Breaking Down Eco-Friendly Banking
For most of us, green is the color of money. But in business, going “green” means something a little different: shifting from products and services potentially harmful to the environment to using sustainable materials and/or production processes that reduce or eliminate potentially negative impact on the planet. For many businesses, however, going green is much easier said than done. Consumers are now starting to look far more frequently for environmentally conscious products and brands.
Banks have always been in the business of managing green. Now, however, consumers (just like you) are demanding that banks not only tend to our green, but become green themselves as well. Financial institutions are just starting to appreciate and understand the growing importance of transforming themselves into eco-friendly banking entities.
So, what defines an eco-friendly bank? While certainly a timely phrase, even a little catchy, the key question is whether or not a bank that claims to be eco-friendly really engages in conduct environmentally responsible enough to be considered ‘green’. If you base some or all of your purchasing decisions on the environmental policies of an organization, what do you need to know when evaluating so-called eco-friendly banks?
Well, let’s start by looking at what we mean when we say “eco-friendly banks”. For starters, there is no concrete definition and no hard or fast rule that determines what constitutes a ‘green’ bank. Factors that determine whether a bank should be considered eco-friendly, while somewhat varied, do share a critical underlying theme: Social and environmental responsibility.
So how do banks exhibit such responsibility? At first glance, it might appear that the ability of banks to influence positive change for the environment is somewhat limited. After all, they’re simply banks; they don’t produce much in the way of tangible products, neither manufacturing nor distributing goods. Some would argue that this limits what environmentallyyou can expect from your bank. And they would be wrong.
Banks may not build anything per se. Without banks providing the money, however, most of the time, nothing gets built. No matter where the money may have come from initially, a bank is usually involved in the distribution of capital necessary for companies to build factories, to manufacture and transport goods to market and provide support for those products. From service industries to the capital-intensive concerns that include automotive, industrial and construction industries, commerce requires the involvement of banks to some degree or another.
If we presume (and we’ll get back to this) that the day-to-day operation of a bank does not have a significant impact on the environment, the banking industry as a whole certainly does.
Some questions regarding eco-friendly banking activities might include:
- Does a bank make socially responsible loans?
- Do those loans support sustainable production and distribution practices?
- How do banks screen their applicants for environmental consciousness, if at all?
- Are loan recipients a part of the solution or part of the problem of climate change, for example?
Eco-friendly banks also fund eco-friendly industries such as alternative energy, local agri-business (minimizing energy and other costs associated with transporting goods to market), local fishing industry and local merchants.
And, contrary to our earlier presumption, eco-friendly banks can effectuate positive environmental change in their daily operations, with some being simple and immediate and others requiring significant advanced planning. With respect to the former, things such as lighting and insulation can be modernized fairly quickly. Insulation, window treatments, and thermostat controlled building interiors are all effective tools for reducing energy consumption.
Consumers can inquire as to the bank’s policies regarding the construction of its own properties. More and more banks are making their buildings eco-friendly by following the U.S. Green Building Council standards which include such criteria as rooftop solar energy panels, steel structures made from recycled metals and carpeting made from fully recycled materials. In the alternative, check to see which of the banks you are considering adhere to the building standards called LEED (Leadership in Energy and Environmental Design).
One additional area where a bank can impact the environment on a day-to-day basis is by reducing the amount of travel it requires of its employees. Banks that let their employees work remotely from home also helps to reduce energy consumption and pollution. So do those who offer their workers incentives for taking public transportation or purchasing more fuel-efficient vehicles such as hybrids or electric cars.
Eco-friendly banks can also establish their green bona fides in the form of the banking products or services they sell. Online banking, for example, reduces paper consumption, requires no driving, results in less mail and uses fewer branch resources.
Some banks are providing ‘green’ mortgages at better interest rates for the purchase of energy efficient homes or for making a home more eco-friendly. ‘Green’ affinity credit cards are becoming an increasingly popular product, allowing customers the ability to contribute to environmental organizations and socially responsible causes while making their purchases. Many of these cards also have incentives such as cash back rewards that are comparable to many of the big banks rewards programs.
The following 10 banks are considered among the best of those that have integrated sound environmentally friendly policies into their business practices effectively:
- ING Direct (ingdirect.com)
- New Resource Bank (newresourcebank.com)
- Green Choice Bank (greenchoicebank.com)
- One Pacific Coast Bank (onepacificcoastbank.com)
- Permaculture Credit Union (pcuonline.org)
- Rabobank (rabobankamerica.com)
- Citizens Bank (citizensbank.com)
- PNC (pnc.com)
- HSBC (us.hsbc.com)
- TD Bank (tdbank.com)
There are, of course, others. What all eco-friendly banks have in common is their focus on policies that are earth friendly and socially responsible and many of these banks are having far more of a social and environmental impact than most consumers realize.
This is a guest contribution from Bill Hazelton, CEO of Credit Card Assist where he provides tips, news, advice and recommendations on all things credit card-related. Find him on Twitter, Facebook and Google+.