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Environmental Bank in NW Supports Green Initiatives
A new bank in a seacoast town on the mouth of the Columbia River in Washington State is taking a cue from urban experiments that use seed money to regenerate communities. The difference is in the definition of community. In this case, shellfish, salmon, forests and dunes are part of the ecological brew to be considered when it comes to deciding who and what will benefit from seed money. Dubbed the country's first environmental bank by its parent, SouthShore Corporation of Chicago, ShoreBank Pacific of Ilwaco, Wash., is currently reviewing its first batch of loan applications from businesses eager to use new technology to benefit both their ecological community and their own cash flow. According to ShoreBank's spokesman, Edward Wolf, such businesses as salmon fisheries and Dungeness crab harvesters are typical of the applications under review now. The bank, he said, is particularly interested in finding ways to encourage fishery practices that focus on rebuilding certain depleted stocks and that avoid catching stock already classified as endangered. But ShoreBank Pacific is evaluating less typically environmental businesses as well. A dry cleaning company trying to improve its use of environment-friendly solvents is another likely candidate for a little green help from ShoreBank. The dry cleaner's case illustrates Wolf's point that "ShoreBank Pacific doesn't apply a 'green screen,' saying 'only environmentally sophisticated businesses need apply.' We're willing to work with a business not conventionally thought of as an environmental business, in order to apply leverage." Loan officers from ShoreBank will scrutinize each application individually to see if the business's plans are in accord with the bank's ecological mission, Wolf said, adding that their goal is "to bring scientific information to bear as well as traditional evaluation of credit." To keep up with sophisticated innovations in many businesses and on many ecological fronts, ShoreBank works closely with Interrain Pacific, an independent non-profit organization aiding conservation-based development. Interrain provides data for ShoreBank, helping it forecast the effect of changes in business technology and how economic development will impact social and natural environments. According to Wolf, ShoreBank seeks to offer "a whole array of different services to support better environmental management," such as helping businesses assess new equipment, find suitable real estate and acquire other businesses. It is especially interested, he said, in financing entrepreneurial businesses that employ workers laid off because of environmental restrictions, as has happened in the fishing and logging industries. ShoreBank Pacific was spawned when Chicago's ShoreBank Corporation, an innovator since 1972 in urban neighborhood regeneration, joined with EcoTrust, a nonprofit organization based in Portland, Ore. EcoTrust's Web site describes its mission as seeking to foster economic development "in places where community residents are committed to increasing economic opportunities in harmony with their environment." Its regional focus is on the "coastal temperate rain forests of North America," a bioregion from southeastern Alaska to northern California. According to Wolf, ShoreBank currently has $9 million equity capital raised from investors such as the Ford and MacArthur foundations. He stressed that such foundations "support the bank as investors, not grantors." ShoreBank also accepts deposits from large commercial banks, which earn the bigger banks credit in the Community Reinvestment Act, a federal law designed to encourage banks to become more community oriented. Altogether, ShoreBank is approaching $10 million in deposits, according to Wolf. Long-range prospects include underwriting innovative efforts in environmental waste management, fishing, forestry, biology and ecology, as well as real-estate development, according to Wolf. "There is not a whole lot of environmentally sophisticated development, for instance, around dune areas or on the coast, but there are opportunities for property developers to be more in synch" with ecological needs, he said. When asked how environmental groups in the region are reacting so far to ShoreBank's ambitions, Wolf said, "There are a lot of people curious about what the bank will do, what tools it will apply. There is currently very little private sector investment in these areas, so there's lots of opportunity."
Posted: May 28, 1998
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