To realize a sustainable society, we need to address our bruised environmental and economic systems in their entirety. For that, vast and profound systemic changes must take place. Impact investing has offered a lifeline and is experiencing rapid growth. But as more hopeful investors enter the market, it is worth asking: is it producing the outcomes we need?
Despite the best intentions, much impact investment has little effect on systemic failures. It is akin to rearranging deck chairs on the Titanic. Systemic investment, by contrast, has spotted the iceberg: it focuses on transitioning entire economic systems and changing the ship's direction.
Impact investments tend to lock in actions, preventing systemic and potentially more beneficial transformations.