By Bob Johnston
January 26, 2021

Titans of Finance – Sir Ronald Cohen on Impact Investing

Each of us has an ‘origin story’ about our childhood, family and their effect on our adult lives and career. In the case of today’s guest, who is considered to be the “father of impact investing,” I walked away from our conversation with tremendous admiration and respect for how his early years have influenced his life’s work.

At age 11, Sir Ronald Cohen’s family fled Egypt during the Suez crisis of 1956. His father lost a thriving business and they were forced to start over in the UK, as refugees. Flash forward just six years later and Sir Ronald earned acceptance to Oxford University – where he was President of the Oxford Union no less, followed by a full scholarship to Harvard Business School. Flash forward another handful of years and Sir Ronald joined Alan Patricof, who now runs Greycroft (listen to my podcast with Alan here) at Apax Partners to form one of the world’s first venture capital firms.

Sir Ronald got into venture capital to back tenacious individuals who came from nothing – just like he did – with a goal of using venture as a tool for good to create jobs in the UK, at a time when three million people there were unemployed. It made an enormous impact and he was knighted for his efforts.

Fun fact: the first fund at Apax was just $15m (sizable for the time)…and Apax’s latest fund raised a whopping $11Bn!

In the podcast, we discuss Sir Ronald’s latest book, Impact: Reshaping Capital to Drive Real Change, the program he chairs at Harvard which measures the environmental impact of over 1,800 companies, how impact is directly correlated to a company’s stock price, how a cost can be ascribed to a corporation’s pay gaps and a corporation’s lack of diversity…his thoughts for the new Biden administration as it relates to impact…and much more!

Sir Ronald Cohen's latest book:
(buy it on Amazon)

Sir Ronald Cohen (@sirronniecohen) | Twitter

Sir Ronald Cohen – Bio:

Sir Ronald Cohen is recognized as the father of impact investment and European venture capital (for which he was knighted). He is a pioneering philanthropist, venture capitalist, private equity investor, and social innovator, who is driving forward the global Impact Revolution. He serves as Chairman of the Global Steering Group for Impact Investment, which was established in August 2015 and brings together impact leaders across 33 countries worldwide. GSG works to catalyze impact investment and entrepreneurship to benefit people and the planet. Sir Ronald is also chairman of the Impact-Weighted Accounts Initiative at Harvard Business School, as well as the Portland Trust. He is a co-founder and former Executive Chairman of Apax Partners Worldwide, a global private equity firm. Sir Ronald is also co-founder of Social Finance UK, USA, and Israel and co-founder of Chair of Bridges Fund Management and former co-founding Chair of Big Society Capital. Oxford and Harvard educated, Ronnie was born in Egypt and left as a refugee at the age of 11, when his family came to the UK. He is now based in Tel Aviv, London and New York. He is the author of IMPACT: Reshaping Capitalism to Drive Real Change, which was published in 2020 by Penguin Random House.

Listen to the episode on Apple Podcasts, Spotify, Stitcher, Google Podcasts, Overcast, Castbox, or your preferred podcast platform.
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Do you really want your headstone to read: "He delivered 30% IRR?" (Internal Rate of Return)
On why venture capital should be more than just making money
We bring the ‘Invisible heart’ of the markets to lead the way
On how to tame the wild beast and ‘invisible hand’ of the markets

07:59 – Sir Ronald’s personal definition of impact investing:

Creating positive impact

Measuring theimpact

08:55 – How does corporation or family office track ROI for impact investing?

Look at multiples of the invested dollars – similar to venture capital

Also using big data to measure impact through: employee, operations and product; expressed in financial terms

11:15 – Wall of money flowing into impact

Environmental, social and government (ESG) objectives 

$40 trillion of investment dollars uses impact in it’s decision making

13:25 – Wealth Gap

The lack of diversity in corporate workforce and environmental damage is ignored

Bring transparency to impacts that companies create

He chairs program at Harvard Business School that publishes the environmental impact of 1,800 companies – Harvard Business School Impact Weighted Accounts initiative

1,800 companies that create $3 trillion worth of environmental damage each year

350 of the companies create more damage than they create profit each year

Correlation to lower stock market prices relative to competitors

If companies want to maintain their value on stock market, they need to adjust their behavior

