Building Back Better – but also with impact

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The progressive mantra #buildbackbetter is seductive but essentially meaningless.  The much-missed Guardian columnist, Simon Hoggart, used to apply a simple test to any political slogan: could anyone actually be in favour of the opposite, in this case #buildbackworse?  Well-meaning though I’m sure its proponents are, without agreement as to what ‘better’ looks like or any means for assessing ‘better’, it is wholly vacuous.

In contrast, Sir Ronald Cohen (Ronnie) is all substance, having built his career on quantifiable success: no smoke and mirrors here.  

Described by the Sunday Times as the “father of British venture capital”, Cohen was born in Egypt to wealthy parents immediately after the war, but his family was forced to flee to England after the Suez crisis.

Despite arriving practically penniless and speaking only a few words of English, Cohen excelled at school, gaining a place at Oxford, before winning a scholarship to Harvard Business School.  In 1972, he set up Apax partners with a couple of school friends, one of the UK’s first venture capital firms. The company grew slowly at first, but then expanded rapidly in the 1990s providing capital for over 500 companies, including AOL, Virgin Radio, Waterstone’s and PPL Therapeutics, the company that cloned Dolly the sheep. 

In 2000, he became chairman of the government’s Social Investment Task Force (SITF) and eleven years later established the UK’s first social investment bank, Big Society Capital, which proved rather more successful than Cameron’s political initiative of the same name.

So Cohen is a numbers man, and when he talks about changing how profit is measured to take account of social impact, it is worth listening. His new book, IMPACT: Reshaping Capitalism to Drive Real Change, does just that.  In it, he explains that Sasol and Solvay, two chemical companies with annual sales of around $12bn each, cause $17bn and $4bn worth of environmental damage a year respectively. 

He makes similar points about Intel’s relative lack of diverse employment practices which costs, he estimates, $2.5bn per annum – while arguing that taking proper account of the negative impacts of companies’ products would, in some sectors, make as many as one in five unprofitable.   

His numbers are drawn from the Harvard Business School’s Impact-Weighted Accounts Initiative, which Cohen himself chairs and which is led by Professor George Serafeim.  Understandably, Cohen argues that the failure to take account of impacts such as these results in all kinds of market distortions and calls for governments to require companies to publish impact-weighted accounts within two years.   

While you may argue with his timeframe, the initiative seems to be of the type capable of lending real substance to the fluffy desire to build back better.  Indeed, I argue, it is an essential tool in determining which public and private investments provide the potential to draw some benefit from the covid-inspired economic crisis, and so drive real change.

It is time to listen.

Radix’s Centre for Business, Politics and Society is hosting a discussion with Ronnie Cohen this evening at 4pm BST chaired by Radix fellow and leading economist, Magda Polan.  To register for the event go to

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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