Why Systems Thinking Matters Now in Impact Investing
ISSUE 15｜Embarking on a Journey to Uncover the Patterns Behind the Numbers
Over the past decade, impact investing has grown with remarkable speed. Japan is no exception. According to GSG Impact JAPAN’s 2025 survey, the domestic balance of impact investments reached ¥17.3 trillion, a 150% increase from the previous year’s ¥11.5 trillion. Most of this surge came from existing major financial institutions, with just eight banks and life insurance companies accounting for 94% of the total increase1.
Beyond Japan, the view widens. The Global Impact Investing Network (GIIN) estimates global impact investment assets at $1.57 trillion (approx. ¥235 trillion), with 47% concentrated in North America and nearly a quarter in Europe23. Within Europe alone, the market has reached €190 billion, spanning a diverse mix of asset classes4. Globally, private equity dominates, yet in emerging markets private debt makes up 43%, compared with just 4% in developed markets5. Japan, however, shows a distinct tilt toward debt in its domestic allocations72% loans, 15% - bonds, and only 2% unlisted equity6.
What do these figures reveal? The expansion is encouraging, but unless we examine how this capital reshapes the underlying systems of society, we risk missing the questions that lie beneath the surface.
🕰️ Tracing the Roots of Systems Thinking
Systems thinking views the world not as isolated parts but as interdependent wholes. It looks beyond events to the patterns, structures, and mental models that give rise to them. From Jay Forrester’s system dynamics in the 1950s7, to the Club of Rome’s Limits to Growth in 19728, to Peter Senge’s The Fifth Discipline in the 1990s9, and Donella Meadows’ “Leverage Points” in 199910, this lineage has become the foundation for today’s debates on impact investing.
🌍 Recent Currents in the Field
In May 2025, Rockefeller Philanthropy Advisors (RPA) published Systems Thinking for Impact Investing: Primer, Playbook, and What’s Next11.
The Primer clarifies why systems thinking matters, introducing six key “shifts” that move focus from short-term results to long-term change, and from individual deals to ecosystems12. It highlights practical entry points and case studies—from Access Foundation to Acumen—showing that systems thinking is within reach of all types of investors.
The Playbook complements this with worksheets and guiding questions, supporting investors step by step from deal-level mapping to portfolio-wide strategies13. Its message is clear: don’t wait until you’ve mastered the theory—learn by doing.
Impact Frontiers, in its 2023 report Getting Started with Systems Mapping & Impact Management, likewise stresses the value of mapping externalities, risks, and institutional constraints, so that investment decisions can be deepened at both deal and portfolio levels14.
Together, these tools suggest that impact investing is evolving from “measurement and management” toward true “systems change.”
🔄 The Limits of the Linear Logic Model
The familiar logic model - “inputs → activities → outputs → outcomes → impact” - offers clarity for monitoring and reporting. But it overlooks feedback loops, delays, and unintended consequences. More subsidies may increase outputs, yet structural constraints like regulations or housing shortages can blunt outcomes. Assuming that “more activity means more impact” risks missing the point.
The Global Health Impact Measurement and Management Practitioner Guide, published by Triple I for Global Health in July 2025, addresses these gaps15. It emphasizes not only outcomes but also process design, stakeholder engagement, and context. Significantly, SIIFIC’s work is featured as a case study, showing that Japanese practice is part of a global move to integrate structural perspectives into impact management.
Back in 2022, when SIIFIC began its own assessments, we encountered the limits of generic outcomes - such as “better quality of life” or “longer healthy lifespans” - that often obscured company-specific impact. This prompted us to bring in systems thinking: to identify leverage points, translate them into impact KPIs, and design models that extend beyond the linear. A good Theory of Change (ToC), we realized, is one that moves people. For us, systems thinking is a way to design ToCs that inspire action - logic models that move.
🌱 The Value of Systems Thinking for Investors
Bringing systems thinking into investment allows us to generate more sustainable impact by addressing structural barriers. It broadens the investor’s role from funding to shaping contracts, transparency, and stakeholder relationships. As Donella Meadows argued, acting on higher leverage points - rules, flows of information, and values - offers the chance to catalyze deep change.
It strengthens risk management, by illuminating delays and unintended effects. And it fosters adaptive learning, enabling investors and investees alike to evolve with changing contexts.
✨ How Do We Weave the Stories Beyond the Numbers?
Impact investing holds the potential to reshape lives and systems. But unlocking that potential requires us to ask, not just “What outcomes were achieved?” but “What system did we shift?” Numbers may inspire hope - but only by confronting the questions behind them can we take impact investing to the next stage.
GSG Impact JAPAN. Impact Investing in Japan: Annual Survey Report 2024. 31 March 2025.
GIIN. Sizing the Impact Investing Market 2024. Global Impact Investing Network, 2024.
GIIN. State of the Market 2024: Trends, Performance and Allocations. Global Impact Investing Network, 2024.
GSG / Impact Europe. The Size of Impact: European Impact Investing Market Sizing. 2024.
GIIN. State of the Market 2024: Trends, Performance and Allocations. Global Impact Investing Network, 2024.
GSG Impact JAPAN. Impact Investing in Japan: Annual Survey Report 2024. 31 March 2025.
Forrester, J. W. Industrial Dynamics. MIT Press, 1961.
Meadows, D. H., Meadows, D. L., Randers, J., Behrens, W. W. The Limits to Growth. Universe Books, 1972.
Senge, P. M. The Fifth Discipline: The Art & Practice of the Learning Organization. Doubleday, 1990.
Meadows, D. Leverage Points: Places to Intervene in a System. Donella Meadows Institute, 1999.
Rockefeller Philanthropy Advisors. Systems Thinking for Impact Investing: Primer / Playbook. Rockefeller Philanthropy Advisors, 2025.
Rockefeller Philanthropy Advisors. Systems Thinking for Impact Investing: Primer. Rockefeller Philanthropy Advisors, 2025.
Rockefeller Philanthropy Advisors. Systems Thinking for Impact Investing: Playbook. Rockefeller Philanthropy Advisors, 2025.
Impact Frontiers. Getting Started with Systems Mapping & Impact Management: Discussion Document. July 2023.
Triple I for Global Health. Global Health Impact Measurement and Management Practitioner Guide. 29 July 2025.