The session reflected on the outcomes of the System & Governance Change Ecosystem Theme Community Interest Group pilot, where asset owners and advisers came together to identify opportunities for meaningful change across the financial system.
Charlotte O’Leary, CEO of Pensions for Purpose, invited speakers from Border to Coast Pensions Partnership, Rethinking Capital and System Change Investing to share perspectives on how to activate change. Discussions highlighted three areas of action: shaping the way we talk about finance to open upnew possibilities; redefining what we measure and value to support long-term outcomes; and adapting decision-making structures to enhance systemic resilience. The session offered practical insights into how finance can become more sustainable, purposeful and resilient.
The importance of systems thinking
The discussion repeatedly emphasised the need for a systemic approach in finance, particularly pensions, to address interconnected risks such as climate change, biodiversity loss, inequality and conflict. Isolated focus on environmental, social and governance (ESG) factors or individual sustainable development goals (SDGs) was seen as insufficient, given their systemic interdependencies. The Iceberg Model was used to illustrate how visible outcomes are shaped by hidden assumptions, beliefs and structures. Addressing these deeper layers through governance reform and cultural change was considered essential to tackling root causes, rather than symptoms.
Narrative and agency as catalysts
A recurring theme was the power of narrative in shaping behaviour and enabling change. Current financial narratives, often dominated by fear or fragmentation, were contrasted with the need for hopeful, coherent stories that expand the perceived purpose of finance. Speakers stressed the central role of agency, particularly that of asset owners, in driving change. Governance reform was identified as a lever to unlock greater stewardship and agency, allowing finance to support the wellbeing of environmental and social systems alongside financial outcomes.
Reforming accounting and incentives
Speakers also examined how outdated accounting practices obstruct systemic change by incentivising short-term or unsustainable behaviours. The “upside-down accounting incentives” were highlighted, where commitments to climate action are not recognised as obligations, while investments in sustainable solutions are treated as costs rather than assets. In response, an ‘accounting for reality’ approach was adopted; this recognises intangible obligations and assets, aiming to flip incentives and better align reporting with forward-looking sustainability goals. Such reform was seen as essential for making the business case for impact and systemic investing.
Inclusion and diversity in decision-making
The discussion moved to the importance of diversity in systemschange conversations. Conventional meetings often recycle the same ideas due to a lack of new voices. Participants argued for greater cognitive diversity, inclusion of lived experience and integrating nature’s perspective into decision-making. Spaces that allow for slowing down, reflecting and incorporating alternative views were considered vital to embedding regenerative and systemic approaches.
From theory to practice
While there was broad agreement on the need for systemic change, participants acknowledged the challenges of translating theory into action. Comprehensive, simultaneous reform was viewed as unrealistic; instead, a sequenced and pragmatic approach was recommended. Bottom-up initiatives, such as starting with accounting reform or building systemic resilience in targeted areas, were seen as achievable entry points. The influence of vested interests and entrenched assumptions were recognised as a barrier, reinforcing the need for safe spaces where stakeholders can challenge prevailing paradigms and co-create solutions.
Breakout groups:
Group 1
How can we build a community of reflective systems thinkers in the investment industry?
Create space, legitimacy and support for reflective practice: ensure investment professionals have time, incentives and legitimacy within their day jobs to engage in systems thinking, supported by sustainable funding and cognitive diversity, while connecting with voices beyond finance.
Build skills through existing institutions: leverage professional bodies– for example, CFA Society, Pensions Management Institute, Institute and Faculty of Actuaries, Pensions UK and networks like Pensions for Purpose– to integrate systems thinking education, language and practice across the industry.
Group 2
What narrative would encourage asset owners and asset managers to engage?
Tackle misalignment and incentives: a compelling narrative must address the persistent misalignment between fiduciary duties, incentives and long-term sustainability goals across owners, advisers and managers.
Use clear, inclusive language with a human focus: shared definitions and accessible language, tied to the personal “what does this mean for me?” dimension, are essential to build genuine buy-in.
Group 3
How can incentives be used to change behaviour?
Strengthen accountability and systemic incentives:the shift from narrow single-measure focus –for example, carbon only– toward holistic impact, with consequences for directors, board-level accountability and stronger regulation balanced with business-case rewards.
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