A cost can be ascribed to a lack of diversity and each company is scored on diversity, pay gaps, gender pay gaps and advancement of different types of employees

20:50 – Role of media and press in telling the story

Press coverage of negligent acts allows shareholders to become advocates of changing the behavior of companies

That aside, more disclosure is needed both positive and negative about impacts on people and environment, expressed in audited financial terms

Government spends tax money to clean up negligence from corporations and there’s a better way if we can measure upfront in a preventative manner

26:15 – Amending Tax Code

Imagine a world where corporations get taxed on profit minus the positive impact they created or plus the negative impact they created; charge companies directly for the damage they caused

27:20 – Bono endorses the book ≠ “Money isn’t immoral, it’s amoral – and needs to be led. 

Capitalism can’t search only for profits in this day and age

Companies should get judged by investors by both profit and impact

Positive impact is a better way of doing business and investing in these companies is a better way of investing

Companies must deliver both impact and profit

29:26 – Economic theory & Adam Smith – Invisible Hand to Invisible Heart

Adam Smith’s Wealth of Nations book to his Theory of Moral Sentiments book discusses the Invisible hand of markets

The wild beast is the invisible hand of markets…Sir Ronald brings in the invisible heart of markets to lead

30:32 – Moving the invisible hand in the right direction

Business leaders taking the lead and influencing

Investors also influencing

Consumers are deserting companies they don’t respect 

Millenials don’t have the ambition to go to work for a fossil fuel company; they want to to work at impact-forward companies such as Tesla

33:25 – His early childhood in Egypt

Left Egypt at age 11 during Suez Crisis

Family arrived in UK as refugees, father lost his business in Egypt

Had tutors who helped him get into Oxford and ultimately a scholarship to Harvard Business School

34:30 – Discovering Venture Capital

While at HBS learned about industry

Joined Apax Partners  in 1975

First fund was $15m; now Apax recently raised an $11B fund

Impact they both have had on entire industries and thousands of entrepreneurs 

Brought the field of VC back to the UK and was knighted for it

Got into VC to back people who came from nothing just like he did and he wanted to create jobs in the UK at a time when 3m people were unemployed

He got a hand up and wanted to do same for others

Left Apax at age 60 to focus exclusively on social issues

More than just making money: Do you really want your headstone to say: “He delivered 30% IRR (Internal Rate of Return)?”

41:35 – Transparency on what business does is a human right

Right to know what’s in our products and ethics of companies that we buy from

There are now ways to measure

3-5 years away from having an app on our phone that points to box of tea and gives us all the info we need about company, environmental damage, etc.

44:20 – Biden Administration & Government’s role in Impact Investing

Biden similar to Roosevelt – must deal with inequality and environmental damage

Biden can bring companies and investors alongside his administration to help solve these problems with transparency 

Mandate that companies must publish impact-weighted financial accounts starting three years from now

Companies need to worry about diversity, equal pay, living wage, polluting environment 

This provides a solution at scale

Transparency on profit that companies make was why SEC was formed under Roosevelt

Take page out of same book relating to impact investing

Optimizing risk/return impact is good for all companies

51:45 – Contrarian View that Sir Ronald holds to be sure

Doing good as a company can help you do better

Companies that do it well have higher net promoter scores, have real fans, are more revered than competitors

54:00 – Sir Ronald’s go-to sources for information

Reads Axios daily based on recommendation by Alan Patricof

Reads print newspapers: NYT, WSJ, Washington Post, FT

Loves music – big fan of Spotify: Classical, U2, Beatles, Simon & Garfunkel, and opera


Sir Ronald discussing his new book on CNBC

Two fantastic videos of Sir Ronald speaking at Stanford Graduate School of Business here and here

Impact: Reshaping Capitalism to Drive Real Changebuy it on Amazon

Harvard Business School Impact-Weighted Accounts Project, which Ronnie chairs

Sir Ronald Cohen in Wikipedia

Apax Partners

Alan Patricof / Greycroft

Suez Crisis of 1956

Oxford University

Oxford Union

Harvard Business School

Ronnie co-founded and/or chairs these orgs:

Global Steering Group for Impact Investment

The Portland Trust

Social FInance

Bridges Fund Management

Big Society Capital

The Wealth of Nations, by Adam Smith

The Theory of Moral Sentiments, by Adam Smith




Simon & Garfunkel