The anchor for system stewardship: Unlocking positive outcomes across sectors, value chains and policy

Institutional investors and owners, along with others in the sustainability space, started off looking at ESG as a side project separate from investment decisions. Sustainability data was an add on, poorly integrated in financial models and critically, poorly integrated across themes. The state of play has evolved. For many sustainability professionals the shift is the result of years demonstrating how sustainability shapes both risks and opportunities for business and financial portfolios alike.

While there is still work to do convincing some on the case for sustainability, the most advanced in the finance community are well past convincing and on to action. Leading investors are looking at both system risk and system stewardship as the two strategic guides to protect and restore people and planet. They understand our dependencies on them both. Investors, alone and in consortia, are looking for an anchor for their proactive approaches, where they use their capital, influence, and collaboration to shape resilient systems at a macro level.

Climate, nature and social pressures are not just sources of systemic risk but also opportunities. They affect entire markets and shape economies, not individual companies. Leading investors know there is no escaping these known risks by shifting around holdings and tweaking the compositions of portfolios. System stewardship is about tackling these risks and unlocking positive outcomes across whole sectors, value chains and policy landscapes, beyond one theme at a time and beyond one company at a time.

By bringing climate, nature and social into one assessment, the World Benchmarking Alliance’s Integrated Transition Assessment unites investors (and stakeholders beyond) with a roadmap that articulates the interconnected forces underpinning a systems approach. Climate, nature and social risks and opportunities are interdependent and none will change at pace without a comprehensive picture across and within each. Yet investors taking an integrated approach struggle as they often rely on fragmented or single-themed data and strategic guidance. The ITA surfaces connections instead of overlooking them, while giving an integrated view of a given companies’ transition readiness on the transitions across people and planet. It gives investors a unified lens to asses risks across the system and a tool to shift systems through stewardship. 

For example, consider that a bank with credible financed-emissions targets can still have no assessment of nature risk in its lending book and no human rights due diligence on the projects it finances. That gap matters because among the companies it lends to, only 20% trace products to understand nature impacts and just 10% assess human rights risks in their supply chains. An integrated score surfaces the exposure, and it changes both the engagement conversation and the escalation trigger.

Integration is built into the ITA's method rather than assembled afterwards, with integratory indicators that surface the connections between climate, nature and social rather than scoring each separately and adding them up. The assessment looks at how companies manage the trade-offs and co-benefits within their own plans, and the score recognises those building resilience across all three. Only 15 of the 750 companies in the ITA baseline assessment manage climate and nature in an integrated way.

To prioritise engagement, escalation strategies and hold whole portfolios to a consistent standard, system stewardship needs one comparable reference point. Competing metrics have often split effort across multiple and inconsistent actions, but the ITA consolidates these frameworks into a single company-level signal of credible transition progress. This company progress across 2000 companies has the potential to produce insights on regions, sectors, themes, integration and other strategic markers for investors. This can be applied in:

• engagement and voting based on evidence
• escalation triggers that hold across themes, not in isolation
• a shared reference point whose influence grows as more investors use it

System-level investing is moving from a theory of universal ownership into practice, and the ITA gives it the evident base to do so well.