But growing values-based sector hopes to woo customers with environmentally and socially sound business practices
by. Natasja Sheriff
Vince Siciliano, head of California-based New Resource Bank, has what he thinks is an abrupt question for people asking about his business and where they might put their hard-earned savings.
“Do you know where your money spends the night?” he asked. “They haven’t thought about that, and I tell them it’s not in a mattress and I assure you it’s not in a vault either. It’s out there somewhere in the world, doing something.”
That “something” might not just be traditional activities either, such as home and small-business loans. According to the bank watchdog BankTrack, the largest U.S. banks are funding a host of controversial activities, from rainforest removal in Indonesia to speculation on global food prices and the manufacture of cluster bombs — banned by 84 state signatories to the Convention on Cluster Munitions.
None of that is surprising news, of course. But in Europe and other places, some consumers are pushing back against the large banks and their lending practices. Banks have sprung up to offer “ethical” services, like Netherlands-based Triodos, with branches all over Europe, and the Canadian Vancity. These banks operate on a set of so-called ethical principles, defined in terms of the social and environmental well-being of the communities they serve.
But in the United States, the “ethical” banking movement has been slow to take hold, and the concept of “banking ethics” is more likely to trigger associations with the reckless behavior of bankers than the environmental and social impacts of finance and investment.
“Ethical banking? It sounds like an oxymoron, because the nature of capitalism is such that you can’t really be ethical,” said Alex Kapelman, who recently switched banks to avoid ATM fees, but not to ensure that his money is used only in an acceptable way. “I mean, the whole point is to just focus on making as much money for yourself as possible,” he added.continue reading »