Filed under: Sustainability | Tags: Incentives, Investing, Sustainability Practices
At a time when consumers are increasingly looking for “green” alternatives in their personal product choices, it should come as no surprise that banks are also looking to lure customers by offering more environmentally conscious services. Such services are often mutually beneficial to both customer and financial institution, and many times are driven equally by a desire to minimize the impact on the environment as well as improve the bank’s bottom line. Online banking is a prominent example of a service that is widely touted as being commercially savvy (e.g., by minimizing the costs of issuing statements, banks are often able to reward their clients with more advantageous rates on their deposits) while also being environmentally pro-active (e.g., by reducing the amount of paper necessary to issue physical statements, gasoline required to deliver those statements and landfill to dispose of such statements).
Most banks, whether consciously or not, have engaged in a number of environmentally friendly activities to remain competitive in the marketplace, reduce overhead and improve efficiency. Such programs include efforts to reduce energy consumption or to use less expensive recycled materials, such as plastics in bank-issued credit cards. Other initiatives are more overtly “green,” such as increased lending to renewable energy providers, energy efficient mortgages to finance environmentally-minded home improvements and investments (such as certificates of deposit) the proceeds of which are exclusively dedicated to funding renewable energy projects.
A recent example of a financial institution demonstrating its awareness of the benefits of “green banking” was the construction by TD Bank of what is expected to be the first net zero energy bank branch in the country. TD Bank’s new Fort Lauderdale branch incorporates 400 solar panels in its design, which should generate more than enough solar power to offset the location’s annual energy consumption. Of particular note, TD Bank was able to use solar panels in the canopy for its drive-in teller windows at the same cost as a traditional canopy, highlighting the potential cost savings available in using renewables technology in new construction. TD Bank’s real estate green strategy officer indicated that approximately 80 percent of the bank’s new branches will incorporate solar power into their design. In an industry in which profits are mainly derived by minimizing costs and increasing customer volume, initiatives such as this are likely to be emulated by other banks in the near future.
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