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Sir Ronald Cohen: impact investing needs venture capital-style support



The father of social investment and chair of the G8 Social Impact Investment Task Force has called on governments to provide more support to social impact investment to help it thrive.

Speaking to the Thomson Reuters Foundation during the social capital markets conference SOCAP, Cohen said, “We’re in a world where there is huge latent demand on the part of entrepreneurs, there is huge latent demand on the part of investors, you see a lot of socially responsible investment already.

“What we haven’t had are the financial instruments and the legislation to enable this to take off.

What we have tried to do is to draw out some of the measures needed to turn impact investment into something that is like venture capital or private equity.”

The G8 Social Impact Investment Task Force was launched in 2013 after the G8 Social Impact Investment Forum in London, to “catalyse the development of the global social impact investment market”. It will publish a report in September with recommendations on how this target can be achieved.

Cohen added in the interview, “If governments begin to look at the issue of fiduciary duty that would make it easier too. The question that needs looking into is can the trustees of a foundation invest in things that may not maximise financial return but would achieve social returns consistently.

“Trustees are prepared to go in that direction but they’re very concerned that they’re going beyond the remit that legislation gives them”.

In June last year, David Cameron said that impact investment could be a “great force for social change on the planet” and would help “build bigger and stronger societies”.

A survey by ethical bank Triodos also found that nearly 3 million investors would be considering social investment over the following year.

Photo: Eastop via stock.xchng

Further reading:

Triodos survey says 3m may consider social investment in next year

Impact investment ‘developing rapidly’, says UKSIF report

Cameron: ‘social investment can be a great force for social change on the planet’

Impact investment to grow by $1bn in 2013

The Guide to Sustainable Investment 2013