Why Systemic Investing?
Traditional impact investing often focuses on individual projects or companies that create positive social and environmental outcomes. However, systemic investing takes a broader approach, recognizing that lasting change requires shifting underlying structures, risk-sharing mechanisms, and capital market dynamics. The webinar underscored that investors must move beyond isolated investments and instead contribute to the transformation of entire systems.
Dr. Paetzold illustrated this point with the example of traffic congestion: while replacing gasoline cars with electric vehicles is a positive step, it does not fundamentally solve the problem of traffic jams. Systemic investing, in contrast, seeks to address the root cause by rethinking urban mobility, public transportation, and behavioral incentives.
Key Takeaways from the Webinar
1. Understanding the System
One of the foundational elements of systemic investing is mapping out the different actors and interdependencies within a given system. Investors should identify leverage points—or "trim tabs"—where small changes can lead to outsized impact.
Dr. Paetzold emphasized the importance of recognizing these trim tabs, using the example of fisheries: instead of merely investing in sustainable fishing technology, systemic investors analyze the entire seafood supply chain, market dynamics, regulatory landscape, and consumer behavior to create lasting change.
2. Multi-Capital Strategies for Systemic Change
Another key theme was the use of multiple types of capital to drive transformation. Systemic investing is not limited to equity or debt financing; it involves blending philanthropic grants, concessionary capital, government incentives, and commercial investments to create a more comprehensive approach.
Erin Duddy highlighted the multi-capital framework that CSP and partners are developing, which helps investors deploy capital strategically across different intervention points within a system.
3. The Role of Investor Collaboration
A key challenge in systemic investing is that no single investor can change a system alone. Collaboration among impact investors, philanthropic foundations, policymakers, and entrepreneurs is crucial.
Tharald Nustad, a long-time impact investor and founder of Katapult, shared insights on TWIST (Together We Invest for Systems Transformation), a global community of investors and practitioners working together to deploy capital for systemic change. TWIST has built a case study library of real-world examples and is working with MIT and CSP to extract best practices and analytical frameworks.
4. Developing an Actionable Investment Framework
The webinar also introduced the upcoming Investor Guide to Systemic Investing, developed by CSP and partners, which will be published in March 2025. This guide will provide investors with practical frameworks for implementing systemic investment strategies.
Additionally, participants were invited to join CSP’s Investing for Systems Change course in Zurich in May 2025. This program offers hands-on training, case studies, and collaboration opportunities to help investors refine their approach to systemic investing.
Looking Ahead: The Future of Systemic Investing
Systemic investing is gaining traction as investors recognize that addressing the world's most pressing challenges requires more than incremental progress. By understanding and engaging with complex systems, investors can drive deep and lasting impact.
NorNAB will continue to explore this topic through peer-to-peer learning sessions, case study discussions, and collaborative initiatives. Stay tuned for updates on upcoming reports, guides, and events focused on systemic investing.
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