Outdated financial theories like Modern Portfolio Theory (MPT) fail to address pressing systemic risks such as climate change and social inequality. CIOs must shift to system-level investing, recognizing the interconnectedness of portfolio performance and systemic health. Traditional metrics focus on short-term outcomes and overlook the feedback loops essential for sustainable investment. A new approach is needed that emphasizes the influence of investments on overall systems, fostering resilience and long-term value creation.
