According to Cohen, all companies have to measure the impact of their activities on the climate.
(Photo: imago / imagebroker)
Dusseldorf Saving the world with money. That sounds screaming. But what Ronald Cohen wants is captured quite well with these five words. The Briton is considered the father of “impact investing”, which he sees as a kind of sustainable investing, albeit on a higher level and with a positive effect – as the term expresses it. The author has a reputation as an innovative thinker and practitioner.
He founded the largest private equity firm, Apax. Above all, he works in a wide variety of initiatives to bring investors, philanthropists, governments and other organizations together. With one goal: to invest money in socially important projects in such a way that both the general public benefits and investors achieve a return.
Cohen is so convinced of his mission that there is no alternative to the Impact future – not everyone has to share this opinion. In terms of content, however, the author makes one point. While writing, Cohen had no idea how turbulent the sustainable investment business is at the moment.
The author wants nothing less than to turn capitalism inside out. In the previous system, the environmental problems and the social imbalances are simply too great. And a typically sustainable investment is not enough for him. Above all, this wants to avoid damage. Investments according to Cohen should also have a positive effect and make it measurable. Cohen feels that his demands are confirmed by the fact that consumers, company employees and investors are already rethinking.
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As an example, he cites the first impact bond with a social goal, which he helped to design. Launched two years ago, Bond linked the return to the recidivism rate of young male prisoners in Peterborough UK prison. The proceeds from the bond were used to finance non-profit organizations that took care of the laid-off in a coordinated manner.
Sir Ronald Cohen: Impact. A new capitalism for real change.
Plassen book publishers
Kulmbach 2021
271 pages
22.90 euros.
In fact, the recidivism rate fell while it rose across the country. The government involved in the bond was able to pay out a return on the money saved, for example through lower expenses for housing the prisoners.
Problem: measuring the impact
A problem with the impact systems, however, is the measurement of the effect, as in the case described for the lower relapse rate. The public expenditure saved in the prison project was used for this purpose. The UK government has specially created a database that estimates the cost to the country in areas such as unemployment, homelessness and crime.
Cohen played a key role in building a database on the environmental impact of corporate activities in what is known as the Impact Weighted Account Initiative. He is ambitiously demanding that all companies measure and evaluate the effects of their activities and document them in their own financial reports. And governments must accelerate the enforcement of binding rules.
Investor interest appears to be high. The impact investing market is doubling every year. It is currently around a trillion dollars. According to estimates, however, large investors would have needs of a completely different order of magnitude: According to the International Finance Corporation, the demand is $ 26 trillion.
This is another reason why Cohen can in good conscience call for a revolution in capitalism. The author finds a parallel in 1929. Before the US stock market crash, every company looked for its own auditor, its own valuation methods; there were no auditors. After the crash, the US Securities and Exchange Commission was founded, accounting principles and auditors were introduced – some feared the end of American capitalism as a result.
In the future, investors will wonder how one could live without impact data
From today’s perspective, it is hard to imagine how investors could invest in the past without reliable information about companies. The author is certain: At some point in the future, investors will wonder how they used to live in a world without company reports with impact data.
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