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Transformative Investment insight report

This tool is designed to help you assess the transformative potential of your current investment approach. You’ll learn about the principles of Transformative Investment and which activities can be developed or stretched to orientate strategies towards deep systemic change.

The Transformative Investment Philosophy has 12 principles within four categories:

  • goal setting
  • investment strategy
  • investment process
  • sharing and learning

By answering a series of questions for each category (36 in total), you’ll generate a unique report highlighting strengths and weaknesses through the lens of Transformative Investment.

Transformative Investment

 

Step 1 of 4

Step 1 - Goal Setting

Transform the system

Target transformative potential rather than optimise specific impact outcomes or ESG criteria. Systems change is the only way to achieve a sustainable future. Transformative investing transcends definitions of impact investing and ESG investing, although it has elements in common with both these investment types.

Think long term

It may take many years of investing to achieve the impacts of systems change. Nevertheless, efforts must be made towards building desirable worlds in the long term, not towards marginal relative optimisations in the near term.”

Give voice

Inspire stakeholder participation, including the ultimate owners of capital. Be accountable to them. Transparency and broad engagement are particularly relevant: transition dynamics should be grounded in a shared vision for a desirable future.

Step 2 - Investment strategy

Visualise desirable futures

There are many benefits in defining high-level characteristics of the preferred future world investors seek to enable; developing a visualisation of the characteristics of that future; and incorporating these into investment strategies.

Enhance portfolio synergies

Take a portfolio apporach to mutliple-system change. Consider how to construct a portfolio (or a set of investment vehicles or policy programmes) for building a new meta-regime (for example, a circular economy) across systems.

Embrace uncertainty

Transformation comes with uncertainties. Transition pathways are hard to predict, and transformative investments are likely to be associated with a relatively high level of risk. To ensure transformative solutions can be scaled, experimental capital must be incorporated into blended finance structures.

Step 3 - Investment process

Contextualise in transition dynamics

Actively consider each investment in its relationship with ongoing transitions dynamics. Deep Transitions require multiple change processes and investments alone cannot create or steer this process. Instead, they can contribute to ongoing change processes and may be able to modulate their direction.

Open up, don’t lock in

Investors and science, technology and innovation policy makers need to consider whether investments support systems optimisation or systems change, not just in a single system but across multiple systems. The aim is to avoid blocking the potential for transformation and locking systems into unsustainable pathways.

Be a world builder through collective action

Transformational change requires parallel shifts in all aspects of a system. Investors and policy makers gain from seeking opportunities to partner and collaborate with one another and with other actors to influence a system on multiple levels.

Step 4 - Experimentation and learning

Experiment with transformative tools

Play with transformative investment tools and methods from the Deep Transitions framework. Help strengthen the field of transformative investment and enhance its applicability to a broader base of investors.

Foster interdisciplinary research

Experimentation is necessary to support transformative investment. Sustained interdisciplinary collaboration is a vital part of continued research efforts to assess, measure and monitor investments’ transformational potential and performance over time.

Share learnings

Value transparency and share learnings by making them open source.