Green Banking: How credit unions support environmental sustainability.

The start of spring, with everything starting to bloom, is a good time to discuss green banking. Maybe you’re wondering what exactly green banking means? And what is a green bank? There is a bit of confusion about this, which is understandable given the relative recent introduction of these ideas into the financial services sector. First, green banking practices can be adopted by any financial institution – much in the way they can be adopted widely across most kinds of businesses and organizations. Fundamentally, it simply means adopting environmentally sustainable best practices wherever possible, including in the selection of building and furnishing materials, installing energy efficient lighting and machinery, selecting electric or hybrid vehicles for company cars, supporting employee use of mass transit, and having recycling and composting stations in the workplace.

In the popular vernacular, some of these practices might fit neatly under the umbrella term carbon-neutral banking, but that’s not quite right: while banks and credit unions may be actively engaged in cutting their own carbon footprints as an organization, carbon-neutral banking is typically used as a term for banking’s role as an intermediary in identifying, evaluating, and financing projects that move economies toward net-zero emissions.

More specifically for banks and credit unions, green banking (or environmentally friendly banking as we like to call it) can offer members choices that can have real world impacts, including discounted interest rates on loans for energy efficient vehicles, choosing e-Statements over paper, financing programs targeted to sustainable investment options to members, adopting sustainable practices in branches and offices, participating in green community initiatives, and promoting environmentally-friendly events like shred days (we have a couple of those coming up!).

For a single consumer, choosing these options may seem inconsequential, but when chosen by hundreds of millions of people using financial institutions across the globe, the impact of those choices is of consequence. Lafayette Federal is proud to offer these environmentally-friendly products and services to our members, and to also use them in our branches and headquarters.

Is Lafayette Federal a “green bank”? Not really. First, we’re a credit union, of course, but we consider ourselves an environmentally friendly, environmentally conscious institution. Second, there really are organizations called green banks. According to the Environmental Protection Agency, green banks are “public, quasi-public, or nonprofit financing entities that leverage public and private capital to pursue goals for clean energy projects that reduce emissions.” Furthermore, these green banks do not have depositories, nor do they provide typical banking services.

As language pertaining to climate and environmental issues and subjects becomes increasingly part of our everyday conversations, more phrases may come to represent something other than which they were originally considered. For example, maybe you’ve heard of “eco-friendly” debit or credit cards? Such cards exist, but do you know if the phrase describes a) plastic-like cards that decompose and don’t harm the environment when discarded, or b) card programs that specifically support environmentally conscious, sustainable, or carbon-neutral endeavors or programs? If you guessed “both,” good job, but know that an “eco-friendly card” may only do one or the other.