A joint initiative between Boston University’s Center for Finance, Law & Policy and its Institute for Sustainable Energy aims to put climate change high up on the next president’s agenda – and it’s soliciting the banking industry for ideas.
The project is headed up by Cornelius K. Hurley, director of the Center for Finance, Law & Policy and a professor of banking law, and Peter Fox-Penner, director of the Institute for Sustainable Energy and a professor of practice in the Questrom School of Business. Together, they have two grad students working on a white paper they hope to deliver to the next president that would outline a series of actions he or she could take to fight climate change – without going through the presently dysfunctional Congress.
“This project really lies at the intersection of law and finance policy and sustainable energy policy, so it seemed like the perfect collaboration for our two centers,” Fox-Penner told Banker & Tradesman. “It’s in both of our sweet spots.”
Importantly, those actions relate specifically to the financial sector, Hurley said. The next president could, for instance, appoint regulators who would prioritize climate change. One example might be giving banks heavier weight for investing in energy efficient upgrades in low- to moderate-income areas when their CRA exams roll around.
The project is still in its infancy, but the team has already learned of a letter sent by some of the nation’s foremost energy conservation groups to the Federal Housing Finance Agency in response to a proposed rule on serving underserved markets. In it, the organizations support an FHFA proposal to give the government sponsored enterprises “duty to serve” credit for financing energy efficiency improvements, and they urge the agency to require new homes meet certain energy efficiency standards in order to pass muster by Fannie or Freddie.
“What this did tell us is that the nexus between improving the nation’s housing market and improving our energy and climate goals is there, that there is an overlap in these two national priorities,” Fox-Penner said. “We have two really important national needs; one speaks to housing and making housing more widely available and affordable, and the other speaks to meeting the challenge of climate change.”
Wanted: Bankers’ Input
Hurley, Fox-Penner and their team have been traveling to New York and Washington, D.C., meeting with senior regulators and bankers to solicit their ideas, but they’re also hoping to tap the banking industry here in Massachusetts for intellectual contributions.
Many Bay State banks have already taken it upon themselves to do what they can to act as responsible stewards of the earth. That can run the gamut from in-house recycling programs to investing in clean energy to building energy efficient branches.
PeoplesBank in Holyoke, for instance, invests into Revitalize Community Development Corp., a Springfield-based CDC that makes energy-efficient upgrades to homes for low-income families, veterans and elderly or disabled homeowners. The bank has also built three LEED-certified branches in the past five years and has developed a niche for lending to sustainable energy projects, said Matthew Bannister, PeoplesBank’s vice president of corporate responsibility.
Even mobile banking can have a positive environmental impact, he said.
“You’re not getting in your car and driving to the bank anymore,” he said. “Even something like that that wasn’t done deliberately to be green may have an impact – it could have the largest impact of all.”
David Dolbashian and Penelope Billington Hunt co-chair Eastern Bank’s Sustainability network, where they work through four committees to work on specific actions, like revamping the company’s recycling programs, offering employees the opportunity to participate in CSA farm shares, and cultivating networks with area nonprofits focused on energy conservation.
For instance, Eastern works with the Climate Action Business Association to offer its small business clients resources to pursue energy efficient upgrades of their own, Dolbashian said.
Hunt said the bank is also currently working to develop a product set to finance solar products for smaller businesses and potentially consumers, and its wealth management arm offers customers a socially responsible investing product.
“Eastern Bank is one of the largest community banks in the state, so we have a significant history of remaining connected to and invested in our community,” she said. “Our historical focus has been on social justice and the environment has been an extension of social justice.”
Some think that’s the way the banking industry is heading anyway. As the markets begin to prioritize clean and renewable energy, so too will the nation’s financial institutions.
“Banks sort of rise or fall depending upon how the economy is doing, and I think the economy is very tied to energy prices,” Bannister said. “I think the pendulum is swinging toward an energy source that is more renewable. As banks start to invest in their communities, it only makes sense that those investments are going to be more and more toward businesses that are driving toward that clean, renewable energy.”
