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Jeffrey Hollender on Sustainable Banking

| Thursday April 19th, 2012 | 4 Comments

Powerful news: A recent study proves that sustainable banks deliver higher financial returns than some of the world’s largest financial institutions.

A study commissioned by the Global Alliance for Banking on Values (GABV), compared the performance of 17 values-based banks with 29 of the world’s largest and most influential banks between 2007 and 2010. The 29 banks are defined as Globally Systemically Important Financial Institutions (GSIFI) by the Financial Stability Board and often referred to as “too big to fail!”

The report concluded that values-based banks were twice as likely to invest their assets in loans, lending more than 70 percent of their assets during this period on average. The values-based banks also appear to be stronger financially with both higher levels of, and better quality, capital.

The sustainable banks analyzed in the report also delivered higher financial returns than some of the world’s largest financial institutions.

Return on Assets averaged above 0.50 percent for sustainable banks while the big banks earned an average of just 0.33 percent. That means that sustainable banks performed 51 percent better. Values-based banks also had superior returns on equity averaging 7.1 percent, compared to 6.6 percent for the GSIFI banks.

“Our banking industry has an unprecedented opportunity to change, to help meet some of the greatest social and environmental issues of our time,” says Peter Blom, GABV Chair and CEO of Triodos Bank, Europe’s largest sustainable bank.

“This report shows that doing good is beneficial for banks not just in a theoretical and ethical sense, but also financially, when measured against conventional benchmarks such as the financial bottom line.”

One important measure of the growth of the values-based banking sector over the past four years is in the amount they lend, financing their clients. This increased 80 percent between 2007 and 2010, while mainstream banks increased their lending by just over 20 percent. Significantly, this growth highlights the focus of values-based banks on expanding business in the real economy.

To view the report and for more information on the Global Alliance for Banking on Values, visit www.gabv.org.

Read more on Jeffrey Hollender’s blog. 

image: Mukumbura via Flickr cc (some rights reserved)


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  1. April 19, 2012 at 6:55 am PDT | Scott Cooney writes:

    I’ve been banking with New Resource Bank for several years now, both for my personal savings and checking, as well as my business accounts. I chose them because I know where my money is when I sleep–it’s invested in green building, sustainable food, and clean technology.  Knowing that they are also doing well by doing good is just the cherry on top. I’m thrilled to see this–happy for the success of values-based banks and everyone who works for them.

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  2. April 19, 2012 at 15:02 pm PDT | guest writes:

    Read a more complete article about this report at http://ourworld.unu.edu/en/to-finance-change-finance-has-to-change/

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  3. April 21, 2012 at 7:30 am PDT | Andrea writes:

    Is there a list of value based banks in America?  

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  4. May 03, 2012 at 2:46 am PDT | Gmarsky writes:

    I think the timing of this study coinciding with the financial crisis and the largest traditional banks being scrutinized by regulators may have skewed the data. I take huge objection to using the word “prove”. The sample bias is too strong. What have the numbers born out subsequently? What were they historically? Why only a handful of sustainable banks. Please do your research and then draw conclusions.

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