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In the green frenzy of the mid-2000's, every major bank from CitiGroup to HSBC was claiming to offer a "green banking" option for their customers, capitalizing upon the growing public sentiment for the environment. Alas, these offers generally amounted to little more than a green-enshrouded marketing campaign for a product that the big banks already had -- paperless banking. And it worked.
According to a recent study by Javelin Strategy and Research, bank customers loved this idea. 43% of customers polled said they would rather do business with a bank that seems more "green." It's true that monthly paper statements have a big impact. If every household in the US were able to switch to paperless billing, this would save an estimated 16.5 million trees per year or about 46,000 acres (there are about 360 trees per acre). Trees protect watersheds, support wildlife habitats, and build soil fertility while sequestering carbon (deforestation is now the 2nd leading cause of global warming).
But there’s a problem here.
While we can all agree that preventing deforestation by encouraging paperless billing is great for the environment, the implication that by doing so, a bank is obviated from its environmental responsibility and can now call itself “green” strains credibility. What does it matter if you save a few thousand trees in North America while funding dirty coal operations like CitiBank or deforestation in the Congo like HSBC.
True “green banking” is about WHERE the bank puts its money. Whether you open a savings account, CD, or IRA, the bank can then use your money as it pleases to build up its equity. So you had better make sure you know what the bank’s investment strategies are. Unfortunately, it is quite difficult to sort out. Even despite vows that HSBC and the World Bank would “...not provide facilities and other forms of financial assistance for logging operations that are in violation of local or national laws in respect of illegal logging," they had no problem lending money to a Singapore-based trading group called OLAM, which in turn did fund the illegal logging operations.
What to do. In the coming decade we are likely to see better portfolio management practices on the part of the big banks, as they slowly disentangle themselves from deacade-long partnerships with nefarious environmental profiteers. In the meantime, there are few safe “green havens” for your money. Below are listed the banks which the Wikia Green community believes are truly Green:
One of those rare safe havens is ShoreBank.
ShoreBank has operated for over 30 years based upon the principles of green banking (long before they even had paperless bills!) and they offer an investment model that hopefully many banks will follow – TPL, or “triple bottom line.” The guiding philosophy of TBL is that in addition to bringing financial profits to the company, they must ensure that both the community and the environment also profit.
ShoreBank has worked with Nobel prize winners and top economists, and is widely held to have invented the concept of community development banking. They proved that micro-lending to local small businesses and skilled workers can create an economic renaissance from the grass roots up as exemplified by Chicago's South Shore revival. And they worked closely with Muhammad Yunus of the Grameen Bank to bring micro-lending to the third world, lifting millions our of poverty. Some of the enterprises they have funded include:
- Alternative energy companies like E+co and Indie Energy
- Green collar jobs
- Green home renovations for affordable housing
- Student development programs
...as well as education institutions, churches, temples, homeless shelters, and many non-profit organizations. They have over $2 Billion in assets, are fully FDIC Insured, and have personal relationships with every business, organization or person to whom they have made loans. Co-founder and CEO Ron Grzywinkski call this "good old fashioned banking." And while others banks have been collapsing left and right, ShoreBank has escaped the trap of quarterly earning reports and over-leveraged debts that got so many other banks in trouble. Currently ShoreBank is offering the highest yield online savings account (3.5%) with a $1 minimum deposit, making it perhaps one of the safest places to park your money.
If you know of other green banks add them here!