NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Grant Harrison

ESG analysis helps investors consider how environmental, social and governance factors could affect long-term corporate value.

For large, institutional investors such as asset managers or pension funds, which own a slice of the entire economy and can’t diversify away from system-wide risks, that may not be enough. That’s why more are leaning into “systems-level investing,” an approach that aims to generate superior long-term, risk-adjusted returns by studying the complex systems that drive economic and financial outcomes.

Photo courtesy of SomeDriftwood.