Do you know where your money sleeps at night? When customers deposit money into a bank or credit union account, those funds don’t sit quietly in a safe until the customer needs them. Instead, the bank loans them out or invests them to make even more money. Deposits are considered an asset to that financial institution.
Informed clients want to know what their bank does with those assets. Do they loan it to or invest it with entities that pollute the planet or protect the planet; take back women’s rights or support a more equitable community; roll back environmental directives or preserve natural spaces?
Given a choice, many bank and credit union patrons would rather see their money go to causes that align with their values. How do you find out what happens to your deposits?
One way is to see if your financial institution belongs to the Global Alliance for Banking on Values (GABV). Note: Only 10 banks and credit unions in the United States are members. Although the number is small, they remain mighty in championing good causes. GABV members want to make positive changes in banking by making the system more transparent, more environmentally sustainable, and share the mission to do this by supporting individuals in fulfilling their potential and building robust communities.
People, planet and prosperity, the triple bottom line
“We don’t just provide financial services just to individuals,” says John Zmolek, CEO of Verity Credit Union, a member of GABV. “Verity promotes the financial well-being of communities, the places where our customers live. The vision is to create co-operative communities so individuals can dream boldly about what their lives could be like.”
Verity, a community-chartered credit union, focuses on people, the planet and prosperity as their bottom lines.
If our planet isn’t healthy to live on then nothing else matters, Zmolek says. “We make 30-year mortgages and want to ensure those houses will be in a livable community for a long time.”
Following the footprints
One way to help keep communities, and the planet, livable is to reduce our carbon footprint. With this in mind, Verity has undertaken a project to track the carbon impacts of the car and mortgage loans they make. Jae Lee, director of research and analysis, says his team records the dollar amount of the loan, the kind of vehicle, its level of carbon emissions and how those compare to the carbon emissions standards for vehicles.
“Verity committed to measure and report financed greenhouse gas emissions when we signed a commitment letter for the Partnership for Carbon Accounting Financials (PCAF) in 2019,” Lee says.
As spelled out on its website, PCAF is a “partnership to facilitate transparency and accountability of the financial industry to the Paris Climate Agreement.”
“We have good feelings about our prospects because our credit union members are currently buying high-efficiency hybrids or electric cars and being socially responsible,” says Lee.
Measuring carbon emissions for mortgage loans is much trickier, says Garren Moss, reporting analyst for Verity Credit Union. Discovering how to recognize a bank’s responsibility for carbon emissions for the life of the loan is currently the missing ingredient, he says. This missing ingredient is now available through PCAF.
After settling on the best way to track the environmental friendliness of mortgage loans, Verity’s analytic team plans to add solar loans to their agenda.
“Lots of financial institutions are reluctant to get into the solar market because they can’t repossess solar panels,” says Zmolek. “We make it easier for our credit union members and potential members to install solar panels on their roofs, thereby deterring climate change going forward. We do this by offering loans that are interest-free for the first 18 months, until their tax rebates come in.”
A little over a year ago, Verity connected with Solgen Power in Pasco, Washington. Roby Clyde, president of banking at Solgen, says normally solar loans require great credit and substantial income, but this program helps make it work for almost anyone that owns a home and has a power bill. Solgen can also lock in a low interest rate and homeowners then save money from Day 1.
Do Verity’s goals match those of its members? Zmolek says his staff continuously asks that question.
“We believe the growth of our customer base is a sign that we are in tune with our members,” he says. “Verity attracts people who want to know where their money sleeps at night. And once they know, they also sleep well.”
At Verity Credit Union, we put people, planet and prosperity for all above the bottom line. If you want to change the world, take a closer look at where your bank is investing your deposits. Then choose banking for good.