Company banks on the environment

Local institution lends money to businesses with green habit

By Dawn Weinberger

LocalNewsDaily.com, Sep 12, 2006, Updated Oct 30, 2009

Jonathan House / LocalNewsDaily.com

Dave Williams (left), ShoreBank Pacific’s chief executive officer, and President Mark Coffey don’t work for an ordinary bank; theirs scores on sustainability.

Most business loan applications are designed to uncover things like credit scores, debt-to-income ratio and financial red flags.

ShoreBank Pacific takes it one step — OK, several steps — further. In its dealings with clients, the loan officers want to know what Marcy from the mailroom does with all those paper scraps, whether Jim the janitor remembers to turn off the lights when he locks up for the night and how many employees bike to work.

That’s because ShoreBank, based in tiny Ilwaco, Wash., with an office in the Pearl District’s Ecotrust building, says it is as concerned about the environmental impact of day-to-day activities as it is about fiscal assets (the company primarily serves small businesses, rather than individuals).

“We score the business based on sustainability,” said Lucy Brehm, ShoreBank’s sustainability officer. “Then it goes to committee, and it is either approved or not approved.”

The scoring isn’t the least bit arbitrary. ShoreBank developed what it calls the Natural Steps program, which allows the committee to see, on paper, how an applicant is doing in terms of cash, conservation and community development.

Within the three categories are several subcategories, each of which receives a rating between zero and three. A rating of zero means the company isn’t doing anything to promote sustainability in that category. For example, not recycling.

When a business is heavy on the zeros, it doesn’t automatically mean its application gets tossed in the reject pile, Brehm said.

“We talk to them about what the issues are,” she explained. “We give them (information) and have discussions.”

Most are willing to at least explore the idea of improving sustainability, said Dave Williams, ShoreBank’s chief executive officer.

Clients get a chart, broken down by level of complexity — easy steps (turning off computers when not in use, using safe cleaning products), steps that take planning and some money (using motion sensors for lights, providing transit passes to employees) and steps that require a larger investment (using only local sources for goods and services).

Businesses make strides

There are enough environmentally minded organizations in the Portland area that some clients don’t need this so-called “green consultation.” They seek out ShoreBank because they share similar values.

Ethos Music Center, a nonprofit in North Portland that provides music education to youths who don’t get it in school, is one such organization. Founder Charles Lewis needed a loan to help finance the purchase and renovation of a new headquarters building, and he turned to ShoreBank for help.

“We chose them because of their commitment to the environment and the community,” he said. “We would not have this building if it weren’t for them.”

Ethos’ new building is an old Masonic temple, on North Commercial Street. Though Lewis still has money to raise before he and his team can move forward, his goal is to achieve platinum certification from Leadership in Energy and Environmental Design, a voluntary rating system for sustainable buildings.

Lewis said he intends to use as many local building products as possible, and he has selected architects and contractors with a similar commitment to environmental responsibility.

ShoreBank, which also helped Ethos develop fundraising strategies, was the only financial institution that expressed interest in the project, Lewis said. As a result, Lewis went to ShoreBank right away when he and his wife, Sarah, decided to start up a local tour company.

Their new venture, the Portland Ducks, offers land and water tours around local roadways and rivers. The Ducks’ fleet of vehicles is 100 percent biodiesel, and tours incorporate local environmentally friendly landmarks (such as the Mark O. Hatfield U.S. Courthouse, known for its ecoroof) and environmental education.

Loyal clients like Lewis have helped the bank grow in the past several years. Founded in the late 1990s as a partnership between ShoreBank Corp. of Chicago and Ecotrust, a local nonprofit group that promotes environmental consciousness, the bank’s assets have grown from $10 million in 2000 to $155 million today.

Loans grew from $2 million to $166 million in the same time frame, Williams said. This put the company in a position to start offering other services, like accounts for individuals. Known as the EcoCash program, the accounts are essentially paper-free checking accounts.

“We set up a structure that discourages writing checks,” Williams said.

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