Triodos: Banking on Positive Change
by Treehugger Interns on 06.17.06
Last year I attended my bank’s annual general meeting (AGM). This was no ordinary AGM, but then Triodos is no ordinary bank. I was treated to an organic lunch and a talk by British environmentalist George Monbiot who questioned the sustainability of ANY bank, ethical or not. His reasoning was that lending with interest inevitably leads to economic growth, and economic growth was ultimately unsustainable. He didn’t seem to believe you could decouple economic capital from natural capital (thoughts anyone?). He did, however, concede that Triodos was a necessary stepping stone towards a sustainable society. So what is Triodos, and what sets it apart from other “ethical” banks such as the Co-operative bank, previously featured here?
Triodos Bank was formed in the Netherlands in 1980 and has since grown tremendously. It now has offices in the Netherlands, Belgium, the UK and Spain, with a branch expected in Germany in the near future. According to its 2005 annual report, funds under the bank’s management grew by 25% last year alone, from 1.8 billion to 2.3 billion euros. The core idea behind the bank is that it not only refuses to invest in unethical operations (tobacco, arms trade, fossil fuels etc), but it also demands that a project has positive social or ecological value before it can be considered for a loan. Areas of investment include organic and biodynamic farming, renewable energy (especially community-owned wind power), micro-finance, fair trade, social housing, and care for people with special needs. In addition to its standard banking products, the bank offers tailored savings accounts, whereby customers can choose where their money goes – a customer with a particular concern about climate change, for example, can choose an “Earth Saver” account, guaranteeing that their money is used to fund renewable energy projects.
Not only does the bank offer ethical peace of mind to its customers, it also turns out that they offer a pretty healthy rate of interest and excellent customer service, earning them a recent Guardian Consumer Finance Award. I am sure that the sustainability, or otherwise, of economic growth will continue to be debated by treehuggers for years to come. However, I for one am delighted to know exactly what my money is doing whilst we wait for the debate to be settled. I’m also wandering what’s for lunch at next year’s AGM... [Written by: Sami Grover]
I like the idea of a bank that chooses ethics before choosing it's investments. What's sad is that they don't have a branch in the US. I hope they will expand in time. I haven't heard of other banks, aside from Bank of America in their recent hybrid deal, doing anything like this. Here's to hoping that more will follow in their footsteps.
http://www.feasta.org/documents/review2/carrie2.htm
Can a bank operate successfully if it does not charge interest on its loans? The Swedish JAK Medlemsbank (Members' Bank) certainly does - it has been called the safest bank in Sweden
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http://www.jak.se/
JAK has been operating an interest-free savings and loan system since 1970. A bank license was obtained in 1997. Formally JAK is a co-operative bank. We have 32,000 members and our growth is 10 percent per year.
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http://www.globalideasbank.org/site/bank/idea.php?ideaId=985
Why do we have a money problem? Margrit Kennedy's answer in this booklet is that it is because 'of the payment of interest from those who have less money than they need to those who have more money than they need.' To summarise her arguments:
Interest acts like a cancer in our social structure, with money following an exponential growth pattern. Inflation through the printing of money is a way for the government to overcome its increasing interest-related indebtedness. Government income in West Germany rose only 300% between 1968 and 1982, whilst its interest payments rose by 1,160%.
'In contrast to interest, a money system in which people would pay a small fee if they kept money out of circulation'
Kennedy and others propose, in contrast to interest, a money system in which people would pay a small fee if they kept money out of circulation. Everyone would have two accounts, a current account losing 6% a year, and a savings account with no interest (but with the new money retaining its value)
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http://www.islamic-banking.com/ibanking/whatib.php
The basic principle of Islamic banking is the prohibition of Riba- (Usury - or interest):
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i like the idea of a zero-interest currency and even more that one of a local monetary system:
with such a system, exchanging local gets system inherited
http://www.ex.ac.uk/~RDavies/arian/local.html
page of links to resources on microcredit systems, local and interest-free currencies
http://www.lets-linkup.com/
1,500 LETS groups from 39 countries
LETS, or Local Exchange Trading Systems, are local community trading groups where members exchange their goods and services with each other in a spirit of harmony and a genuine desire to help each other.
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for the interoperability between several LETS systems with names like InterLETS, MultiLETS and UNILETS got created
http://www.gmlets.u-net.com/design/dm2%5E2.html
http://www.complementarycurrency.org/helpdesk/linking_mutual_credit.html
MultiLETS
http://www.cyberclass.net/turmel/urlsnat.htm
UNILETS
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http://hourmoney.org/coopgame.htm
Apply sociology to economics by playing Cooperation: The Wealth of Nations Game.
http://www.joytopia.net/wbb2/thread.php?threadid=883#post3010
Joytopia – world-wide wealth in harmony with nature
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A fundamental question is not addressed here: "Where does money come from in the first place?" The truth is, there is money and there is credit.
Out of every £100 97 is credit in bank accounts. In other words, only three out of a hundred pounds is in the form of notes and coins real money.
If there were enough notes and coins in irculation, the need to borrow money from other people would be much less acute.
"Ethical Investment" is also an oxymoron... "I give money and you do the work"... how ethical is that?
(Monbiot)... "didn’t seem to believe you could decouple economic capital from natural capital (thoughts anyone?)."
Natural Capital, photosynthesis efficiency, our free lunch from Father Sun, accumulates new growth at about 3 or so percent per year. The sustainable growth rate of Economic Capital therefore is challenged by this natural limit. Thus I agree natural and economic capital are linked. A more detailed argument is made by ecological economics.