Peter Blom made a radical career move for a self-described “Marxist anarchist”: He became a banker. “I realized you could really change things when you were changing the flow of money,” says Blom, now chairman and CEO of Triodos Bank, in the Netherlands. “I wanted to show that banking could have a strong social role in society.”
Blom, who was one of Triodos’s first five employees back in 1980, has finally proven his point. While mainstream bankers earned their billing as the villains of the global financial meltdown, Triodos has become the model for what a bank with a conscience can be. With its focus on, as Blom puts it, the “real economy,” the Dutch bank — which has branches in Belgium, Germany, Spain, and the U.K. — lends only to enterprises that benefit society and the environment, ranging from green technology and fair-trade businesses to community health clinics and organic farms. Loan officers reject companies that distribute or produce nuclear energy, weapons, or environmentally hazardous substances, as well as those with as little as 5% of their activities in areas the bank defines as “nonsustainable,” including the fur business, gambling, and genetic engineering.
Blom’s focus on the marathon instead of the sprint is paying off. Since the Great Recession began, Triodos’s business — which includes savings and investment vehicles for individuals as well as services for businesses and charities — has flourished. Funds entrusted to Triodos increased almost 15% during the first six months of 2009. Over the same period, the bank’s loan portfolio grew by more than 12%; its balance sheet hit $3.69 billion, up some 13%; and its operating profit rose 50%, compared to the first half of 2008. “People are looking for simple business models they can trust,” says Simon Zadek, senior fellow at the Center for Government and Business at Harvard’s Kennedy School. “People running banks like Triodos are not in it to become billionaires, so at a very gut level, people know the bank isn’t taking unnecessary risks with their money.”
But customers don’t have to rely on instinct because Triodos opens up the black box. A public Web site that’s searchable by postal code, company name, sector, and keyword lets anyone track any of its 9,000 loan recipients — say, the Gortbrack Organic Farm in Ireland or German wind-power developer EnergieKontor. Such transparency reassures depositors like Tjakko de Boer, a 43-year-old small business owner in Holland. “After the crisis, I shifted even more of my savings over to Triodos,” he says. “They only invest in real companies that do real things and not imaginary businesses.”
Last year, the Financial Times and the World Bank’s International Finance Corp. named Triodos “Sustainable Bank of the Year,” outranking 165 other financial institutions and piquing interest beyond the granola fringes. But, as Zadek points out, “impatient funds trading on short-term margins and young spotty traders competing with each other” still dominate global finance. Which is why Triodos teamed up a year ago with 10 other ethically minded banks to launch the Global Alliance for Banking on Values to promote triple-bottom-line thinking in the sector. “Triodos’s focus on sustainable development has demonstrated that you can build a model that is centered on these principles,” says Laurie J. Spengler, president of ShoreBank International, a U.S.-based Global Alliance partner. “We’re saying this is more than just a window of opportunity for traditional financial institutions.”