Posted 03.02.2017

What New Resource Bank Won’t Finance

Photo credit: Brina Blum

You know what we do finance, but here’s an inside look at the deals the banks turns down!

New Resource Bank clients are familiar with some of the socially and environmentally responsible businesses and organizations that the bank helps finance: Cowgirl Creamery, One World Play Project, EO Products, Amazon Watch—the list goes on. But which companies don’t make the cut, and how does New Resource decide?

New Resource Bank’s mission declares:

We see money as an agent of positive social, environmental and economic change and use banking to transform the economy into one that serves all people and the planet. We lend to organizations that benefit our communities and preserve our planet by putting deposits to work for good.

The bank works in four areas of impact: environmental protection, health & wellness, education & community empowerment, and sustainable commerce. All loan applicants must complete an Impact Assessment so that the bank can determine the social and environmental sustainability of their work in at least one of these areas. Robert S. Holden, Chief Lending Officer, explained, “We look at all loans in terms of their potential impact and their alignment with our sustainability targets and impact areas. Ultimately, we want to ensure that all of our financing has a positive impact.”

Criteria that would immediately exclude a company from New Resource funding include being a fossil fuel business, a polluter or using any resource wastefully. For example, the bank turned down a project to fund a gas station’s installation of solar panels on its canopies, along with some additional working capital. After discussing the project internally, the bank ultimately decided not to proceed with the loan despite the strength of the deal on a strictly financial basis. “The primary area of business was in an industry that does not align with our values,” Holden said. “While the financial viability of loans is an important criterion for us, equally important is the impact that a loan has on people and the planet.”

Another loan prospect that the bank chose not to pursue was a poultry farm that wanted to fund an anaerobic digester. The digester would help process manure in a way that controlled the production of heavily polluting methane gas, creating a new fuel source in the process. However, once the bank began considering the farm’s industrial scale feedlot operations concerns arose that it might not be raising the animals humanely.

Other types of businesses or organizations that the bank declines include those that:

  • Incite hatred or promote exclusion
  • Support or promote harm to others
  • Do not consider or respect their impact on the environment, the community they serve, or their stakeholders

Holden says that when evaluating a potential client, “The mission fit always comes first. We need to be comfortable that a client’s business aligns with our mission. Only after that do we evaluate their credit criteria.”

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