This white paper shares new insights to ensure that the long-term impact of non-traditional risks and opportunities can be better understood. This report leverages use cases to identify critical systemic risks that address an annual investment gap of $6.27 trillion. The report identifies six systemic risks and establishes a governance framework to enable the investment community to address risks related to water security, climate change, population growth, geopolitical uncertainty, negative interest rates, and technology disruption.
This paper focuses on transformational investment from the viewpoint of the institutional asset owner community – the investor perspective. Recipients of transformational investment can include countries and cities that require capital and technology transfer to address these risks locally, and thus the conclusions are also relevant for these stakeholders – the investee (or “recipient”) perspective.
This report:
– Identifies six global systemic risks that affect global asset owners (additionally, pandemic risk with the specific example of COVID-19 is addressed in a paper supplementing this report)
– Summarizes case study insights from large asset owners
– Introduces a governance and decision-making framework, providing a pathway for investors to become experienced in translating risks into opportunities, while imposing discipline through holistic risk management – including a robust monitoring framework
– Describes potential future industry initiatives that will further improve governance and enhance the ability of longterm investors to respond to these six systemic risks