By Shelia Watson

When it comes to financial services, green is golden, as a recent surge in banks looking for green industries gains prominence across the country.

Take, for instance, New Resource Bank, which opened its doors in San Francisco last September. According to a statement released by the bank, the state-chartered institution opened with $24.75 million in equity capital, offering loans to small and medium-sized businesses as well as free consultations for clients trying to reduce energy consumption and greenhouse-gas emissions.

Capital of the bank is contributed from 240 shareholders that include leading entrepreneurs who have built pioneering companies as well as experienced bank investors. In true “green” fashion, instead of cutting a ribbon, the bank’s founders snipped a garland of ferns and herbs to mark the official opening of their office. The facility is outfitted with energy-efficient lighting and heating/cooling systems, along with carpets, furniture and cubicle dividers made from recycled materials.

The concept of green banking, also known as community investment banking or socially responsible banking, seeks investment in corporations or nonprofit organizations that are environmentally beneficial.

Although the movement hasn’t officially made its way to this region, many local banking industry officials believe green banking is inevitable.

“I believe it’s a concept that’s coming,” said Hugh Lane, president of Bank of South Carolina. “It’s caught on in places like California, and certainly in Charleston we’re concerned about conserving the environment.

“Actually, it’s not that new of a concept around here. When I worked with the South Carolina Conservation Bank Act, I saw that people in this community are infinitely more concerned about the environment than any other metro area that I know of. I think when it does arrive, it will be embraced.”

The increased concern over the instability of traditional energy sources was a factor in the formation of green banking. Officials at New Resource Bank say the bank will be both a traditional community bank and a backer of green ventures, focusing on ventures such as organic farms that use environmentally sound green techniques; alternative energy technologies, such as biofuels and solar energy; and green building practices, such as buildings using energy-efficient insulation.

The green banking movement is making its way slowly to the Southeast. In 2003, the Community Investment Center recognized ten banks whose green investments supported forest preservation, clean water production, eco-tourism, responsible farming practices and the recycling of discarded materials, among other environmentally friendly practices.

Two of the 10 are located in Durham, N.C. The remaining are in California, Massachusetts, Maine, New Mexico, New York, Washington and Vermont.

In the meantime, general interest in green banking continues to grow, with directories and lists being compiled of green-based industries in publications such as the National Green Pages and the Green Money Forum.

Dickson Harrill, executive vice president of Suntrust Bank, said his institution is prepared but advises caution.

“We are for anything that will help improve the environment and keep it clean,” he said. “Alternative energy, cleaner air and cleaner water is a good thing, and we support companies, industries and individuals in that quest. But there’s a business question we have to answer too.

“If someone’s green, we like and support that, and if they have the ability to deposit and invest, we certainly support that. But one thing that’s a holdup (in embracing green banking) is that it’s not financially feasible just yet. It adds a cost to doing business, and we don’t want to push companies to be more green-thinking if that would be an added expense structure brought into the business.

“We do believe that if you’re closer to doing the right thing (environmentally), the financials will work out. But we wouldn’t force anybody to do anything that would cost them more.”

Mark Lattanzio, city president and community banking manager of the Charleston branches of Suntrust Bank, said the six offices the bank opened in 2006 and the nine expected to open in 2007 are “ahead of the curve” in terms of power efficiency.

“We use less electrical power utilizing current technologies, better lighting and lamps and utilizing glass more strategically in our traditional offices,” he said. “We don’t have a specific term for it, but we’ve been practicing green banking in the construction of our offices, making them very energy efficient.

“It’s not necessarily a marketing campaign of ours, but we’re walking the walk. We found it the right thing to do economically and for the environment.”

Other area banks are doing likewise, including S.C. Federal Credit Union.

“We’ve made a conscious decision to make our new operations center (in the initial construction phase on Rivers Avenue) environmentally friendly,” said President and CEO Scott Woods. “And having launched (the union’s new) Business Services (division) last fall, we consider the environmental impact of potential commercial relationships.”

South Carolina’s current ‘green for green’ conservation funding efforts

Although green banking is not mainstream across the state yet, there is precedent for investment in environmental causes.
The South Carolina Conservation Bank Act was the result of a grass-roots initiative to protect and sustain lands in the state as well as the funding needed to acquire various tracts of real estate from willing sellers. Passed by the Legislature and ratified in 2002, funding for the act began in July 2004. Since then, the bank has actively pursued its mission of conserving significant sites.

The heart of the issue is preservation from loss, waste and harm. South Carolina is one of the fastest growing states in the Southeast and the country. A recent report by Rutgers University indicated that South Carolina was tenth in growth nationally and fifth regionally. From 1992 to 1997, more than 100,000 acres per year were converted to urban use. The same report shows that the growth rate from 1982 to 1992 was only 40,000 acres per year.

Other facts noted in the report include:
• South Carolina’s population will grow by 25% in the next 15 years. To support that growth, the area will need 525,000 new houses, 40 million square feet of new office space, 13,000 hotel rooms and 50% more paved roads.
• South Carolina is growing by 130 people per day.
• Farmland acreage has dropped by 34% since 1954.
• South Carolina has lost 12.4 million acres of forestland.
• The state ranks 14th nationally in trip destinations, with 29 million visitors coming into the area and tourists spending $1.9 billion annually.
• Hunters, fishermen and wildlife enthusiasts spend $1.4 billion a year.
• South Carolina currently has 4.5 million acres of wetlands, and 30% of potential shell fishing waters has been closed due to violations of state water quality standards.

South Carolina is not alone on this issue. Other states also have taken steps toward preservation via land acquisition of significant properties:
• Florida has spent $300 million per year since 1990 on land.
• North Carolina is spending $30 million per year on land.
• Georgia is spending $30 million per year on land.
• New Jersey is spending $98 million per year on land.
• Maryland is spending $140 million over five years on land.