Excellent points Dr. Astrid Scholz. I also think that the systemic and bioregional approaches to impact investing have the potential to change the game - so long as they go all the way.
Which means no longer using portfolio theory to structure investments.
The expectation value and risk thinking that portfolios are built around is itself a very little known root cause of the challenge impact investing has, including much else that you point out in your article. If typical outcomes are far from average, which happens in any complex system, you know that the statistics being used are failing to describe reality! Instead you need to use the far more difficult statistics of non-ergodic complex systems.
A 1m and 10m video of this, and lots more in my book The Ergodic Investor and Entrepreneur, and in our offerings on systemic investment for investors at Evolutesix.
Excellent points Dr. Astrid Scholz. I also think that the systemic and bioregional approaches to impact investing have the potential to change the game - so long as they go all the way.
Which means no longer using portfolio theory to structure investments.
The expectation value and risk thinking that portfolios are built around is itself a very little known root cause of the challenge impact investing has, including much else that you point out in your article. If typical outcomes are far from average, which happens in any complex system, you know that the statistics being used are failing to describe reality! Instead you need to use the far more difficult statistics of non-ergodic complex systems.
A 1m and 10m video of this, and lots more in my book The Ergodic Investor and Entrepreneur, and in our offerings on systemic investment for investors at Evolutesix.
1m: Can impact investing do better? https://youtube.com/shorts/g8fUiIttLis
10m: Yes it can: systemic ergodic impact investing: https://youtu.be/mRehLtOvRx4
Btw, herds of Zebras can solve this problem! I draw the links in this interview with Carsten Terp of Impact Insider : https://impactinsider.dk/graham-boyd-stop-chasing-unicorns-zebras-create-more-value/