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The Green Note is a storytelling-driven podcast series produced by Climate First Bank that explores the intersection of environmental conservation, community impact, and personal legacy. Climate First Bank's founder, Ken LaRoe, hosts impact leaders to discuss timely and important Corporate Social Responsibility (CSR) topics, aiming to educate our stakeholders and spark change in our community. In this episode of Green Note Fireside Chat, Climate First Bank Executive Chairman Ken LaRoe talks with Martin Rohner, Executive Director of Global Alliance of Banking on Values, about the power of ethical banking and the potential for mainstream finance to adopt a values-based model.
What does it mean to bank with your values? Among the most powerful forces determining the shape of our world, the banking industry uses our accumulated capital to invest in businesses, communities, industries, and initiatives across the globe. Without access to capital, most people can’t buy homes, launch businesses, or fund renewable energy projects. But banks also finance many harmful initiatives, like fossil fuels and weapons manufacturing. Because the trillions of dollars we collectively deposit into banks are used as a critical driver of initiatives around the world, the bank you choose to hold your money is a choice about the kind of world you want.
The Global Alliance for Banking on Values (GABV) is an international network of organizations and leaders in the banking industry using finance to serve people and the planet. Since its founding in 2009, GABV has grown to include 72 member banks in 42 countries around the globe, from Canada to Papua New Guinea, Bolivia to Japan — all united around a commitment to a values-based business model.
While large banks are typically more active in the capital markets, values-based banks are invested in the “real economy” — such as brick-and-mortar projects and the production of goods and services. They tend to finance more entrepreneurs, consumers, and homeowners. The structure, strategy, and leadership of values-based banks focus on steady, continuous growth and long-term stability. “The real economy typically is much less speculative and prone to the kind of cycles we see happening to the larger banks,” Martin says.
While mainstream banks finance global fossil fuel production — “the top four U.S. banks alone represent 20% of global fossil fuel financing,” Ken says — the country’s values-based financial institutions often focus on renewable energy, using the raw material of our collective deposits to invest in ways that accelerate solutions to environmental challenges.
Banking with a values-based financial institution means “you are driving a business model to serve people and the planet,” Martin says. “You are there to make a difference, to have a positive impact on society and the environment.”
That attitude can extend to better customer and employee experiences, as well. “When you walk into the door of a values-based bank…you probably have a very different interaction with the teller, the lender, because these are all very committed people believing in the business model and the mission of the bank,” says Martin. “They want to make a difference.”
The values-based approach is not at the expense of making profits — and values-based banks aren’t just “a bunch of bunny huggers,” Ken says. Climate First Bank, for example, “is in the top 10% of performance of all community banks in Florida.”
“Values-based banks are not profitable despite being value-based, but because they are values-based,” says Martin. “The business model really is … putting the elements in place that will create greater customer loyalty, greater stability, and more prudent risk management policies.”
GABV’s diverse membership includes credit unions, microfinance banks, retail banks, and commercial banks. The common denominator among them is an adherence to GABV core principles, including transparency and accountability. To become GABV members, institutions are reviewed against a scorecard evaluating their portfolio — and the degree to which it serves triple-bottom-line impacts for people, planet, and prosperity — as well as financial resilience, governance, ownership, business strategy, products and services, and HR policies.
Today, GABV’s membership represents about $265 billion in total assets, employs about 100,000 people, serves over 50 million clients — and likely touches the lives of about 200 million people. These figures prove that values-based banking not only works, but that it works on a large scale.
“We've got the size and the credibility that we can start engaging far beyond our movement, and that's really what we need to do,” says Martin. “We need to change mainstream finance…It’s not just about our members. Our scorecard is mature enough that we can engage with the mainstream industry in a way we were never able before, and where we can show how they can slowly change their business models to become more like us.”
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