Summit Outcomes - “Migrants, #MeToo, and Melting Icecaps… Redefining Banking for a Radically... by Global Alliance for Banking on Values

Global Alliance for Banking on Values

Summit Outcomes “Migrants, #MeToo, and Melting Icecaps… Redefining Banking for a Radically Different Future” Vancouver, Canada March 2019

A message from Peter Blom and Tamara Vrooman There are moments when it is important to stop and take stock, to look back at how far we have come and look forward to what we still need to achieve. The GABV Summit 2019 in Vancouver was such a moment. We brought our members, stakeholders, next generation leaders, regulators and a wider community of values-based banking activists together to consider: “What is the future of finance that we want to see, given the challenges we face?” and “What will we, as banks, need to do within our wider community to design and play a role in such a future?” The first response to the question at the Summit was to recognise that no matter how the future plays out, we can have a role as a movement of banks, but only if we listen to the ideas and draw inspiration from those who can help us to anticipate a radically different future. The work of Indigenous Elders, our panel experts, presenters and community members in small-group breakout design exchanges can be seen in the pages of this ‘field guide’ for valuesbased banking. The GABV is more than the sum of its members. The world asks, like never before, that the stewards of money take an active role, to guide where and how money can have the greatest impact in driving transformation. Through the GABV, we are close to our goal of touching one billion people and the social, environmental and economic issues that involve them. Through our positive collective experience, our aspirations going forward are only limited by the time and energy we are willing to commit. The Summit made the cost of inaction clear. If we do not redouble our efforts, future generations will see us as co-conspirators, collaborators in a divisive system of haves and have nots, of exclusionary politics built on a

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zero-sum game. We have begun to lay a different path for others to follow. And followers will only come if we continue to lead and provide a compelling vision, connecting the dots between where we are now and where we want to be in the next 10 years. With the support of our CEOs at the Summit, we have described the lines on the horizon that will guide our next steps. Second, our legacy as a movement is grounded in our Principles of Valuesbased Banking, and the tremendous work we have done to build a community of practitioners and activists working on measures, methods and membership commitment. We must accelerate our efforts to embed the GABV Principles and metrics in each of our banks. We must guide our regulators in different regions through persuasive narrative and community activism at all levels of government. Regenerative capitalism will not be built in a day, but through the momentum we have in our wider community of impact. We are already starting to see that we can affect a profound shift in consciousness and commitment. We hope that the following pages give you an â&#x20AC;&#x2DC;aide memoireâ&#x20AC;&#x2122; of our remarkable time together and encourage you to actively reach out to your GABV colleagues and wider community for help, inspiration and ideas.

Thank You!

Peter Blom Board Chair, GABV CEO, Triodos Bank

Tamara Vrooman Board Vice-Chair, GABV President + CEO, Vancity

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A message from book editors “Migrants, #MeToo, and Melting Icecaps … Redefining Banking for a Radically Different Future” was not just another conference, nor was it just a celebration of 10 years of the values-based banking movement. It was a turning point. If we look at the evolution of banking over the last few decades, we can see how, in general, banks focused their efforts on creating short-term value for shareholders and providing high remuneration for their C-suite executives. In parallel to that focus, banks have become more distant from the real needs of their clients and have used their clients as a means for making money. This is not a sustainable way of providing banking services. This way of thinking in the financial sector brings us to the collapse of the economic system and to an increase in inequality, broadening the substantial divides that threaten our societies. At the summit, we revisited the essence of banking and its role in society. Banks have to intentionally identify the real needs and challenges of humankind and find financial solutions for people that also provide respect for human dignity and respect for the environment at their core. At the Summit, we explored ways to address three of the biggest global challenges today—displaced peoples, gender equity, and climate change—and build a financial system that is part of the solution, not a contributor to the problem. This book summarises the conversations and conclusions of the Summit, where more than 600 experts from all over the world (bankers, civil society activists, regulators, media, academicians and youth leaders) came together to redefine a banking system that is in service of all. It follows the structure of the Summit. For each one of the three main challenges in our societies, the audience split into several small-group breakout design

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exchangess. There were 36 different groups, each one addressing a specific dimension of the challenges from a banking perspective. In this book we have summarised the outcomes of these groups to facilitate reading and action. The Summit was a turning point, and this book captures why: We have to find a way to transform the banking system of the last few decades into a system that is grounded and led by values-based principles. It gives reflections and offers practical recommendations on how to foster this change. It is not only an interesting reflection on the role of the economy and banking in a world in which human dignity and the conservation of our planet should be the driving factors. It is also a practical guide on what different playersâ&#x20AC;&#x201D; values-based bankers, regulators, the media, academicians and civil society actorsâ&#x20AC;&#x201D;should do in order to accelerate this transition. We include many quotes that are taken from the conversations during the panel and design exchange sessions, and therefore we are not crediting these quotes to anyone in particular. We hope that you enjoy the book, circulate its content and recommendations, and use it in your own corner of the world to help us transition as quickly as possible towards a values-based banking model.â&#x20AC;&#x192;

