Banking On Sustainability: e3bank To Offer New Kind Of Bank In Philadelphia Area, Where It All Began
by John Laumer, Philadelphia 
on 09.27.08
Thousands of main streets have banks which resemble the one pictured here. Many of you will recognize the one like it in your town, with it's massive marble plates and columns. The design was intended to impart an air of permanence and/or to resemble the graphical depictions on coins or bills. For a picture of the literal First Bank of the United States in Philadelphia, where this tradition likely began in the USA, look here.
Many old downtown banks in the USA lie empty now, or have been repositioned to other uses, such as the one pictured above, on Main Street in Collinsville Illinois. In spite of the growing popularity of online banking, many newly-built banks have continued on this archaic path: building "Ducks" that are far more detached from the nature of the services being offered and from natural capital then when the many marble-fronted banks on main were built in the 1920's and 30's. Conclusion: to make banks and civilization sustainable, "re-regulation" and LEED aren't enough.
Suppose one were to set out to create a brand new kind of bank: dedicated to driving sustainability principles into the fundamental institutions of society. How would that be done? We asked someone who is part of a team doing just that: Sandy Wiggins, LEED AP Principal, Consilience LLC, and Chair, e3bank. See our interview with Sandy below the fold.
Before we begin with the interview, please note that the e3Bank proposal is moving through the FDIC review process; and, though the current banking crisis in the USA is creating some hurdles, the people behind e3bank (listed here) are working toward a first-quarter of 2009 opening.
TreeHugger:- When I was a kid the bank in my small town looked like the building in this picture. Is there a special significance to you refurbishing an old building as a starting point?
Sandy Wiggins, for e3bank:- Yes. Breathing new life into an existing older building is a great thing to do from a sustainability perspective. Besides the obvious reuse of all the stuff that it takes to make a building, there is a huge amount of what’s called “embodied energy” in buildings – that’s the energy it takes to extract raw materials, process them, and transport them as building materials to the construction site. The embodied energy in a building can equal as much as 50 years of operating energy.
In our economy, energy equals carbon equals climate change. So, it just makes good sense to find new ways to upgrade the performance of older buildings and reuse them when we can. Older buildings like this one are also an intrinsic part of the fabric of a community, adding to the character and sense of place that we all value so much and which adds to the quality of our lives.
TreeHugger::- It's a bold move starting a bank in these times. I assume you've got a strong vision and ways to differentiate your services from all the other 'greening' banks. I'd like to hear about the origin of your vision.
Sandy Wiggins, for e3bank:- For e3bank, being “green” or “sustainable” is not a suite of product offerings or a vertical market within a company. It’s an operating system. It is part of our DNA. e3bank is being built from the ground up on the principles of the Triple Bottom Line - in our parlance “building sustainable enterprise, restoring the environment, and increasing social equity.” It’s a business paradigm that supports change toward a sustainable economy, and not simply a conventional business reaction to capitalize on emerging market trends.
The financial industry is currently in a state of crisis because of its focus on short term financial profits and the single bottom line. This has put the entire global economy in jeopardy. Collectively, we have been acting like children, seeking immediate gratification without taking into account the long term consequences of our behavior. At e3bank, we are trying to act like adults.
TreeHugger::- So, the internet generation doesn't need a teller or Romanesque architecture to manage their money. What are you doing that will impress customers and make them send automatic deposits your way?
Sandy Wiggins, for e3bank:- We are developing a unique suite of products and services which will be technologically advanced and appeal to many consumers, but more than that, they will respond to a shift in values. When you put a dollar in your bank, even in a checking account, your bank is putting that dollar to work.
The question that we want our customers to ask is “What is that dollar being used for?” e3bank is a triple bottom line enterprise, meaning that every dollar we put to work needs to show a return in terms of environmental and social benefit as well as economic profit. Depositors in e3bank are assured that their dollar is being used to support a sustainable future. We’re convinced that there are a lot of Americans, young and old, who want to know that.
TreeHugger::- Will your loan approval criteria have the sustainability dimension added and how will you keep the criteria up to date?
Sandy Wiggins, for e3bank:- Yes, we have designed loan approval criteria that will help us achieve a Triple Bottom Line return and that screen for environmental and social “risk”.
We have a committee of our Board whose sole function is to examine and improve those criteria. However, I want to emphasize that we are not trying to be exclusionary, but rather inclusionary. e3bank’s products and services are all being designed to incent our customers to “do better.”
We have developed innovative loan products that offer very competitive rates to invest in sustainable technologies and practices. Equally as important, e3bank understands sustainable enterprise and green technology. We are a knowledge resource and facilitator. Our bankers are here to help consumers by offering products and services that support their ideas and to make it easy for them to act on those ideas.
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There is one fundamental unsustainable practice of banks.
Most people believe banks lend out money that others have deposited at the bank. This is utilising the value of others "stored work". This is sustainable and socially acceptable.
In fact, the vast majority of loans are simply conjured out of thin air and issued by the banks. This is simply creating debt. In my book this is NOT sustainable and NOT socially acceptable.
But this is how the world spins around. Mountains of debt. A house of cards.
MONEY IS DEBT - There is nothing new under the sun, great, make your bank all green - you are still creating money out of nothing, and growing the level of debt in our society
it's not a cooperative, or what is more often known as a credit union... so although it is imperative that all people and businesses adopt environmentally and morally mature behavioral models, green banking is only half the equation.
capitalism has no place in the future, if mankind is going to continue to thrive on this planet. with capitalism wealth is funneled into the hands of the few, at the cost of the many; and more often than not the environment as well. at this point, you can't just fix one, we need to grow up and fix both (our environment and the society that allowed the environment to become so corrupted).
cooperation is what is required: ownership of, and investment in businesses by the very people who use the services provided. and not for profit, but merely to provide the most effective means to whatever end, in the most responsible manner known to exist. this should be our goal from here.
move forward!
A few things:
1. Capitalism is where the people own the means of production. We do NOT have that now in the US. We have a dirty, bastardized form of debt-based, corporate faux capitalism.
It's not that capitalism is bad - we wouldn't know; we've never had it in all of the history of the US. We've always been worked over by the banks and their special form of econ-terror.
Isn't that what they are doing now? They dry up the money supply and threaten a "Great Depression" if we don't give them more money and labor ("bailouts" and wage reductions). What's it called when you do all of the work and someone else gets all of the economic benefit?
In a model called "CLEAN CAPITALISM" the people would truly own the means of production because they would own their money. Now, the banks own all of the money and you may only borrow it. We can change that.
2. Now, banks create money by "monetizing" a "promise to pay" and they literally type the new money into existence when they deposit it into the borrowers account. However, they ONLY do this when they make a loan - so the new money always increases the debt.
Big problem here: they only create the principal. The money to pay interest is never created within the system. So, the debt is always greater than our ability to pay.
3. That is by definition unsustainable.
4. For a sustainable answer, check here:
Money As Wealth, Study Bottom to Top
Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable. By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day? So now that we have the compute power to provide for all these transactions that will smooth out the market how do we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days. The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent). A system like this will make the financial markets work as smoothly as the local fruit market.