The Aspectus Bookshelf: Impact by Sir Ronald Cohen

By Chris Bowman,  Strategy and Content Director at Aspectus Group

When we started pitching the concept of impact investing as an agency, way back when in 2013, it carried a whiff of the vaguely lefty and luvvie and hippyish. Journalists were sceptical, investors were sceptical, the audience was sceptical.

Oh, how things have changed. Now, a book like Impact by Sir Ronald Cohen makes it onto lists of 2020’s top economics books – including that of venerable FT commentator Martin Wolf CBE. Note the titles there – a knighthood for Cohen, a CBE for Wolf – it seems that impact has infiltrated the Establishment™ or, as Cohen argues, “is an idea whose time has come”.

So, what about the book? It’s a solid introduction to the topic of impact investing for newcomers, running through its definition and history with illustrative examples in the early chapters. The telling understandably holds a slightly British skew given the author.

Said author devotes a chapter to the scale and momentum of the impact movement which brought an odd but gratifying sensation of seeing a report referenced that you and your colleagues helped pitch and promote (the GIIN’s 2019 Sizing the Impact Investing Market). The following chapters run through Cohen’s vision for embedding impact in business, philanthropy and government respectively.

In fact, Cohen is clearly an ardent believer in the power of impact, not just in investment but in reshaping the entire global economy head to toe. He envisages every economic decision, whether made by an investor, a government or a regular citizen, will be made with both profit and impact in mind. After all, the book’s subtitle is: “reshaping capitalism to drive real change.”

This is a lofty goal, and Cohen confidently pronounces impact capitalism as the next grand sweep of economic history following on from Rousseau then Smith, Keynes and Friedman. What’s more, he is confident this will be welcomed across both the left and right of the political spectrum.

Is that the case though? It’s in these latter chapters that the book is the most engaging yet arguably less convincing. I can’t imagine the more libertarian end of the right welcoming impact/ethical limitations on their investment choices. Nor do I think the left will be content to leave the so much of the cash and decision-making power in the hands of the wealthy (i.e. where the investment capital is) rather than through redistributive taxation a la Rutger Bregman. Welcomed by the centre perhaps, but if the phenomena of Trump, Bolsanaro et al. has taught us anything in recent years, it’s that the centre may not hold.

Ultimately this is my bugbear with the book. I am a believer in impact investment, and at Aspectus we’re passionate about our work in the space. It’s undoubtedly a powerful tool, but is it a panacea?

From a comms perspective, the biggest reputational challenge for the sector remains scepticism and credibility. At first, it was doubt about the concept itself, now it is more to do with ‘greenwashing’, ‘impact washing’ and questionable sincerity. I worry about the effect that big claims such as these might have with the sober-minded economic and financial audience that impact investing must still win over. Will it stretch their ambition, or their credulity?

Cohen’s vision is a world where we “overthrow the dictatorship of profit,” and he is adamant that we “cannot solve our social and environmental challenges by merely tinkering with our existing system”. Yet ultimately, isn’t that what impact capitalism is? This isn’t a revolution, it’s an evolution – a modification of the existing capitalist system to ensure its survival over radical alternatives. Profit isn’t overthrown, just joined at the top-table and tempered by basic concern for people and the environment (which in turn means more profit down the line).

This book convincingly argues the position that impact investing is an incredibly powerful tool for change; even a vital one. But in my opinion, grander claims than that (at this stage) risk denting the hard-won credibility the sector has built over the last few years.

That’s a comms issue: a balance needs to be struck between aspiration and validation. Tilt the scales too far in either direction and you risk stunting momentum or authority. Really, it boils down to skilled storytelling.

I, along with my colleagues, take pride in having contributed to telling that story in the past, and look forward to helping visionary investors add their voices to subsequent chapters. If you’re looking to work with an agency with a heritage, passion and critical eye for impact, why not get in touch?