The start of a new year is all about hope: a chance to take stock of what’s working and reflect on how things could improve. One of the things that could use improvement, front of mind for me right now, as I confront the reams of discarded packaging from another season of frantic, last-minute gift deliveries, is capitalism. It is an economic system that has lifted a billion people out of poverty worldwide over the past few decades, but its drawbacks – for the environment, for inequality and for societies forced to bear its unintended consequences – are both too well known and too numerous to list.
Also too numerous to list are the people who rage that the system is so broken there is nothing to be done but to smash it. Is there a way to mitigate these negative externalities without tearing everything down? I recently met someone who believes there might be. Ronald Cohen is a venture capitalist and philanthropist, and is often described as “the father of impact investment”: investments made with the aim of delivering measurable positive change, rather than financial returns alone.
Cohen was among the pioneers of translating this approach into UK policymaking as far back as 2010, in the form of social impact bonds. Rather than contracting private companies to deliver services – rehabilitation for ex-offenders, for example – the government sets the outcomes it wants, such as reducing reoffending, and offers a fixed payment if those outcomes are achieved. Venture capitalists then invest in projects they believe can earn a return. The Treasury only pays out if the target is met. A decade and a half later, in November, the government launched the Office for Impact Economy in the hope of using this approach to tackle major social challenges.
But choosing to focus on measuring impact has implications that go beyond policymaking. Cohen has just published an updated edition of his 2020 book Impact: Reshaping Capitalism to Drive Real Change, about how the global economic system can be rethought by factoring in impact when looking at risk and return. One of the key ideas is impact accounting, which, in the words of the International Foundation for Valuing Impacts, an organisation Cohen chairs, “allows corporates and investors to translate their social and environmental impacts into the language of currency, making information about impact accessible, actionable and comparable to financial performance”. Put more plainly, it is a system akin to financial accounting, but one that measures the environmental and social impacts a company may be responsible for and assigns them a monetary value, enabling investors and governments to make meaningful comparisons.
When I met Cohen, he said he hopes this could prove a gamechanger for consumers as well as policymakers. I am less sure about his optimism regarding human nature. We all know about Amazon’s record on environmental impact and the treatment of its workers, yet that does not stop most of us clicking “next-day delivery”, something I am all too aware of after Christmas. It is simply too cheap and too convenient – or rather the costs and inconvenience are hidden. Would attaching a monetary value to those invisible costs change our behaviour? Perhaps; perhaps not. Regardless, making such information freely available would help regulators – not least those drafting tax policy – to focus their efforts more effectively. It would also encourage companies to keep a closer eye on their externalities if they knew they were being watched.
All of which is to say my 2026 resolution is to make that extra effort to buy from retailers I think I can trust. But I’m also thinking about politics for the year ahead. Populism thrives when people think something is broken, when the status quo doesn’t feel like it’s working for ordinary people and when exploitation equals profit. Finding ways to measure and price impact isn’t just about saving capitalism – it’s about saving politics as we know it.
[Further reading: The fascinating subculture of cryptic crosswords]
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This article appears in the 14 Jan 2026 issue of the New Statesman, Battle for power
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