Citing concerns over air and water pollution, deforestation, pesticides, and other environmental hazards, Wisconsin senator Gaylor Nelson and activist Denis Hayes organized the first Earth Day on April 22, 1970. An estimated 20MM Americans took part in events nationwide that resulted in the creation of the Environmental Protection Agency and other environmental laws. It’s been more than 55 years since the first Earth Day. With more eco-friendly technology and products available now than ever, plus the savings and incentives for efficiency, it’s no wonder companies are adopting environmentally aware strategies. Sustainable Branch Initiatives Pay OffThe concept of the eco-friendly and sustainable branch can be off-putting to banks, which may see these steps as performative, another example of greenwashing, which would be costly and only invite negative feedback. In reality, sustainable strategies in banking can financially benefit financial institutions and their reputations. Sustainable branches are also providing a greater benefit worldwide, according to research. Some community development financial institutions (CDFIs) have already discovered that sustainability and success can go hand-in-hand in banking, given the right approach. Case in point: Beneficial State Bank — a top-ranking B corporation — and its AltaSea commercial loan production office in the Port of Los Angeles. Opened officially in January 2022, the bank’s eco-friendly office represents a partnership with the Port and cities of San Pedro and Los Angeles, CA to revitalize the local economy, particularly around the waterfront, as part of the growing “blue economy”. As far as the benefit of sustainability supporting profitability, the proof is in the pudding: Beneficial State Bank’s assets grew nearly 13% YoY in 2024, while committed to fossil-fuel-free use and climate action.According to the Global Alliance for Banking on Values (GABV), sustainability-focused banks are directing as much as 75% of their total assets to the economy, compared to just 40% for conventional banks. Here are some examples:
- Morgan Stanley’s Institute for Sustainable Investing found that sustainable banking practices can reduce a financial institution’s carbon footprint by up to 40% through operational changes alone. These reductions come from various initiatives, including transitioning from paper to digital documents, upgrading to energy-efficient facilities, implementing remote work, utilizing renewable energy sources, and adopting sustainable supply chain resources.
- The Banking Environment Initiative found that every dollar allocated to sustainable projects can potentially prevent up to 47 pounds of carbon dioxide emissions annually, according to the group’s 2022 research.
The Many Shades of Eco-Conscious BranchesCommunity financial institutions (CFIs) have embraced this challenge and crafted their own ways of being environmentally aware, especially when it comes to their branches. Energy-efficient lighting and HVAC systems, low-emission paint, solar panels, and water-conservation strategies are just a few of the ways financial institutions have infused ecological awareness into their physical storefronts. Specifically, financial institutions are discovering new ways to create more eco-friendly and sustainable elements. These changes can range from large projects to simple initiatives:
- Solar panels, often attached to the physical edifice of a bank branch to capture energy and heat, can help reduce electricity usage. Similarly, taking part in solar “farms” as a way to rent sustainable energy can defray a branch’s conventional energy costs and reduce its carbon footprint.
- Use of natural lighting and better air circulation, which is not only more eco-friendly, but is also shown to improve employee well-being and the customer experience. For instance, First Hawaiian Bank opened a new branch earlier this year with a focus on sustainability. The branch consists of two buildings with a breezeway in between them where customers can meet with branch employees, if they choose.
- Going paperless. Offering customers paperless statements is a popular way to be more eco-conscious and save budget on paper and toner.
While sustainability may not be top of mind for some CFIs, there’s a lot of profit to be had in the sustainable branch industry. By leveraging new eco-friendly programs available to your CFI, installing energy-efficient technology, and partnering with environmentally conscious local groups or companies, your CFI stands to make an impact and see better margins.
