Governments have “a major role” to play in the development of impact investing, said Ronald Cohen, chair of the Global Steering Group for Impact Investment, in a recent video.
Cohen – a driving force in the impact space for nearly two decades – points to the past role of governments in helping incentivise and accelerate investment in venture capital. “It introduced regulation in 1978 that encouraged pension funds to invest in venture capital. This led to an immediate 10-fold increase in the size of venture capital funds.”
He says similar regulatory and tax incentives are needed today to help scale and develop the impact investment world.
“Governments need to be bold with their regulation and with the incentives that they provide through taxation. Tax breaks need to be very clearly and immediately attractive to investors… we can’t hedge them in with caps and so forth.”
Cohen is a co-founder director of Social Finance and founding chair of Bridges Fund Management and Big Society Capital.