David Press, CEO & co-founder of Confluence Partners, joined me on a recent episode of The Impact to discuss how Confluence Partners is working at the nexus of finance, impact and philanthropy.
Jeff Gitterman: Impact is kind of being thrown for a loop right now, and people are kind of scrambling and trying to understand this new environment that we find ourselves in and how to move forward. Talk to me about the stress that a lot of people are feeling, and then how are you responding and guiding your clients during this time?
David Press: We work with a lot of asset managers kind of across the capital stack, some philanthropic organizations, some enterprises big and small. And I think what’s unique to the impact investing space is its complexity.
And to operate successfully in it, I think you really need to understand all the financial implications. You need to understand the impact space, and you even need to understand the philanthropic space for sure, even if you’re a market-returns-seeking enterprise. And I think investors have struggled for a long time to understand it.
When you’re a lawyer, what you’re really asked to do is to assess risk, and you learn a skill of reducing complex things to their essence. And essentially, that’s what we do with all of these companies: figure out how to talk about what they’re doing in a way that’s going to get connectivity.
With people. now, there is a dimension here that is particularly fraught for sure, and we are spending a lot of time with clients and not clients just help. My mission, especially in this moment, is to help our sector survive and to thrive and exit on the other side successfully. We’re spending a lot of time helping companies and funds figure out where there are zones of safety for them to operate in.
JG:. Now, you’re not advising people to stop focusing on sustainable strategies, though. You’re just asking them to learn how to articulate the desperate return thesis behind sustainable. And look at a time where grant money is drying up faster than you can say spaghetti.
DP: It’s hard to find silver linings at this moment, but I do think we will be well-served to remember the investment side of impact investing. And I think that investors would be well-served to remember the fundamentals of investing.
What we’re seeing right now is that the pushback is getting pushback interest there. And just last week, the FT was reporting that there are these big pension funds in Europe that are pushing back on asset managers who have retreated or at least are vocalizing their intent to retreat from climate commitments.
Why are these pension funds pushing back? Because even though the rhetoric and the political environment has changed, climate risk hasn’t changed. And if you’re an investor, you need to know how the companies you’re investing in, whether they’re at risk and how they’re going to assess that risk. And I think what has changed is that all of a sudden, how you talk about what you do really matters.
Watch the full interview with David Press
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