Systems change approaches: embracing complexity to enable transformation

As we know, the systems in which we currently live keep producing climate change, biodiversity loss, and land desertification. These are three symptoms of the same issue: the disproportionate valorisation of short-term profit maximisation over other values, pressuring nature way beyond its own regenerative capacities.

As it becomes acknowledged that singled out innovations cannot – alone – halt and reverse these interconnected triple crises, more and more organisations are looking into developing systems change approaches, connecting the dots between interconnected solutions and blended investment architectures to implement them. Let’s explore the transformational potential of systems change approaches and systemic investing.

First of all, what is systems change?

A system is an ensemble of parts – be it people, organisations, species, landscapes, cells or any other parts – interacting with one another, according to patterns of behaviours, culture, values, governance and more. Put simply, systems are complex nodes of interdependencies. Systems change focuses on disrupting these patterns and interdependencies to shift the values this system produces.

How do systems change approaches differ from impact strategies?

In order to create the low-carbon, climate-resilient, fair and inclusive future the world needs, systems change approaches shift the challenge from funding the development of new solutions toward funding ways to coherently and systemically weave solutions we already have and what is yet to come. In other words, systems change approaches are about shifting from the single asset paradigm to a coherent network of solutions that can truly disrupt a system by embracing the complexity of that system (behaviours, values, governance, resource management, etc.).

As explained by Dominic Hofstetter, traditional impact investing is steeped in the single asset paradigm. Embracing the complexity of a system calls for a different funding approach: a portfolio approach of diverse capitals aligned behind a shared vision of change.

Okay, but who wants to bear the risk of that transition? While no blueprint currently exists for achieving a nature-positive status by 2030, the imperative for profound economic transformation is undeniable. In this path towards change, one question keeps coming back: who should bear the financial risk of that transition?