Bank on It

by Jan Marinelli

Doing Well and Doing Good

President Calvin Coolidge once said, “The chief business of the American people is business.”

Many people would still agree with their fellow Vermonter; many others would say that the world is much more complex now than it was in 1925 when “Silent Cal” made his pronouncement.

Vermont businesses now are part of an intertwined global economy. On this international playing field, it’s clear that businesses still need to make a profit or they won’t stay in business for long. But more and more companies are also adopting triple-bottom-line accounting practices, looking at their environmental and social as well as economic goals and the impact the businesses have on these areas.

For example, Waterbury’s Green Mountain Coffee Roasters has been recognized by Business Ethics magazine as the most socially responsible business in the country, besting companies like Timberland, Apple Computer and The Gap. About the same time, Fortune Small Business magazine recognized Green Mountain Coffee Roasters as one of the fastest-growing companies in the country.

This is not a coincidence, but an example of how sound business practices can not only coexist with, but also thrive as part of, a socially responsible long-term strategy.

For many companies, a compelling reason for including more socially responsible business practices is that the customer of today has different, often more complicated, goals than just saving or making money.

Socially responsible investing is growing, accounting for nearly one out of every 10 dollars (more than $2 trillion) under professional management in the United States in 2005, as tracked by Nelson Information’s Directory of Investment Managers. Mainstream money managers have taken notice, increasingly incorporating social and environmental factors into their investment recommendations.

So what can a business owner do to attract these sophisticated investors and customers?

• Start with your employees. Talk to them about their social and environmental priorities, and then incorporate their feedback into your business plan. You’ll gain valuable insights, increased loyalty and fervent ambassadors for your company.

• Check your sources. You may find that you can get better value from a socially responsible supplier.

• Talk to your customers. Once you know their priorities, you can adapt your business practices. The question for customers should not be, “Would you be willing to pay more if we made these changes?” Rather, the question for many has become, “Would you stay on and increase your business with us if we made these changes?”

• Be a part of your community. Shut your doors for a day and spend the time helping a nonprofit; donate a portion of your profits back to the community; put your money where your values are. Your employees, your customers, your community and your business will benefit.

• Conduct an energy audit. You’ll likely find that investing in energy-efficiency measures will not only benefit the environment but also save your company money.

• Whenever possible, buy local. Shipping things here from halfway around the world may appear to be cheaper, but make sure you consider the negative environmental impact of transporting goods across datelines and the positive impact of boosting the local economy.

It really is possible to create a win-win-win socially responsible business plan. You can help preserve the environment, foster societal goals, and — of course — make money.

Stepping into my world of community banking for a moment, here are two concrete examples of how bringing together environmental, social and economic goals can work well.

• Invest in affordable housing. Providing funding for affordable housing creates jobs while building the local work force. If the housing is built in a downtown location, the investment can help revitalize the community and the businesses that serve it while avoiding sprawl. Finally, the equity investment and the federal tax credits make for a very sound deal.

• Don’t just save the family farm, make it better. Invest in creative, renewable projects on the farm such as biomethane digesters. The biomethane digesters will help keep smaller farms in Vermont viable, and they’ll prevent phosphorus buildup in our lakes and streams. From the bank’s perspective, approving a loan for this type of project makes money and makes sense.

More than 80 years ago, Plymouth native Calvin Coolidge probably could not have guessed that such seemingly simple and basic needs as shelter (affordable housing) and food (the modern family farm) could be so complicated.

Today’s business owner in Vermont needs to take into account not only the economic health of the organization, but also how the business’s environmental and social goals can contribute to (or degrade) its bottom-line success. •

—Jan Marinelli is the director of community services at Chittenden Bank.