Sir Ronald Cohen: Impact Investing Is the Future

Transcript

[MUSIC] [APPLAUSE] >> Hi, everyone. >> Say, Sir Ronald, welcome. >> Thank you. >> We are delighted to have you with us here today. And so there's many budding entrepreneur here in the audience who would be quite satisfied if they had the one successful venture under their belt. But you've not only successfully co founded five to date and counting b... Read More

Summary

This video features a conversation with Sir Ronald Cohen, a successful entrepreneur and founder of various ventures. He discusses the importance of having courage in one's convictions and ignoring skeptics when pursuing new ideas. Sir Ronald also highlights the evolution of impact investment and its potential to address social and environmental issues. He shares his personal journey as an immigrant and his belief in the moral obligation to help those in need.

Questions & Answers

Q: How does Sir Ronald suggest one should handle skeptics when pursuing new ideas?

Sir Ronald suggests starting young and thinking big. He believes that as one grows older, skepticism and cynicism may set in, so it is important to surround yourself with enthusiastic individuals who understand your vision. He advises avoiding those who believe nothing new can be done or that nothing should be done for the first time.

Q: How has impact investment evolved over time and why is it important?

Sir Ronald explains that impact investment has come a long way since he first got involved in venture capital. He cites examples of impact investment conferences and meetings held around the world, indicating the growing awareness and interest in this field. He emphasizes that society needs to address social and environmental issues in new ways, and impact investment provides the means to do so.

Q: How does Sir Ronald suggest one should approach their career? Should they be polymaths or focus on their strengths?

Sir Ronald shares his personal history and explains that he pursued venture capital because he believed it was the future. He encourages individuals to connect with ideas or ventures they believe in and think can make a real impact. If unsure, he advises acquiring more experience before committing to a specific path. He sees the potential for polymaths, but ultimately it depends on finding something of value to connect with.

Q: Critics accuse the Valley of being too insular. How does Sir Ronald encourage students to approach their careers with regards to specialization or multifaceted experiences?

Sir Ronald shares his own experiences and explains that he was drawn to venture capital because he saw the potential for major innovation. He suggests that focusing on one's strengths and pursuing a multifaceted career should not be mutually exclusive. The key is to connect with something that has real potential and can make a positive impact. He believes that specialization and diversity can coexist in the pursuit of innovation.

Q: How does Sir Ronald see the sector of impact investment evolving and who are the key players driving change?

Sir Ronald envisions impact investment expanding into various sectors, including public equities, fixed income, venture capital, private equity, real estate, and absolute return. He believes that investors will be drawn to businesses that deliver not only financial returns but also measurable social or environmental returns. He mentions companies like The Gym, Tom Shoes, Warby Parker, and Etsy as examples of businesses that have successfully combined profit with purpose. Governments are also becoming more receptive to impact investment, and incentivizing it through various policies and initiatives.

Q: How does impact investing differ from general investment and why is it important to have measurable social or environmental goals?

Sir Ronald explains that impact investment is distinct from general investment because it sets measurable social or environmental goals and measures their achievement alongside financial returns. This allows for the allocation of resources based on more than just risk and return. He believes that intention alone is no longer sufficient and that businesses need to deliver measurable impact in order to inspire and attract the best talent. Impact investment provides the means to tackle social and environmental issues in a systematic and innovative way.

Q: How can businesses contribute to resolving conflicts, such as the current refugee crisis?

Sir Ronald emphasizes the role of business in creating opportunities and social innovation. He mentions a trust he supports, which encourages private sector collaboration in Israel and Palestine as a means to peace. He believes that businesses can be drivers of positive change and can contribute to resolving social and political conflicts by harnessing entrepreneurship, innovation, and measurable impact.

Q: How do you ensure momentum and push initiatives through to completion given ongoing political changes?

Sir Ronald highlights the strength of instruments like social impact bonds in maintaining momentum and ensuring completion of initiatives. These bonds are contractual agreements between investors and governments or other stakeholders, with payments tied to the achievement of predetermined social metrics. By setting clear objectives and measurable outcomes, social impact bonds create accountability and prevent deviations from the intended goals, regardless of political changes.

Q: How does Sir Ronald view the dividing line between impact investing and regular investing?

Sir Ronald distinguishes between investment with impact and impact investing. He acknowledges that many businesses have positive impacts without explicitly setting measurable social or environmental goals. However, impact investing goes one step further by setting and measuring specific objectives alongside financial returns. He believes that intentionally creating positive impact is necessary in today's world, and impact investing provides the framework to do so effectively.

Q: How has Sir Ronald's political views changed as a result of his involvement in impact investing?

Sir Ronald explains that he has been politically aligned with different parties throughout his career, but his focus has always been on policy rather than politics. He mentions his involvement with both the Labour Party and the Conservative Party in the UK, as both parties supported his initiatives in impact investing. He believes that impact investing is a bipartisan issue and can be embraced by governments across the political spectrum. His goal is to improve the delivery of government services and drive innovation through impact investing, regardless of political affiliations.

Takeaways

Sir Ronald Cohen's conversation highlights the importance of having courage in one's convictions and ignoring skeptics when pursuing new ideas. He emphasizes the evolution of impact investment and its potential to address social and environmental issues. His personal story as an immigrant reinforces the moral obligation to help those in need. The future of impact investing lies in measurable social or environmental goals and the collaboration of businesses, governments, and social sector organizations. The sector is expected to grow and disrupt traditional business models, leading to innovative approaches in tackling social issues.