Introduction to the philosophy of Transformative Investment adopted by the Deep Transitions Lab, an approach that goes beyond traditional investment strategies by focusing on system-level change.
Transformative Investment recognises the limitations of investment that prioritises short-term financial return, while neglecting social and ecological costs, disregarding unquantifiable uncertainties, and failing to consider long-term systemic dynamics.
The philosophy encourages a shift towards long-term, holistic investment strategies that account for the interconnectedness of sustainability challenges. It is built upon 12 principles of transformative investment, grounded in the historical understanding of large-scale societal shifts. They provide a framework for investors to:
- Establish ambitious goals that prioritise transformative change over incremental improvements
- Develop strategies that embrace a long-term perspective, acknowledging the inherent risks associated with Transformative Investments, and considering how different investments can work together to achieve systemic change
- Make decisions about investments in the context of broader transition dynamics, avoiding solutions that could lock in unsustainable practices, and seeking partnerships and collaborations to enhance their impact on systems change
- Share and learn, experimenting with new tools and approaches, interdisciplinary research, and contribute to the ongoing development of Transformative Investment practices
Principles are not prescriptive, but provide a catalyst for investors seeking to surface fresh thinking, dialogue and decision-making towards deeper systemic change.
Acknowledgements
Contributing authors: Laur Kanger, Jack Davies, Victoria Ward, Bipashyee Ghosh,
Caetano Penna, Phil Johnstone, Wendy Schultz, Carla Alvial Palavicino, Imogen Wade.
This introduction was compiled with the support of James Stevens at Jigsaw Foresight and is based on the Investment Philosophy for the Second Deep Transition. The Investment Philosophy is the output of a collaborative process between the Deep Transitions research team and the Global Investors Panel: a panel of 16 public and private investors whose contributions and insights to the panel sessions informed the content of of both the full report and this guide.
The panel consisted of:
- Nick Abel (CalSTRS – California State Teacher’s Retirement System)
- Dominic Burke (Lankelly Chase Foundation)
- Yuni Choi (RS Group Asia)
- Audrey Desiderato (Mirova SunFunder)
- Kate Fox (Baillie Gifford)
- Drew von Glahn (Collaborative for Frontier Finance)
- Jonathan Hausman (Ontario Teachers’ Pension Plan)
- Lisa Jordan (Draper Richards Kaplan Foundation)
- Atanas Kolev (European Investment Bank)
- Göran Marklund (VINNOVA)
- Katherine Ng (United Nations Principles for Responsible Investment)
- Christopher Palmberg (Business Finland)
- Roberta Benedetti del Rio (Impact investor, and senior advisor to Just Climate, a subsidiary of Generation Investment Management)
- Dimple Sahni (Anthos Fund & Asset Management BV)
- Sanjoy Sanyal (Caspian, Regain Paradise, Adelphi)
- Daan du Toit (South African Department of Science and Innovation)
Design and illustrations by Naz Costante
3D rendered images by Deep Mind (Unsplash)
Citation
Schot, J., Benedetti del Rio, R., Steinmueller, E. and Keesman, S. (2022). Quick guide: transformative investment philosophy. Deep Transitions Lab. Available at: https://tipresourcelab.net/resource/quick-guide-transformative-investment-philosophy/
