21st Century Investing summary

Introduction

21st Century Investing by William Burckart and Steven D. Lydenberg. Learn how modern investing is shifting from chasing quick profits to building a sustainable financial future that protects both society and our planet. Do you remember when the rallying cry for investors worldwide was, Greed is good?

It was not all that long ago, just a few decades in fact. But now, with the social and environmental implications of unchecked greed becoming all too obvious, the cultural climate has changed. What is more, the literal climate has changed too. This summary is a how to guide for investors who want to change things, change them for the better, and change them for good.

It is not enough to divest from fossil fuels and pursue do-no-harm policies. Adding a few socially conscious companies to your portfolio does not cut it either. The issues facing the world today cannot be tackled piecemeal. They need to be tackled as systems.

This summary shows us how.

System-Level Investing Overview

Close your eyes for a minute and try to imagine your average investor. Go on just for a second. What kind of person do you see? Forget about the superficial stuff like the investor's appearance.

Instead, ask yourself whether the person you are imagining has a strong social conscience. Is this average investor altruistic and civic-minded? Are they caring and committed to changing the world for the better? Unfortunately, the answer is probably no.

If the investor you imagined was self-interested, greedy, and just looking to make a quick buck, then you are not alone. For too long, many investors have matched that caricature, and that is where system-level investing comes in. The key message here is system-level investing strengthens the social, financial, and environmental systems that society depends on. Too many investors have short-sighted and purely self-serving goals.

They invest to maximize their returns, and if they manage a fund, their clients' returns. These investors comply with the laws, sure, but as far as they are concerned, that is where their obligations to the wider world end. System-level investors, on the other hand, take a different view. Instead of focusing on short-term financial gains, they invest in ways that strengthen the systems that make human life sustainable and fair.

If this sounds a lot like sustainable investment to you, that makes sense. System-level investing and sustainable investing do overlap. Both have explicit environmental and social concerns, and both suggest that making a quick profit should not always be the most important thing. But system-level investors go further.

They are not necessarily fund managers or high-powered chief financial officers. A dabbling hobby investor can be a system-level investor too. But what sets them apart is that they are more active, targeted, and relentless than sustainability investors. They do not just buy shares in renewable energy companies and stop there.

System-level investors campaign for new policies to make companies get in line. They advocate for progressive industry standards, and they collaborate with like-minded investors coming together to make change. In short, they aim at systemic solutions. Short-term gains that come at the expense of vital systems like health care, consumer safety, and climate stability are no gains at all.

In fact, they are serious losses. Because when critical systems fail, almost every asset class suffers, making diversification far less effective. System-level investors realize this, so they invest in ways that make our fundamental systems stronger and more resilient. We will take a look at how they do that next.