Global Profit And Global Justice

Excerpt from the book
by Deb Abbey
(New Society Publishers)

2004

To laugh often and much,
to win the respect of intelligent people and
the affection of children,
to earn appreciation of honest critics and
endure the betrayal of false friends,
to appreciate beauty,
to find the best in others,
to leave the world a bit better,
whether by a healthy child,
a garden patch,
or a redeemed social condition;
to know even one life has breathed easier
because you have lived.
This is to have succeeded!
- attributed to RALPH WALDO EMERSON

You probably wouldn't expect to see this quote in a bank's annual financial statement but that's exactly what you would find, and much more, in Wainwright Bank's 2002 Annual Report. More specifically their report opens with "Wainwright Bank remains committed to all of our stakeholders -employees, customers, and communities - who have always shared an equal place at the table alongside stockholders." When we went looking for a social leader in the financial services sector, we had to go all the way to the W section to find probably the best example in banking.

Wainwright (WAIN on the Nasdaq), was founded in 1987 as a private bank, a kind of the "boutique" approach to banking, but within a few years its cofounders, Bob Glassman and John Plukas, decided that they wanted to merge their personal beliefs with their business model. In the early 1990s the vision was just beginning to form as they decided to "contemplate a second bottom line, a noble social experiment, if you will."

The vision took form quickly. In 1991, the bank made its first community development loan – to the Pine Street Inn women's shelter for rehabilitation of the facility - which seemed to spark the interest of a new wave of socially conscious depositors. Who could foresee that doing the right thing would lead to more business? Wainwright's celebration of their first decade of socially responsible lending has come and gone, and today their vision is clearly spelled out in a mission statement that resets the bar for the banking industry.

In their mission to include all their stakeholders, Wainwright has seven main focus areas, which they address both through conventional banking initiatives such as project financing and personal banking services, and through charitable giving grants. It is their version of conventional banking that sets a standard for others to look to in these areas:

Affordable Housing
This is an obvious area for a bank and Wainwright has committed some $75 million in financing to a wide range of housing projects in the Greater Boston area - affordable low-income housing, elder housing, homeless women and children housing, realize that this is a small bank with a market capitalization of less than $50 million.

Health Services
The focus here has been the HIV/AIDS epidemic. Their lending and deposit activities with a number of related non-profits have also been key.

Environment
The bank's environmental policy is short and to the point. The proof is in the proverbial pudding in their actual partnerships, including The Earthwatch Institute, the Union of Concerned Scientists, the Silent Spring Institute, and many others. Operating lines of credit, building financing, and endowment investment activities are the typical services provided. Wainwright is one of a relatively small group of 70 companies who are signatories to the CERES Principles. On a consumer note, their Green Loan program nets you a one percent rate reduction for home equity loans to install solar technologies.

Homelessness and Hunger
Wainwright has provided $15 million in loans since 1991 to service providers to the homeless and hungry.

Women's issues
Wainwright's approach has been primarily education-based, helping women become financially empowered as well as establishing close banking relationships with various organizations related to women's health and rights.

Diversity
Fifty percent of the bank's officers are women, and 30 percent of the total workforce is composed of employees from visible minorities who, amongst them, speak 22 languages.

Social Activism
Lastly, but perhaps most importantly, Wainwright believes that "the management of one's financial affairs is not a morally neutral endeavor; where you invest your money, and who you buy your goods and services from can influence social conditions. If not for the power of shareholders to influence the investment policies and internal practices of the corporations they own a piece of, Nelson Mandela would probably still be imprisoned and apartheid would still exist in South Africa." Wainwright has a number of initiatives in this area, the most telling of which was their 1997 acquisition of a 30 percent stake in the Trillium Asset Management Company. You may recognize Trillium's name as a frequent filer and co-filer of social and environmental shareholder resolutions. Trillium is the oldest and largest investment management firm specializing solely in socially responsible investment with an eye to leveraging capital for real change.

The Big Banks: Small Changes With a Large Impact
But as I noted, Wainwright is just a tiny player in the international banking community, so we also went looking for social leaders of a bigger scale. While their policies will not even come close to Wainwright's example, the sheer size of their operations translates into large potential impacts for relatively small steps. Let's briefly look at two of the big ones, Royal Bank of Scotland (RBS on the London Exchange), and Union Bank of Switzerland (UBS on New York of UBSN on the Swiss exchange).

To put this in perspective, both of these banks are three orders of magnitude larger than Wainwright, or well over a thousand times the size as measured by market capitalization. So if they did even five percent as much in the direction of positive social change – well, you can do the math yourself. And the good news for Wainwright is the sheer scope of the growth opportunity should they choose to go in that direction!

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