Ronald Cohen: Driving Change with Impact Investing | SALT Talks #246

TL;DR

Sir Ronald Cohen discusses concrete steps for measuring and implementing social and environmental friendly investing.

Transcript

hello everyone and welcome back to salt talks my name is john darcy i'm the managing director of salt which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy salt talks are a digital interview series that we started in 2020 with leading investors creators and thinkers our goal o... Read More

Key Insights

• 💐 The financial markets are experiencing a significant flow of ESG capital, driven by changing consumer and talent preferences.
• 😌 The link between government and the private markets in driving impact investing lies in impact transparency and the publication of impact-rated financial accounts.
• 💤 Millennials and Gen Z will have a significant influence on capital allocation, prioritizing investments that deliver profit and positive impact.
• 🪛 Technology and innovation are essential in addressing climate change and driving impact across various sectors.
• ☸️ Impact transparency provides the means to measure both environmental and social impacts, enabling investors to distinguish between companies minimizing harm and those bringing solutions.
• 🌐 The COVID-19 pandemic has highlighted the need for global solidarity and enhanced the attraction of impact investing.
• 👻 Governments should provide impact transparency as a human right, allowing individuals and investors to access information on the impacts created by companies.

Questions & Answers

Q: How can the financial markets tap into innovation to drive social change?

The financial capital markets are already experiencing a flow of ESG capital, which is equivalent to half or more of all professionally managed assets in the world. This flow of capital is driven by changing consumer and talent preferences, putting pressure on governments to bring transparency to investment impacts.

Q: What is impact transparency, and how does it relate to impact investing?

Impact transparency involves measuring the social and environmental impacts of companies in the same way as financial measures. By publishing impact-rated financial accounts, investors can distinguish between companies that minimize harm and ones that bring solutions to problems. This transparency will drive capital allocation towards companies delivering both profit and positive impact.

Q: How will millennials and Gen Z drive change and impact investing?

Millennials and Gen Z represent a significant portion of the workforce and hold values that prioritize both profit and positive impact. They have influenced consumer preferences and will soon inherit large amounts of wealth. Their values will influence investment markets, driving capital towards companies that align with their values.

Q: How will technology and innovation address climate change and drive impact?

Technological innovation, such as clean fuel technologies and carbon absorption technologies, is accelerating. Pressure from investors and the market is driving incumbents to shift their business models towards sustainable practices. Just as Tesla disrupted the automobile industry, technological advancements will revolutionize various sectors and deliver impact through profit.

Summary & Key Takeaways

• ESG investing is a significant idea in the investment management world, and Sir Ronald Cohen provides concrete steps for measuring and implementing it.

• The financial capital markets are already experiencing a flow of environmental, social, and governance capital, driven by changing consumer and talent preferences.

• Impact transparency, through the publication of impact-rated financial accounts, will drive investors to allocate capital to companies that deliver both profits and positive impact.