Sustainability is turning up new niche areas of business opportunity. One major area is finance. I came across this bank today called – Ekobanken from Sweden. They have squarely targeted the growing understanding among consumers for sustainability and the increasing innovation from businesses in this field.
This is created in the form a member bank or what in Australia can be called a credit union with the participation of consumers as members or shareholders in the bank. In essence, the goals of users and owners are the same.
They work in the areas which increases social, environmental and cultural initiatives for a sustainable society. It says, “The public good and the benefit of our members is our main driving force and the reason why Ekobanken finances initiatives within the social economy. We are also interested in sustainable business that takes the environment and human being into account.”
In order to target the areas of finance which their members want; Ekobanken has created a unique set of accounts which use the deposits in these accounts to fund projects in that area. For example: savings in the Ecology Account “are used for loans to alternative energy, ecological and biodynamical agriculture, conservation, research and other ecological projects” whereas savings in the Culture account “finances loans to culture houses, artistic projects, community colleges, publishing, production of periodicals and adult education.”
At the time of joining the bank, members can choose to inform the bank to use their bank in all of their initiatives or as the example above suggests to a particular target area. These areas are broadly classified into Ecology, Culture, Healthcare, Child and Youth, The Way Out, Fair Trade and Sustainable development in the local area.
In the area of reporting they are very, very transparent. They produce a loans report every year, (latest is 2006, PDF Download) which takes a few areas of their work like Food, Pre-school and Micro-credits in the 2006 edition and explain their thinking in that field, examples of projects that they have funded and some links. At the end of the report they provide a list of all the projects that they have funded in each of the target areas. An amazing degree of transparency for a bank.
In terms of financial performance, the bank has been growing its deposits steadily, in fact almost doubling in the five years ending 2006; operating revenue growing a decent pace and profits more than doubling in the same period.
The banks vision, theme, products and marketing are all centered around the growing sustainability sector. A fine example of innovation and working in a market niche in this area.