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The Latest Corporate Social Responsibility News: Banks Doing the Right Thing -- for a Change

Submitted by: CSRwire

Categories: Events, Corporate Social Responsibility

Posted: Jun 16, 2009 – 11:59 PM EST

 

By CSRwire Contributing Writers Francesca Rheannon and Bill Baue of Sea Change Media

Banks used to come under fire for redlining: shunning investments and mortgages in low-income and minority communities. More recently, they’ve been accused of preying on the poor -- forcing African American and Hispanic borrowers into predatory subprime loans (even when they qualified for prime loans.) And the banking industry as a whole has come in for scorn and outrage from all corners lately for fueling the financial meltdown.

But some banks are bucking this trend. Union Bank of California just won a Corporate Leadership Award for “advancing the cause of affordable housing and dispelling myths about homelessness.” A Community of Friends bestowed the award. ACOF, as it’s known in its home community of Los Angeles, provides services and housing for those with special needs, such as the homeless, people with mental illnesses and farm workers.

Since it’s founding in 1995, Union Bank’s Community Development Finance division has given more than $3 billion to support affordable housing. That’s translated into more than 25,000 new homes for California residents in need. And with foreclosures sweeping the state, such relief is a blessing.

Globally, other banks are also committing to “do the right thing.” Triodos Bank of the Netherlands, which embedded sustainability at the heart of its mission since its 1980 founding, was named the “Sustainable Bank of the Year.” The FT Sustainable Banking Awards, presented jointly by the International Finance Corporation (IFC), honored Triodos for “leadership and innovation in integrating social, environmental and corporate governance considerations into their operations.”

Corporation 20/20 recently recognized Triodos’ prescient business model by inviting its CEO, Peter Blom, to speak at the Future of the Corporation Summit in Boston. Blom said that banking has a higher responsibility to society, because it is so integral to the functioning of the whole economy. As such, he said it must be driven by a holistic approach that takes in all social and economic needs of society and the planet, aiming to maximizing sustainability rather than profit. (This week’s Sea Change Radio, available Wednesday evening, features Blom’s discussion.)

The model seems to be working -- and profit hasn’t suffered, either. The bank has averaged an annual growth of 20 percent in the past 10 years, and 25 percent growth in 2008. The judges’ panel, which included Rachel Kyte of IFC, thought Triodos just might be a model for the future of banking.

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