Humanity faces a stark

and urgent choice:

Humanity faces

a stark

and urgent

choice

Are we heading for a breakdown or a breakthrough?

Transformative Investment to tackle global challenges

Investors have a key role to play in bringing about a just and sustainable world

The cascading crises of climate change, biodiversity loss and growing inequality have led to an evidence-based consensus among international organisations such as the Intergovernmental Panel on Climate Change (IPCC) and the UN Office for Disaster Risk Reduction) that business-as-usual will produce catastrophe.

To avoid disaster and embrace system change to achieve a deep transition to worldwide sustainability, we must radically change the way we invest. In an unprecedented global research project, historians, sustainability experts, and public and private investors collaborated to formulate a response to this challenge: Transformative Investment.

Financing system change

The 12 principles for Transformative Investment

The Deep Transitions Investment Philosophy contains 12 principles to provoke real action and systemic impact. Socio-technical systems providing basic needs such as energy, mobility, and food are currently based on unsustainable practices such as fossil fuel dependency, globalisation and mass production. Transformative Investments are long-term investments that trigger multi-dimensional change, and remake the rules of one or more socio-technical systems. The 12 principles for Transformative Investment guide this process.

Goal Setting

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Investment Strategy

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Investment Process

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Sharing & Learning

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The estimated global net present value of stranded assets in coal power generation through 2050 ranges from

$1.3 to $2.3 trillion

Over the next 15 years the OECD estimates that an annual investment of

$ 6.9 trillion

in energy, transport, building and water systems is necessary to meet the requirements of a 2 degree scenario as set in the Paris Agreement.

Testimonials

Insights from leading Deep Transitions panellists and researchers

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Impact and ESG investment practices are bringing very positive developments to the industry. However, certain dominant practices often favour system optimisation rather than deeper and more fundamental societal transformations. These include, for example, short-term focus, narrow interpretation of fiduciary duty, rigid asset class distinctions, backward-looking risk management, and incentives structures. To support global net-zero targets or the trajectory stipulated in the Sustainable Development Goals, we need to change the way we invest. Investments need to contribute to long-term system change. Currently, ESG investors often lack the tools and assessment practices to evaluate investments based on their transformative potential.

Investment is an incredibly powerful tool and we urgently need to scale up investment to fully fund socio-technical system change. Socio-technical systems provide basic needs, such as energy, mobility, and food. They dictate everyday behaviour, from our modes of transport to the food we consume and the values we hold. Currently, these systems are based on unsustainable practices such as fossil fuel dependency, globalisation, linear mass production and mass consumption. Transformative Investments are long-term investments that trigger profound multi-dimensional change which ultimately leads to remaking the underlying principles of one or more socio-technical systems.

Participating in this project allowed for constituents from the public, private and academic spheres to opine on what successful systems level change could look like and how to best implement it. Collaborating with this group on sharing our findings via the investment philosophy will allow others to see how they may implement systems level change in their own organisations. Our multi-asset impact investing portfolios will attempt to do just that.

Starting from where we want to be as a society and reflecting on how current innovation niches can get us there to then try and figure out what our investment strategy should look like has been an incredibly valuable exercise.

A History of Transitions, Transformations & Sustainability

In Deep Transitions we learn from the past to shape the future. Journey through the foundations that have made Transformative Investment possible.

The journey towards investment for system change

Investment shaped the world we live in today and it has enormous potential to create a sustainable and just future.

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2012
January

Interested in learning the full history of Deep Transitions?

We describe every milestone since the first Deep Transition that started this global meltdown several 100 years ago.

Get the Key Documents

Take a deep dive or quick tour of Transformative Investment

Download the full Transformative Investment Philosophy for a deep dive into its background, process, and impact or the Quick Guide for initial understanding.

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