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Sense & Sustainability: Flora and fauna-friendly finances

By Vanessa Farquharson

National Post , May 6, 2009

A few years ago, I switched from Royal Bank to President's Choice Financial because I could never find any of those blue and gold ATM machines in Toronto and the service fees were driving me crazy. Now, I'm considering switching once again, but this time it's for entirely different reasons: I want the greenest bank.

In fact, so do a lot of people - today's environmentalists, after all, tend to care about more than just pesticides and litter; they take a holistic approach, greening every aspect of their lives, and finance is one of them.

A story in The Guardian recently appeared with the headline, "Ethical banks cash in after trouble on the high street." In the story, writer Tim Hunt remarked upon the rise in popularity of alternative banks and credit unions (non-profit, member-controlled cooperatives) in the U.K.

When it comes to Britain's larger national banks, some are continuing to struggle in the economic downturn, but others are taking initiative by offering micro-loans and ethically sound mutual fund packages.

This shake-up of the financial system, he says, is a good thing, for the same reason crop rotations are good for the soil.

But even looking at the larger banks, one finds that equal - if not more - attention is being paid to sustainability; this applies to both little things such as the amount of paper being used, as well as bigger initiatives like multi-million-dollar donations to local green charities.

In fact, the Canadian Bankers Association updated its website just last month with a post called "Banks and the Environment," in which it detailed all the responsibilities financial institutions have in promoting sustainability, breaking this down into four categories: Operations, Lending, Products and Services, and Community Activities.

When it comes to operations, a branch might choose to purchase its energy from an alternative source; in the lending department, loan officers may try to follow the Equator Principles, an international set of guidelines for assessing the environmental and social impacts of a project.

Some of this is just for the sake of good marketing, of course, now that green is trendy - but much of it is genuine. The question is, how many people care?

"I think, in most cases, people will choose a bank based on it being a good provider of the services they need and a financially stable organization," says Sandra Odendahl, RBC's director of environmental affairs.

"However, I do believe there are a small number of customers who would walk across the street to pick the greener bank."

If the average Canadian customer picked RBC, it would be a pretty good choice. The company is in the midst of a 10-year, $50-million grant program to support watershed protection and clean drinking water, it has opened 36 new emission-free branches, started a furniture-reuse program and this year was named one of the world's Top 100 sustainable corporations.

"We realize the ways in which environmental issues can translate into financial issues," Odendahl says, "and we made that connection a long time ago, which is why we've had environmental management policies for our lending since 1992.

"Now, we've introduced the Jantzi funds [a line of mutual funds inspired by the Jantzi method of environmental and socially responsible evaluation] and I think our customers are beginning to understand why - they're beginning to understand all the ripple effects of their investment decisions."

Indeed, the connections between the economy and the ecosystem are being noted more often these days, from the simple fact that we need trees and oil to make paper money to the broader connection between mutual fund investments and advancements in sustainable technology.

Over at TD Canada Trust, the bank's chief environment officer Karen Clarke-Whistler agrees.

"My position was created about six months ago," Clarke-Whistler says, "because our company views issues such as climate change and sustainability as part of a lasting trend that will persist regardless of the state of the economy. In fact, it's a key component of the economy, and it will affect all aspects of our lives."

To back this claim up, she boasts about TD's Friends of the Environment Foundation, as well as its annual Great Canadian Shoreline Cleanup, its plan to be carbon-neutral by next year and a host of other Reduce, Reuse and Recycle initiatives. Of course, it also doesn't hurt that the bank's signature colour is green.

And yet, while it's obvious that both RBC and TD are making considerable efforts to reduce their footprints and should be commended for this, neither is a unique case study - CIBC, Bank of Montreal, HSBC and Scotiabank all have extensive information online about their respective environmental do-gooding.

So perhaps, in choosing the greenest form of banking, it's less important to focus on the actual bank than on how the individual client is using it - ultimately, it's up to the customer whether or not to use online billing, decline a paper receipt after each transaction, invest in socially responsible mutual funds and so on.

"It goes both ways, though," Clarke-Whistler says. "Sometimes our customers suggest things to us and we learn from them. Other times, we have to take the lead and do our best to educate."

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