The importance of embracing complexity in polarizing times
In an era marked by deepening divides, the significance of nuance in societal conversations cannot be overstated. Today, rather than seeing constructive debates that enable progress, there seems to be a “hardening” of debates (1). How do we not lose sight of the middle ground in an age where engaging in discussions means picking a side? Decision-making in any industry requires these considerations. In asset management, it has never been more important.
Nuance in societal discourse
The Dutch Institute for Social Research (SCP) highlights the escalating concerns surrounding polarization. 75% of Dutch citizens express apprehension about the growing absence of nuance in debates, accompanied by a widening chasm in opinions on societal issues (2). Eelco Harteveld, a political scientist at the University of Amsterdam, explains that polarization is not necessarily about opinions moving further apart; but how we think about one another (3). In contrast to a purely rational difference of opinions, polarization involves a growing emotional sense of difference and mutual distrust (4).
In its essence, polarization is not necessarily a negative phenomenon. One can reason that healthy debate is vital for translating ideas into meaningful change, to bridge the gap between groups that can seem impossible to reach. Nuance in societal discourse requires acknowledgment and mutual respect for the diverse range of perspectives that exist. This approach promotes a more comprehensive understanding of complex issues.
Necessary nuance in asset management
In the asset management world, the shift towards responsible investment practices demands nuanced perspectives. To address this complexity, nuance is necessary prior to judging whether investments are truly ‘responsible’ or not. Imagine an asset manager who wishes to align their portfolio with environmental sustainability goals. They decide to exclude companies associated with carbon-intensive activities, a move widely considered ‘responsible.’ However, when considering that some ‘responsible’ companies operate within industries that also contribute to carbon emissions, does divesting from such companies inadvertently limit an asset manager’s ability to influence from within? The crossroads of ethics and influence does not adequately capture the intricate balancing act investors must undertake. How do you, as an asset manager, explain this balance to your societal stakeholders?
From extremes to understanding
So what does this mean for decision-makers trying to navigate polarization? Does considering nuance always warrant the avoidance of taking a stance? Whether we are talking about societal sentiment or investments, it is crucial to recognize the importance of nuance in our conversations. Striking a balance between progress and backlash calls for recognition of the multifaceted nature of societal challenges and the need to address them in a holistic manner. We need to be able to keep talking to one another, even when our opinions differ. In the face of growing distrust between societal groups, what is needed to establish more common ground? How can we bridge the gap and foster more nuanced conversations?
Footnotes
