London, December 11, 2025 – Railpen, manager of the £34bn railways pension scheme in the UK, in collaboration with Sinclair Capital and The Investment Integration Project (TIIP), has today published a major new report, “Embedding Systems Thinking and Stewardship into Practice,” offering a pragmatic roadmap for institutional investors to address financially material systemic risks and drive long-term value creation by making systemic stewardship part of their investment practice.
A Financially Material Imperative for Universal Owners
The report explores the evolution and practical implementation of systemic stewardship – focusing on systemic risks such as climate change, inequality, and governance failures – for highly diversified owners that are exposed to systemic risks, such as pension funds and some asset managers.
It provides a comprehensive literature review, regulatory analysis, and a range of strategic recommendations for combining system-wide stewardship with investment approaches, with a particular focus on how to navigate the particularities of the UK, EU, and US regulatory environments.
Key Findings and Recommendations
- Universal Ownership in Practice: The report highlights how highly diversified investors are exposed to risks that affect the entire market, not just individual assets. This creates a financial and fiduciary imperative to safeguard the viability of global financial, environmental, and societal systems.
- Systemic Risk Integration: Investors are urged to move beyond traditional risk management and incorporate systemic risks into their decision-making, using tools such as scenario analysis, systems mapping, and policy advocacy.
- Navigating Regulatory Divergence: The report provides guidance for investors to tailoring stewardship strategies to local legal and political realities, noting that UK investors in particular can leverage the UK’s enabling regulatory framework to shape global norms and collaborative frameworks.
- Building Organisational Capability: Recommendations include formalising business partnerships between stewardship and investment teams, integrating stewardship into investment processes, and deploying AI and digital tools to enhance stewardship capacity and reporting.
- Strategic Roadmap: The report outlines a phased implementation plan for investors, from preparing narratives for the 2026 Stewardship Code and launching regulatory intelligence dashboards, to leading advocacy alliances and developing frameworks for emerging risks over the next five years.
The report underscores the responsibility of asset owners to use all available levers, including stewardship, to drive long-term value creation at both the portfolio and market level. In a rapidly evolving regulatory and market landscape, leadership and decisive action are essential. Waiting for certainty may pose the greatest risk of all.
At Railpen, our stewardship focus and efforts have been increasingly shaped by the diversity of our holdings, which span the breath of the global economy, exposing us to system-wide sustainability and governance risks, but also opportunities. We’re delighted to have partnered with some of the leading voices in the space on this report. Systemic stewardship is a crucial part of a universal owner’s work to improve financial outcomes for their beneficiaries, and we hope that this report is a useful contribution to the industry debate, and that other universal owners will be able to implement some or all of the pragmatic, strategic suggestions of the report.” – Caroline Escott, Head of Investment Stewardship and Co-Head of Sustainable Ownership at Railpen
William Burckart, Chief Executive Officer at TIIP, said: “Institutional investors cannot deliver long-term performance if the environmental, social, and financial systems that underpin markets continue to erode. As TIIP’s work has shown, systemic threats – from climate instability to democratic fragility – are now defining drivers of financial outcomes. Railpen’s report demonstrates real leadership: it lays out a practical, actionable roadmap for how investors can understand and manage their influence on these systems, and how to mobilise stewardship, policy engagement, and investment strategy to reinforce the foundations of long-term value creation.”
Jon Lukomnik, Managing Partner, said: “Form needs to follow function. Investors invest to be able to pay real world liabilities. The ability to do that depends on total return, not return relative to a benchmark. And having adequate total return depends on a healthy economy and healthy capital markets. Systemic stewardship directly tries to mitigate risks to the economy and capital markets. Kudos to Railpen for not only recognising that, but for making the recommendations in this report broadly available to other investors.”
Read the report here.
About the Authors
This report has been prepared by William Burckart and Monique Aiken (of TIIP), Jon Lukomnik (of Sinclair Capital) and Caroline Escott and Shane McCullagh (of Railpen).
Acknowledgements: We would like to thank Becks Goodman, Paul O’Donnell, Scott Harrison and Verity Cannings (of Railpen) for their contributions and comments on earlier iterations of this report.
The Investment Integration Project (TIIP) is a boutique consulting firm that helps institutional investors: 1) understand how portfolio performance is intertwined with the health of environmental, social, and financial systems; 2) shape the structures and norms influencing those systems; and 3) embed systems-aware decision-making across all strategies and operations.
Established in 2015 by Steve Lydenberg and William Burckart—who coined the term system-level investing—TIIP’s pioneering thought leadership has enabled the alignment of investment practices with the long-term health of the systems underpinning value creation. At the center of TIIP’s work is SAIL (Systems Aware Investing Launchpad), an enterprise management and data platform that enables investors to integrate system-level investing across strategy, implementation, and governance. TIIP also offers customized services—Total Portfolio Activation, Total Portfolio Implementation, and Total Portfolio Review—to help clients benchmark progress, enhance portfolio design and stewardship, and apply system-level thinking in practice.
For more information, visit https://www.tiiproject.com.
For more than a quarter of a century, asset owners, asset managers and capital markets participants in five continents have asked Sinclair to help them align their investments to their beliefs about how to keep the capital markets healthy. Jon Lukomnik, principal of Sinclair, co-authored Moving Beyond Modern Portfolio Theory: Investing That Matters, which the PRI calls “seminal publication” about system-level investing. From creating branded thought leadership to reviewing the practices and procedures of some of the largest pension funds in the world to assisting fintech start-ups to jumping headfirst into the restructurings of multi-billion-dollar enterprises, we always act according to fiduciary standards.
Railpen’s purpose is simple – to secure our members’ future
We are responsible for over £34bn in assets on behalf of more than 350,000 members, providing market-leading pension administration and investment services for defined benefit (DB), defined contribution (DC) and hybrid schemes, including the Railways Pension Scheme – one of the UK’s largest, longest established, and intricate funds.
We are built on our heritage. Our history of helping everyday, hardworking people save for their retirement stretches back more than half a century. From our beginnings in 1965 as the pensions office for the British Rail Pension Scheme, we’ve innovated and evolved to serve the needs of the industry and the financial future of its workers.
We are committed to better member outcomes. Our role is delegated to us by our Trustee, whose unwavering passion to put members’ interests first is integral to everything we do – from how we administer the schemes to how we select, structure and size investments to protect and grow the longterm value of members’ savings.
We are agile and innovative. Guided by integrity, the importance we place on collaboration, and our member-first approach, we work with policymakers and industry leaders to advocate for a progressive and supportive policy environment that helps us to secure our members’ future and shape a more sustainable pensions landscape.
We are different from the norm. We put every pound of profit towards paying members’ pensions securely, affordably and sustainably. We make this our mission. Our long-term mindset opens up investment opportunities over multiple decades that enrich communities and the environment, set new standards for innovation and contribute to a resilient UK economy.
