{"id":3344,"date":"2025-10-20T07:07:18","date_gmt":"2025-10-20T07:07:18","guid":{"rendered":"https:\/\/thefifthelement.earth\/staging\/?post_type=opinion&p=3344"},"modified":"2026-02-04T08:56:20","modified_gmt":"2026-02-04T08:56:20","slug":"the-foundational-thinking-behind-system-level-investing","status":"publish","type":"opinion","link":"https:\/\/thefifthelement.earth\/staging\/opinion\/the-foundational-thinking-behind-system-level-investing\/","title":{"rendered":"The foundational thinking behind system-level investing\u00a0"},"content":{"rendered":"\n

It may still surprise, on reflection, that social and environmental responsibility criteria seemed to arrive in the world of business and finance like a sudden awakening. The realisation dawned that, beyond the individual neoliberal unit of profit maximisation, something was owed \u2013 and owed to someone (or something) other than ourselves. The very word responsibility carries within it the idea of responding for something, of taking on the external consequences of our actions. <\/p>\n\n\n\n

So, if the initial surprise is set aside for a moment, the picture becomes clearer \u2013 it was a one-way extension of humans towards others, towards nature. <\/p>\n\n\n\n

This suggests a separation. And the distance from nature widened in the race of progress, to the point where we now believe ourselves \u2018exempt from ecological processes<\/a>\u2019. So, I would argue that social and environmental responsibility, real-world impact and broader concepts of ethics, care and morality are all attempts at closing that gap with nature. They aim to respond for that very human \u2018othering of nature\u2019. <\/p>\n\n\n\n

It\u2019s no coincidence that these concepts can be captured by the very simple notion of \u2018doing good\u2019. After all, is there anything more other-regarding than doing good? <\/p>\n\n\n\n

Let\u2019s pause and reconsider…<\/strong> <\/h2>\n\n\n\n

This whole framework is flawed. It makes no real inroads towards securing a more sustainable future, because it is a victim of its own reductionist approach: I am I, and there are other \u2018not-I\u2019s\u2019 out there that somehow need attention and care. <\/p>\n\n\n\n

The arrival of responsibility merely shifted the \u2018not-I\u2019 boundary a little. We admitted to ourselves the co-presence of other things in our mental model of reality. The environment became something that surrounds us, something that we use, but something that most of the time remains an other. Any responsible act is viewed as altruistic (note the Latin alter<\/em>, \u2018other\u2019) to benefit an external other. <\/p>\n\n\n\n

Think about it \u2013 today, the mother of all reductionisms is the widespread belief that all our problems have solutions. The assumption is that, regardless of the level of uncertainty confronting us, by providing adequate resources (capital, knowledge, research, technology) and an efficient, institutionalised mechanism for allocating these resources (the market), we will eventually fix everything. Everything that is \u2018not-I\u2019. <\/p>\n\n\n\n

Nonetheless, we recognise sustainability as a complex problem that we don\u2019t know how to solve. And we come to admit<\/a> that no invisible hand, no silver bullet will be able to deliver the solution. The dominant, hard ideology of reductionism \u2013 typically associated with determinism, certainty, predictability, control and rationality \u2013 is not fit for purpose. Only a more radical, transformational systems change appears necessary. <\/p>\n\n\n\n

…and now let\u2019s mend what\u2019s broken<\/strong> <\/h2>\n\n\n\n

What we should recognise as faulty is not responsible behaviour per se, but our mindset that generates our behaviour. Bear with me as I make this a little more thought-provoking. <\/p>\n\n\n\n

What if we were truly able to think in systems? What if rationality as the only reliable source of knowledge about the world had been complemented by a worldview grounded in meaning, relation and interconnection? It would have changed everything. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Systems thinking is not a solution; it is a mental model that allows in broader insights, mind-opening views and connectedness with nature. It bluntly reminds us that all life on Earth is interconnected. And this knowledge opens the door to purpose and meaning. Because what we erroneously perceived as \u2018other\u2019 and \u2018outer\u2019 is instead inseparable from us.\u00a0<\/p>\n\n\n\n

So again, what would have happened if conceiving the self as belonging to the whole had accompanied the arrival of responsible behaviour? My answer is that no \u2018behavioural adjustments\u2019 would have been needed whatsoever. We would not have needed to respond for anything at all. Because \u2013 and this is the point I wish to make \u2013 in holistic, boundary-free models of reality, ethics and responsibility come naturally. <\/p>\n\n\n\n

It becomes clear now why ethics and responsibility are there, longing for a reappropriation of our lost unity with nature. A unity that, in today\u2019s dominant worldview of control and subordination of nature, feels impossible to reclaim. Perhaps impossible to conceive, even by adding responsibility as an extra layer. <\/p>\n\n\n\n

We\u2019ve just had a glimpse at system-purpose investing<\/strong> <\/h2>\n\n\n\n

If ethics and responsibility are about \u2018doing good\u2019 \u2013 as in the classic responsible investing principles \u2013 then the holistic, relational and inclusive approach of systems thinking and purpose is about \u2018being\u2019. And while doing calls for solutions, being calls for embracing our ecosystem of interrelations and complexity. <\/p>\n\n\n\n

I hope that you will agree with me that system-repurposed self-interest is the most sustainable configuration humans could ever attain. <\/p>\n\n\n\n

This mode of thinking has recently \u2013 and more pragmatically \u2013 been captured by the emerging field of system-level investing<\/a>. However, in my reading, the practice should not primarily be about shifting investment \u2018at the level\u2019 of the system, but to repurpose investment entirely for the sake of the whole system. For what it\u2019s worth, this may be better described as system-purpose investing. <\/p>\n\n\n\n

In other words, let\u2019s not confuse system-level ownership with our ultimate goal. It often happens, in fact, that some investors become so large and influential that they end up owning \u2018everything\u2019 (universal ownership). But what we then want to do is invest that ownership with meaning and purpose. <\/p>\n\n\n\n

The primary objective of system-purpose investing therefore is to acknowledge the inseparability of ownership and purpose at the system level. <\/p>\n\n\n\n

Several important implications follow: <\/p>\n\n\n\n