Portfolios and Systemic Framework Integration: Towards a Theory and Practice

The Impact Investor Club is pleased to share the inaugural report from The Investment Integration Project (TIIP) entitled “Portfolios and Systemic Framework Integration: Towards a Theory and Practice”. The report lays the groundwork for the project and argues that the strength or weakness of environmental, societal and financial (ESF) systemic frameworks substantially impacts the ability of investors to generate returns.

TIIP, which is the brainchild of Steve Lydenberg (Partner, Domini Social Investments, co-founder of KLD Research & Analytics, and the founding director of the Initiative for Responsible Investment at the Hauser Institute for Civil Society at Harvard Kennedy School), is designed as a pre-competitive innovation network building a library of best practice research and guidance. The goal is to help asset owners and managers fast track the integration of portfolios and ESF systemic frameworks, and provide a scalable platform for building investment integration capabilities within the financial services industry.

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Coinciding with the release the report is a new op-ed by Lydenberg and William Burckart—Strategic Advisor to TIIP, Founder of Burckart Consulting, and member of the Impact Investors Club—with Responsible Investor’s ESG Magazine on “It’s time for investors to start reporting on both portfolio and systems-level performance” . In the op-ed they argue that asset owners are making relatively little effort to relate their investment decisions to their impacts on global ESF systems that they operate within.

To bridge the gap between portfolios and systems, asset owners will need to take three concrete steps: acknowledge the connection between investment decision-making and systems level risks and rewards;  determine which systemic frameworks they can most appropriately and usefully focus on; and implement investment practices that allow them to contribute to the preservation and enhancement of these system while simultaneously achieving competitive financial returns for their portfolios.

Read more and stay tuned to the Impact Investors Club for more on TIIP in 2016.