BY Waveney Warth
Is your bank doing all that it can to make a difference for good? Banks are one of the most powerful ‘future creators’ in modern society. More or less they get to choose who they invest their millions (and billions) in, empowering some and squeezing others. They can also affect climate through their operational footprints and have significant opportunity to give back to communities through grants and other charitable activities.
How to Save the World podcast decided to delve into finding New Zealand’s most sustainable bank. So I rolled my sleeves up and spoke with financial experts from across the sector to devise a five point criteria and weighting system for assessment and then researched and contacted each bank to see how they performed in each category. Special thanks to Professor David Tripe, (Professor of Banking at Massey University); Barry Coates, (Mindful Money CEO); John Berry, (CareSaver CEO); CEOs and Heads of Sustainability within the banking sector that were happy to speak with me; and to the people seeking finance who shared their stories.
The five criteria are:
Looking at the carbon footprint of the operations inside the big five banks including things like electric vehicle take-up in their fleet (shout out Westpac), getting 5 and even 6 Green star buildings (that’s Kiwibank]) sorting out green business procurement (ANZ and Westpac is using Fwd.) and ASB, Westpac and BNZ all getting Toitū Envirocare[https://www.toitu.co.nz/] certification, for being carbon zero (well ASB & Westpac) or enviro mark gold (BNZ - making a start).
Looking at the social and environmental activity of the banks, how they treat their employers and what they’re doing for the wider communities they’re a part of. Including BNZ’s support of Kauri 2020 Trust and Westpac’s CoGo Partnership – a cool organisation making ethical living clearer and easier.
Investment and Lending Portfolios
Looking into where the bank’s are putting their money. Which banks still ‘fuel’ climate change by providing oil companies with capital? To check on your bank:
Eco-literacy of lenders
As our society seeks to transition to a circular-low-carbon-economy, new enterprises with different profit and risk models are emerging, (examples include social enterprise, community enterprise, iwi enterprise, co-ownership, micro-finance, regenerative farming, organic farming, permaculture design and alternative housing solutions like homes without land, prefabs, and co-housing). We spoke with people from these sectors and asked them to share their experiences in seeking finance. In short, the experiences are frustrating. Banks can only lend to what they know and no one seems to yet have a frame of reference for loan seekers who may for example, be actively trying to reduce productivity or mitigate risk through community involvement. This doesn’t mean positive discrimination! It means banks knowing how to assess risk accurately in these new contexts. And although it may take a while to trickle through, Sean Barnes director of Fwd: says ``there is a great deal of interest from banks wanting to be better involved”.
Several of the experts I spoke with pointed out that it's important who owns a bank. While things are never clear cut, a locally owned bank in such a small country is forced to be more transparent and is able to be more responsive. Banks that are listed and accountable to shareholders have an obligation, above anything else to do all it legally can to maximise profit. Offshore owned and locally owned banks suck or circulate profits through our communities in very different ways.
SPOILER ALERT: If you are planning on listening to the show to find out who we 'awarded' the most sustainable bank mantle to then don't read on....
IN SUMMARY all of the banks are doing some great things, I spoke with so many passionate people and the big banks in particular are supporting some great outcomes in the charity sector and leading the way with operational sustainability.
I thought picking a winner might be really hard, but actually, each independant financial expert I asked, if they felt like they could make call agreed. If we asked the UN what they were doing to further sustainability would we expect them to talk about their office recycling programme? NO UN has power. Banks have power (arguably more power that the UN?!? - I don't know but its a lot of power). Transformational power. We have judge a bank on what it is doing with its true power - its power to shape our future by who it lends to. It also helps to be locally owned and the co-operatives are such a great business model I feel like the title is there for taking...BUT SBS, TBS and Co-Operative Bank haven't really jumped in there. A great example of what they could be is in Bank of Australia and Triodos Bank (UK). They have claimed the sustainability space and have been going gang busters ever since. May be next year you guys!
The winner of the How to Save the World most sustainable New Zealand bank is …Kiwibank. The bank is New Zealand owned, and even though its not a cooperative, (because its owned by the government) it is really owned by all of us. Essentially Kiwibank won because like a lot of the other banks they tick a lot of awesome boxes but in addition they have one of the strongest no lend policies for Fossil Fuels in the world. And THAT is fantastic! Something to be so proud of! And Kiwibank is doing some great stuff in the community too. Well done Kiwibank!
THANK YOU to everyone who contributed to this episode, all of the banks; all of the independent organisations from the financial sector; and all of the varied representatives from the sustainability sector:
Sustainability experts and enterprises