David set up Path, a B Corp, after a period of deep self-reflection about our destruction of the environment. Shocked by the unprecedented climate and ecological emergency and the disastrous path towards extinction we face, he realised that a huge impact could be made by revolutionising the investment model so that savings are solely invested for good.
He left a well-known firm of financial advisers and founded Path in 2019 to forge this new, radical path forward to fight the climate crisis.
I recently talked to David about Path Financial, what he sees as essential qualities of a B Corp leader, and how he has led his business through difficult times.
David told me: “We tend to find the people find money to represent three things; complex, boring and worrying. Typically there’s anxiety around money, which is either: ‘I haven’t got enough’, or in other cases ‘I’ve got too much and I’m worried about losing it’.
So I help guide them towards getting money into the right place so that it can serve them at some point in the future, putting it into sensible pots, such as pensions and ISAs. You can really help people see where they stand so that they don’t spend the next 5 years working their way towards a heart attack when actually they could be downing tools and going off and doing what they want.
But the unique thing about what we do is when we’re putting money into these pots, which are like a black box for most people, is that we have a conversation about what’s in those black boxes. Beyond knowing the name of the fund, and possibly the fund manager, most people have no idea what companies these funds invest in.
Often they’re investing in a whole list of things that are seriously negative for the customers of the companies or of the planet or both.
When I realised what was happening, (years ago) I did a deep analysis of my own personal values and the ways I was spending my days. I had an epiphany. I realised I was in control of investing tens of millions that were encouraging the worst behaviours in things that are negative for people on the planet.
There were no financial advisers at that time who specialized in this “positive impact model”. So uniquely, I decided that this was an opportunity not only help serve a market but also to set up a business. Path Financial was therefore set up to only invest client money in funds which were in some way positive for people and planet, excluding everything that’s bad, and where possible point the money to solutions rather than problems, such as health care, renewable energy and so on.
While most people would think about not eating something like avocados or driving an electric car would help with climate change, they don’t think about doing their pension.
But the research that we see says that moving a lifetime’s pension savings has up to 20 times more impact than everything else that you can do.”
Could you tell me about any challenges that your business has faced since you started in 2019 and how you led the business through that?
“When we set the business up, I wanted it to have as low a carbon footprint as possible so that we were aligning our actions with our principles. So we had all sorts of tools that nobody had ever heard of, such as Zoom! We really started onboarding our first customer as the first lockdown came in. What a time to launch! The pandemic seemed like the biggest problem to hit the economy for a decade.
Bizarrely, instead of being a challenge to us it was a massive opportunity because the whole industry pivoted instantly to Zoom while we were already there.
A problem for many others became an opportunity because we were set up to have a minimal carbon footprint which gave us a slingshot boost into being able to grow very quickly.
The biggest worry when we started was ‘Is there a client audience out there for us?’, because we were telling people we’re going to do this thing with positive impact investment and they thought that would mean worse investment returns which no-one would tolerate. The assumption is that if you take a step away from the ruthless capitalist model towards something which looks like doing some good, that there would be some inevitable loss.
In the first year our investment performance was monumentally better than the regular traditional investment. Looking to the future of traditional “dinosaur” investments surely it’s inconceivable that we’ll still be digging stuff up in 20 years time and burning it when renewable energy is at a tipping point.”
What would you say are the essential qualities to have as a leader in a B Corp?
“For me, it’s where purpose and passion come together, that’s where change can be instigated. Certainly for me, what’s worked for me as a B Corp is having that purpose and passion multiplied because we’re very clear about what we want to do and how we’re going to do it. And it fits largely within the ethical and moral guidelines of B Corp and we’ve got the energy to see it through because we really believe in what we’re doing.
Where that passion and purpose come together it just becomes a magnet for the type of customers that you want to attract and the type of staff that you want to attract and there’s a shared ethos.
People put in the extra yards if something needs to be done.”
And does that shared purpose and passion motivate others?
“I think so, it really does give some camaraderie and support, and fulfilment I think. I think a lot of people try to get through unfulfilling lives in pursuit of happiness which I see a futile goal. I think happiness is to be found through having some purpose and striving towards that purpose. I think it’s phenomenally important at an existential level.”
And finally, what is your advice to a junior leader working in a B Corp?
“I think it’s useful to just look at the main pillars of what it takes to become a B Corp and to maintain that status. And maybe to strive to be for the Best in the World top 5% and then to check whether their daily activities are aligned to that because I think they’re a good yardstick for what makes a decent business tick.
I’m constantly working to make sure that I’ve got diversity in my team, or listening to a different point of view, or buying up-cycled furniture or whatever it might be.
To reflect on purpose and why you’re in there in the first place helps to re-energise yourself and that elevates your activity from just being another manager.
I think you become a better leader because you’re enthusiastic and purposeful, and you can’t fail. You’ll bring people with you if you’ve got those qualities. So you’re bound to elevate yourself if you’re showing that type of leadership.”
The Path received the B Corp Best in the World for Customers Award in 2022. To find out more about the services they offer click here.
Lucy Chaplin is a Leadership Coach who helps B Corps unleash full leadership potential. She works with new leaders and managers to build performance and lead with confidence, giving them all the tools they need to amplify their impact. Her bespoke IMPACT model guiders new team leaders through the six stages of effective management. You can find out more here or book a free discovery call here.
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