What Color is Your Money?

It seems that these dire economic times are stirring up some fears of the future in some of our banking institutions. A green bank movement is beginning to emerge that will have its foundation resting solidly on the concept of a "triple bottom line" approach to finance: enterprise, environment and social equity. Wow, imagine how great things could be if capitalism began to calculate costs using a long-term approach! Here are some excerpts from a NY Times article discussing a recent approach to green banking:

'Green' banks sprout from ruins of economic crisis

The group (e3bank) announced today that the Pennsylvania Department of Banking has awarded e3bank conditional approval for a state charter for its flagship bank in the Philadelphia area. Once given full approval by the state and the Federal Deposit Insurance Corp., the new bank will open as a "green" triple bottom line bank, organizers said. It is already seeking investors and is raising money online.

E3bank joins a small but growing number of green banking centers sprouting as credit markets normalize. Just as the government is stepping in with the fiscal stimulus package with provisions designed to encourage consumers and businesses to go green, the banking industry is launching green incentives of its own.

The model that e3bank is pursuing envisions having loan officers accredited by the U.S. Green Building Council, or USGBC, as experts in its Leadership in Energy and Environmental Design (LEED) ratings program. Loan officers would be empowered to customize loans and lines of credit to commercial and residential borrowers planning green building projects and retrofits.

Instead of following the industry standard -- basing loans on a borrower's ability to pay and the up-front costs of the building -- e3bank officers will be authorized to modify debt-to-income and loan-to-value proposals. Financial products would be tailored to account for the up-front costs of more expensive green projects but also factor in cost savings from lower energy consumption that would be netted over the course of the loan.

Baldassarre said the bank would also be more flexible in extending loans for solar installations, geothermal heating and other technologies on existing buildings, knowing that the cost savings the extra energy would bring in affects the borrowers' ability to repay the loan. Loan officers at e3bank could also advise customers on the latest green building innovations and the various options that people with projects in mind could consider.

A long time participant in socially and environmentally responsible banking, South Shore Bank, also has its own envelope pushing intitiatives:

ShoreBank's green bank spin-off, ShoreBank Pacific, was established with the goal of "creating a conservation economy in the rainforest of the Pacific Northwest." It lends to local companies in Washington and Oregon in ways designed to encourage them to use less energy and lumber and reduce waste production and pollution.

ShoreBank's depositors are invited to support their green initiatives directly by putting their money into "EcoDeposits." The company also offers "environmental advisory services" to customers in the coastal Pacific Northwest, Michigan's Upper Peninsula, and urban centers where it conducts business.

Let's hope (and participate in) these types of ventures meet with enough success to force the financial dinosaurs into becoming active and willing participants in building and caring for today and tomorrow.

Check out the entire article at: http://www.nytimes.com/gwire

Here are some additional links to information about green banking initiatives:

www.treehugger.com

Christian Science Monitor

Triple Bottom Line