Who Wants To Finance a Coal Plant? (Sustainable Industries Journal)
Environmental activists and Wall Street are interweaving at a fevered pitch. Is it the activists who are grasping the importance of finance, or is it the finance community that finally gets the potential economic disaster of ignoring climate change?
March 27, 2007
Are environmental concerns still at odds with financial goals, or is that really changing? Triple bottom line banking and investing are the latest financing trends. Some lending institutions are focusing exclusively on entrepreneurs with clean technologies, or on sustainable companies.
Trevor Curwin, a Bay area hedge fund consultant, writes that a quarter-to-quarter financial myopia prevents public companies from considering real environmental liabilities that are several years -- or decades -- away. Curwin's article appears in the April 2007 edition of Sustainable Industries Journal, where he is a regular contributor.
He could say the same for most lenders, but he highlights a few innovators in his article.
ShoreBank Pacific was the first commercial bank in the United States to commit to environmentally responsible lending. The bank was formed ten years ago as a joint project of a community development bank (also a new idea at the time) and Ecotrust, a nonprofit based in Portland.
I've met bank CEO Dave Williams and spoken with him at length. He's passionate about the role his bank plays in its customers' businesses. ShoreBank blends financial guidance with advice on green building and energy efficiency. Williams is quite knowledgeable on these subjects -- much more so than one might expect of a banker. He has reinvented himself throughout his career, going from physics teacher to manufacturing executive before moving into commercial banking.
The article also highlights New Resource Bank of San Francisco. It opened just last fall, and is focused on serving entrepreneurs and sustainable businesses in the "growing wave of green businesses and the people who value them." New Resource was modeled after Silicon Valley Bank, which focused on the tech sector.
Curwin also covers the role of big banks and the Equator Principles for review of the environmental and social concerns surrounding project finance.
And some of those big banks are jumping on the triple bottom line banking bandwagon. Bank of America in first quarter 2007 committed a portion of $18 billion for green building design and development. Wells Fargo launched an environmental finance team in early 2006.