Giving Compass' Take:

• This TriplePundit post examines systems thinking — how parts of a broader system fit together — and its influence on environmental, social and governance investments over the next year.

• In what ways can we turn systems thinking into action? Which opportunities for social change through mobilizing capital will hold the most promise?

• Here are four more lessons for effective systems thinking.

Amidst all of the important improvements in environmental, social and governance (ESG) data, all of the thoughtful research reports, and all innovative new investment options, another, deeper trend has taken root. As we turn towards 2019, we see increasing evidence that systems thinking is becoming more prevalent and influential throughout corporations and the investment community. This subtle, under-the-surface development is one of the most vital requirements for effective long-term investing.

Why is this wonky-sounding idea important? Systems thinking is a deceptively simple concept, a holistic approach to analysis that focuses on how parts of a broader system connect and relate to one another. You know that old saying, the whole is greater than the sum of the parts? Systems thinking aims to understand the whole, in addition to the individual parts.

Systems thinking is a close cousin to common sense, but it stands in contrast to the arc of development of our analytical and educational tools. Over time, these tools have focused on more and more narrow lines of inquiry, examining more and more specialized questions. This expertise is needed, of course, but it is even more powerful when our specialized knowledge is combined with an understanding of the greater context.

Read the full article about systems thinking in 2019 by Katherine Collins at TriplePundit.