05/23/2014 02:09 pm ET Updated Jul 23, 2014

Searching for Meaning in Paris

"Paris is the capital of revolutions, so it's highly appropriate we're here today in the midst of new revolution: a revolution in how we deal with social issues," said Sir Ronald Cohen, speaking at the "Impact Squared" event this week hosted by Anne Hidalgo, the Mayor of Paris, and Le Comptoir de l'Innovation, an international network of social enterprise incubators headquartered in France. I always enjoy Sir Ronald's brilliant commentary, and even speaking in French he did not disappoint. For those who are not familiar with him, he co-founded Apax Partners 40 years ago and is widely considered the "grandfather of venture capital" in the U.K.

For the past fifteen years Sir Ronald has been championing social finance (also known as impact investing) in the U.K. and abroad. He is the Chairman of Big Society Capital, the world's first ever social investment wholesale bank now investing £600 million into the U.K. market, as well as the Chair of the International Taskforce on Social Impact Investing, a high-level task force of business and government leaders from G8 countries. So when he speaks, people listen. And the parallels he sees between the venture capital industry 30 years ago and the nascent field of impact investing today bear repeating here.

"When I created Apax, job creation and innovation came from entrepreneurs who built start-ups that went on to disrupt established players," he said.

IBM was overtaken by Apple. Today, we can track social outcomes and compensate investors and service providers through measurable government savings. This means we can hand the keys of venture capital to social sector organizations that can innovate and deliver results. We now have the possibility of turning impact investing into a very important tool to solve social challenges.

And listening we were. Nearly 1,500 delegates from 50 countries crowded into City Hall, a living demonstration of Sir Ronald's assertion that "this has now become a worldwide movement." As the evening's discussions unfolded, I was particularly struck by two themes. The first is the dizzying pace of supportive initiatives launched by governments and corporates alike. Sir Ronald talked about the tax breaks for impact investors announced in April by the Chancellor of the Exchequer. Parisian Mayor Anne Hidalgo spoke passionately about her ambition of turning Paris into the world capital of social entrepreneurship. "We need your ideas and we are here to support you!" she said.

Danone CEO Franck Riboud described with pride how two-thirds of Danone's employees (a 100,000 person workforce!) invested some of their shares in the company's social investment fund, Danone Communities, while Philippe Gravier, the CEO of AVIVA Vie, announced a 10 million euro equity fund to invest in early stage social enterprises. "We're making a social commitment, but it's also a financial decision," he explained. "These investments will be on a 6-7 year timeframe and we hope to receive a 3-4 percent return." Perhaps most tellingly, Wayne Silby, Founding Chair of the Calvert Funds, framed the proliferation of impact investing funds in the U.S. -- Goldman Sachs and the U.S. Venture Capital Association are two of the more recent additions to the ever-growing list -- in competitive terms. "Ten years ago you had to be courageous to talk about this," he said. "But all of a sudden impact funds have become a "must have" if you want to attract the best talent in the industry and give clients what they want."

The second, far more revelatory chord that struck me -- that thunderstruck me, in fact -- was the forceful rejection of our existing models as deeply, badly broken. Over and over, panellists spoke about the need to bring values and meaning back into our monetary and governance systems if we hope to create a prosperous world in the truest sense of the word. "As an investor, I recognize that the traditional model has increased the divide between rich and poor," said Sir Ronald Cohen. "'Fairness' and 'equality' are empty words today. If you are born in a poor family, it's almost impossible to catch up. This creates societal risks that are simply unacceptable."

In response to the frequent refrain that the younger generation is driving much of this change in their quest for meaningful careers, Franck Riboud responded, "Young people want to find meaning in their lives, yes, but that is not just for the young. All of us need to find meaning. I asked myself, "What could Danone do?" We have the power. We can make changes. We should share what we have."

"Money chasing money is not going to get us where we want to go," said Wayne Silby, reflecting on the impetus behind creating the $400 million Calvert Foundation over two decades ago. "As fiduciaries, we're starting to think systematically about the societies we are creating. We are asking ourselves, 'Are wealthy people acting as trustees for the greater good? Are we creating a world we are proud to live in?'"

Never one to mince words, the formidable Mohammad Yunus (a personal hero I am honoured to work with in his capacity as a board member of the Schwab Foundation) responded unequivocally. "Today, the richest 85 people on the planet own more wealth than the bottom 50 percent of humanity. That is not the world we want to live in. The idea that 'the business of business is making money' sounds like a sucking machine: If you have money, you get more money, and the people at the bottom get sucked dry. People everywhere are rejecting this idea. In the 21st century, we must say goodbye to a world that creates unemployment and poverty."

Madame Mayor, thank you for your hospitality and your leadership. Judging by the business leaders and the inspiring French social entrepreneurs I spoke with throughout the event, you are in very good company. Let's see how fast Paris and other world capitals can spur a race to the top.