Impact | Ronald Cohen

Summary of: Impact: Reshaping Capitalism to Drive Real Change
By: Ronald Cohen

Introduction

Embark on a journey with Sir Ronald Cohen’s ‘Impact: Reshaping Capitalism to Drive Real Change’, a compelling call for an ‘Impact Revolution’. In this powerful book, Cohen delves into the importance of reimagining capitalism to address the world’s pressing challenges, such as income inequality, climate change, and environmental degradation. In a world where traditional profit motives exacerbate these issues, the author calls for a new paradigm that marries money-making with social responsibility. Cohen introduces instruments like social impact bonds and development impact bonds to turn problems into investment opportunities while painting a picture of how venture investment can emerge as a force of positive impact and widespread change.

The Impact Revolution

Sir Ronald Cohen advocates for a paradigm shift in global business practices. In his book, he proposes an “Impact Revolution” that prioritizes solving major global issues such as income inequality and climate change over profits. Drawing from his experience in philanthropy and venture capitalism, Sir Ronald’s insightful and inspiring message presents a powerful case for transforming the way we do business.

Impact Revolution for a Broken World Economy

The world economy is broken, and issues such as inequality and environmental degradation are causing social tensions. To counter this, Cohen proposes an “Impact Revolution” based on responsible business practices and mindful investment that addresses profit while meeting social responsibility. This approach can lead to large-scale solutions to global problems, as seen in the technology ecosystem created by venture capital.

Investments that Make a Difference

The world’s economy needs a blueprint that aligns entrepreneurs, investors, government, and philanthropy interests. Social and development impact bonds position societal needs and ecological problems as investment opportunities. Using corporate bond models, non-profit Social Finance tackled soaring recidivism rates after people were released from British prisons. Investors raised $6.7 million and would receive nothing if repeat offenses did not decrease by 7.5%. The 9.7% success rate generated savings for the government, paying only 3.1% in bonds. Such investments transform societal needs into profitable ventures, benefitting communities, investors, and governments.

Zipline’s life-saving drone delivery

Zipline’s drone system delivers medical supplies to Rwanda and Tanzania, serving 80% of Rwanda’s population. The company raised $190 million in venture funding and is valued at $1.2 billion. Author Andrew Cohen discusses how impact entrepreneurs like Zipline’s founders can surpass the success of tech entrepreneurs by positively impacting the planet. Cohen considers Elon Musk the most effective impact entrepreneur, as Tesla sales have reduced carbon emissions by 4 million metric tons.

Investing in a Green Future

The ESG market has risen to $31 trillion, and investors are increasingly finding green bonds a wise choice for financing environmental initiatives. Social impact bonds are less volatile and not affected by stock market fluctuations or interest rate changes. The UN’s Sustainable Development Goals have added fresh momentum to impact investing, with the potential cost of achieving them set at $30 trillion in the 2020s. It’s up to us to use our collective power to effect positive change in the private sector.

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