Trendsetters: Transformational Investment Practices of Advanced Investors

The report identifies a gap in how institutional investors address global systemic trends, proposing a self-assessment framework across vision, governance, and implementation. It highlights that advanced investors move beyond passive screening to active engagement, scenario modeling, and the creation of innovative investment products when market offerings are insufficient. Climate change is identified as the most relevant trend, with advanced practitioners integrating it into fiduciary duties and using specialized tools like the TCFD framework to manage physical and transition risks.

• Asset owners vary in their integration of systemic trends, with 'advanced' investors having developed systematic implementation across public and private investments, while 'developing' investors are just beginning to address these trends or lack a robust approach.
• Climate change is ranked as the most relevant trend from an investment perspective by surveyed asset owners, leading the report to use it as the primary case study for its self-assessment framework.
• Advanced asset owners employ specific organizational traits to manage systemic risks, including cognitive diversity, a culture of innovation, and a commitment to transparency and strategic vision to enhance long-term risk-adjusted returns.
• When existing market products are insufficient, advanced investors innovate through 'seeding' small amounts into emerging themes or creating incubation portfolios with separate governance and incentives.
• Institutional investors generally prefer active engagement with companies and the use of trend-related strategies over divestment and negative screening, although some use strict revenue thresholds to exclude fossil fuel exposure.
• The lack of standardized measurement and data quality inhibits the management of trend-linked risks, particularly for ESG factors in private markets and specific geographies.
• Advanced investors utilize a variety of quantitative tools for risk analysis, with scenario testing and macroeconomic risk analysis being highly applicable across most systemic trends.
• There is a significant financing gap for certain systemic trends, such as water security and African infrastructure, due to perceived political risk, lack of scalability, and a lack of proof-of-concept track records.

APA

World Economic Forum (2021). Trendsetters: Transformational Investment Practices of Advanced Investors. http://www3.weforum.org/docs/WEF_Phase_II_of_the_Transformational_Investment_2021.pdf

Chicago

World Economic Forum. Trendsetters: Transformational Investment Practices of Advanced Investors. 2021. http://www3.weforum.org/docs/WEF_Phase_II_of_the_Transformational_Investment_2021.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Trendsetters: Transformational Investment Practices of Advanced Investors |date=March 2021 |url=http://www3.weforum.org/docs/WEF_Phase_II_of_the_Transformational_Investment_2021.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2021trendsetters, author = {{World Economic Forum}}, title = {{Trendsetters: Transformational Investment Practices of Advanced Investors}}, institution = {World Economic Forum}, year = {2021}, month = mar, url = {http://www3.weforum.org/docs/WEF_Phase_II_of_the_Transformational_Investment_2021.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }