In the past, nonprofits, universities and some government bodies were the most likely to adopt a green initiative. Over the last few years, some fairly large financial services companies have researched, and discovered how cost effective the benefits of implementing environmentally and energy conscious design really can be.
“Companies like to be able to say they are green, and the halo effect is even more appealing when it saves money,” says author Marc Gunther in “Who’s The Greenest Bank of All?” article in Building Design and Construction; which may explain why green architecture and eco-friendly updates are rising.
Just look at Banner Bank’s building in Boise, Idaho. It is currently the only bank that has achieved Leadership in Energy and Environmental Design (LEED) platinum status. It’s a smaller institution in the Midwest, but it’s committed to contributing to the green efforts of the industry. Recently, Bank of America® stepped up its greening efforts and intends to construct a new eco-friendly building in Manhattan. Once the project is completed it may be the first skyscraper to obtain the highest LEED rating of platinum.
Although some financial aren’t building new constructions, there are many who have simply updated current ones to comply with green standards. For instance, PNC Bank® has more buildings (42) certified by the U.S. Green Building Council than any other company, regardless of industry. And in November of 2007, the U.S. Patent and Trademark Office granted a trademark for the term "Green Branch" to Pittsburgh-based PNC Financial Services Group Inc. "The trademark is affirmation of PNC's leadership in 'green' business practices during the past decade. Our commitment to significantly reduce our impact on the environment has enabled us to lower costs, increase efficiency and productivity as well as enhance the communities where our customers and employees live, work and play," admits Gary Saulson, director of corporate real estate.
But going green isn’t only about eco-friendly architectural design; it also applies to companies’ business practices as they relate to consumers, technology and overall processing. That’s why banks and credit unions alike are offering green products in the form of mortgages, small business loans, and so on. They realize the green issue applies to everyone and that a greater impact can be achieved if they continue to incent customers to follow suit. It reinforces their community ties and can improve their overall public appeal.
In a new report by strategy consultants Oliver Wyman, the financial industry is well-positioned to cope with climate change and environmental matters, due to its risk expertise and capital mobility. It’s their ability to hedge business risks, quickly develop new products, and invest in new markets that primes the sector for green-related opportunities.
The report also notes that institutional banking and asset management will see the strongest upsides, with new carbon markets, growing demand for hedging innovation to manage energy prices and changing weather patterns, and clean tech financing and advisory revenues—a potential investment of $225 billion a year by 2016.
Efforts towards taking advantage of green opportunities first began with using recycled products, offering remote capture, and employing paperless automation processes. As one would suspect smaller banks and credit unions in the U.S. are still working to implement these elements, in an effort to catch up. Once they do, the contribution could be substantial.
Curious about just how considerable the contribution could be?
Remember that each of these products do not require new trees to be cut down, utilizing them would save landfill space, and minimize the amounts of toxic chemicals, including methane gas, released into the atmosphere as paper decomposes. Moreover, if every U.S. Household viewed and paid bills online 2.3 million tons of wood (16.5 million trees) will be saved annually, according to Tekrati (an analyst reporting service) and Javelin Strategy and Research.
That’s a astounding.
When you think about facts like, the largest global financial services organizations have carbon footprints in the region of 500,000 metric tons of CO2/per year, and an institution’s IT electricity consumption can be responsible for up to 65 percent of the total (Bank Technology News), it puts things into perspective.
So what’s holding smaller institutions back from joining the cause? Money perhaps, but when one begins to look at the long term savings benefits and customer appeal gained, isn’t it worth it in the end?
Thankfully, financial services companies already in the know aren’t worried about the costs as much as one would think, because they “know” they are actually saving money—due to waste reduction, and energy efficiency. In addition, some of the expense can be passed on to the customer.
And interestingly, some customers may not mind.
A recent survey conducted by IT hosting specialist Rackspace® Managed Hosting found that 62 percent of respondents are looking for ways to reduce the impact their company has on the environment. The survey also reported that that many customers are willing to put their money where their mouths are—52 percent of survey respondents are willing to pay five to 10 percent more for green products or service offerings rather than non-green options and 51 percent are willing to trade five to 10 percent of server performance for lower carbon emissions.
Principal Analyst at Gartner, Richard J. De Lotto declared that most financial institutions will focus on green IT through 2012. With excuses getting old, most institutions realize the inevitable is near.
