Will my bank save the world?
I've been waiting for weeks for the letter. Though their processing may not be as standardised and super-efficient as big institutions, I think the company's idea is a really cool one. And that's why I waited, day after day. And then, one saturday morning, I looked into the mailbox and: Voila!
GLS Bank
Today it finally arrived! "Dear Mr. Adria, as per request we have opened your internet banking account..." and so on. What I'm talking about is that I finally have my GLS Bank account. The bank was founded about 30 years ago and was the first german bank to have an ethical philosophy as their driving force. GLS is an abbreviation for (translated) Community Bank for Loans and Gifts.
What's so special about them is that all the money I have in my account will only be loaned for purposes that they have deemed loan-worthy (such as renewable energy, organic farming, health, social causes). Even better, they choose about 10 areas they will invest in, and I can choose specifically in which of these 10 areas my money will be put in. I chose renewable energy. So, by law, for every 1 EUR I have in my bank account, they can loan 12,5 EUR for a renewable energy project - isn't that great?! There's a second bank like this in Germany, the Umweltbank (Environmental Bank) and I think UK's Cooperative Bank has a similar idea behind it. I don't know which other countries have banks like this, but if you do, write to me!
Big Finance catching up on sustainability issues
Of course big finance institutions don't want to get left behind, CitiGroup wants to direct 50 billion USD in the next 10 years towards fighting climate change and HSBC goes carbon-neutral. Financial Times has even set up a Sustainable Banking Award and many banks want to get on this list.
The Dilemma: 50 billion USD or 100%?
My dilemma now lies in whether I should stay with CitiBank, who are willing to finance huge sums to projects against climate change or whether I should move to the bank that will invest ALL its money into sustainability-related projects (environmental, social, cultural, community)?
This is similar to the investing dilemma of best-in-class approach (where I invest in the most sustainable companies in ANY sector, even oil) vs. a sector-only approach (where I only invest in a certain sector, say, environmental technologies).
For now I will have money in both accounts, but I can see in the future that I will change completely to the GLS Bank.
Why we still need a CitiGroup
In the end, we will still need the CitiGroups of the world. It's the big ones that can move the markets, the small ones often give the impulses and the ideas. It's quite improbable that a small bank will grow so fast just through their environmental action. It's improbable that the small sustainable local store chain will be bigger than "big bad" Wal-Mart, and I don't think they want to. But it is probable that Wal-Mart will move towards a more environmentally friendly direction. And this is what we need: The big movers moving in the right direction.
But at the moment it's often mini-steps they're taking. CitiGroup, with profits at 21,5 billion USD in 2006 and assets close to 1,9 trillion (that's one thousand nine hundred billion!) it makes the sum of 50 billion USD in financing seem quite small now. So until they make bigger steps, I will move my money to my new environmentally friendly bank.
GLS Bank
Today it finally arrived! "Dear Mr. Adria, as per request we have opened your internet banking account..." and so on. What I'm talking about is that I finally have my GLS Bank account. The bank was founded about 30 years ago and was the first german bank to have an ethical philosophy as their driving force. GLS is an abbreviation for (translated) Community Bank for Loans and Gifts.
What's so special about them is that all the money I have in my account will only be loaned for purposes that they have deemed loan-worthy (such as renewable energy, organic farming, health, social causes). Even better, they choose about 10 areas they will invest in, and I can choose specifically in which of these 10 areas my money will be put in. I chose renewable energy. So, by law, for every 1 EUR I have in my bank account, they can loan 12,5 EUR for a renewable energy project - isn't that great?! There's a second bank like this in Germany, the Umweltbank (Environmental Bank) and I think UK's Cooperative Bank has a similar idea behind it. I don't know which other countries have banks like this, but if you do, write to me!
Big Finance catching up on sustainability issues
Of course big finance institutions don't want to get left behind, CitiGroup wants to direct 50 billion USD in the next 10 years towards fighting climate change and HSBC goes carbon-neutral. Financial Times has even set up a Sustainable Banking Award and many banks want to get on this list.
The Dilemma: 50 billion USD or 100%?
My dilemma now lies in whether I should stay with CitiBank, who are willing to finance huge sums to projects against climate change or whether I should move to the bank that will invest ALL its money into sustainability-related projects (environmental, social, cultural, community)?
This is similar to the investing dilemma of best-in-class approach (where I invest in the most sustainable companies in ANY sector, even oil) vs. a sector-only approach (where I only invest in a certain sector, say, environmental technologies).
For now I will have money in both accounts, but I can see in the future that I will change completely to the GLS Bank.
Why we still need a CitiGroup
In the end, we will still need the CitiGroups of the world. It's the big ones that can move the markets, the small ones often give the impulses and the ideas. It's quite improbable that a small bank will grow so fast just through their environmental action. It's improbable that the small sustainable local store chain will be bigger than "big bad" Wal-Mart, and I don't think they want to. But it is probable that Wal-Mart will move towards a more environmentally friendly direction. And this is what we need: The big movers moving in the right direction.
But at the moment it's often mini-steps they're taking. CitiGroup, with profits at 21,5 billion USD in 2006 and assets close to 1,9 trillion (that's one thousand nine hundred billion!) it makes the sum of 50 billion USD in financing seem quite small now. So until they make bigger steps, I will move my money to my new environmentally friendly bank.
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