systemic risks, capitalizing on related opportunities for long-term value creation, building resilient systems that support investments across all asset classes, and, importantly, promoting global well-being. Investors adopt system-level investing and pursue these goals alongside their ongoing management of portfolio risks and rewards and their pursuit of competitive returns.

Contact William Burckart at wburckart@tiiproject.com if you are interested in participating in the March 12th 1-day intensive.