Thank You! Marcos Eguiguren Paula Martin Tom Cummings Jasmin Panjeta

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“We, as a bank, want our resources to benefit everyone and harm no one”. Kat Taylor, CO-CEO Beneficial State Bank

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Content 08 Global Alliance for Banking on Values

18 The Summit 26 Connect 58 Disrupt 86 Transform 111 Conclusions

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GLOBAL ALLIANCE FOR BANKING ON VALUES

LEARNING JOURNEYS

CHAPTER ONE

Global Alliance for Banking on Values

n the early part of this century, many conversations, cross-investments and cooperative initiatives took place among several socially, environmentally and

culturally conscious banks throughout the world. An intense and wide-ranging debate about the meaning and purpose of banking had arisen for some years prior to the global financial crisis of 2007. With that financial crisis, the critique turned to capitalism itself, with media headlines posing questions such as “Crisis in capitalism?” and “What’s wrong with capitalism?” Criticism specifically targeted the dominant international financial system and business models, questioning the role and activities of banks. Questions focused on how banks generated their returns and about how they shared their returns with their stakeholders, including customers, investors, co-workers (especially senior management), and more generally with wider society. While this debate has continued without reaching a resolution, a group of banks around the world has for some time been answering many of these challenges by delivering strong, straightforward and sustainable banking services focused on a values-based banking model.

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Values-based banks have consistently delivered products and services to individuals and enterprises in the real economy delivering social, environmental and financial returns. Their focus on the real economy rather than on the financial economy is a core element of their business models. These banks demonstrate decades of responsible banking and a consistent commitment to productive economic activity. They have increased their activity during the present recession, expanding their lending to small and growing businesses. Committed to providing a broad range of banking services to the real economy over the long term, they highlight the powerful role of values-based banks as stewards of prosperous, equitable and inclusive capitalism. Many of these values-based banks have been in business for a few decades, others for far longer. Their models of providing long-term, patient and sustainably profitable banking services have been at the heart of some of the worldâ&#x20AC;&#x2122;s most successful economies. The vital role that these banks play in real economic development is increasingly recognised in the debate over how to restructure local and global finance. The evidence of their success suggests a renewed emphasis in public policy, and by investors, on how values-based banks can provide a long-term path for responsible banking and economic development1 . Such models of responsible banking are proving necessary to support a more just, environmentally sound, and sustainable economy, essential to fostering social solidarity and human well-being. In 2009, seeking to provide support to the Values-based Banking model as an alternative to the banking models that led to the financial crisis, three values-based banksâ&#x20AC;&#x201D;BRAC Bank (Bangladesh), Shorebank (USA) and Triodos Bank (the Netherlands) founded the Global Alliance for Banking on Values. Their aim was to contribute to the growth and development of social and environmental renewal in the global banking system by:

Real Economy â&#x20AC;&#x201C; Real Returns: The Business Case for Values-based Banking (2018)

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a. Thought Leadership. Building additional capacity to overcome current social, environmental and individual human development challenges for our communities, by combining the strengths and diverse experiences of valuesbased banking professionals at a multi-local, regional and global level. b. Solidarity. Bringing together the Chief Executives of licensed banks who, through direct engagement, would find and exchange ideas about operating methods, organizational structures, new forms of ownership and ways of further economic and social cooperation. c. Practical Solutions. Combine different levels of senior management – directors, functional management and young leaders to improve values-based banking practices, create new tools and methods and look for best practices beyond financial intermediation. The first meeting to discuss forming the GABV took place in March of 2009. Ten banks2 were invited to the Netherlands for a meeting and public event. The founding members identified an intent and common purpose to: •

understand and express shared intent through common and individual

initiatives designed to create, through action, bonds between members; •

welcome and seek out a diversity of banks who shared common values,

from different geographies, histories and banking models, recognizing that this would be an important contributor to learning and clarifying what we mean by values-based banking; •

develop a common way to define and assess “values-based banking”

so that all member banks could make use of and apply a scorecard to themselves and to future members; •

recognise the importance of being thought leaders in the banking

industry and develop ways to express our way of banking through common and individual bank initiatives; •

agree that our impact on the banking industry would come through

growing and developing successful banks, recognising that common values are a necessary but insufficient condition for success; and •

sustain the alliance through CEO commitment to actively participate

in the meetings and initiatives of members. 2 Triodos Bank, Shorebank, BRAC Bank, Mibanco, Alternative Bank Switzerland, Merkur Bank, GLS Bank, Banca Etica, New Resource Bank and XacBank

Values-based banks have consistently delivered products and services to individuals and enterprises in the real economy delivering social, environmental and financial returns.

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At the first meeting, there was far from common agreement about the agenda of the GABV. Some banks had a distinctly green orientation, some focused more on values and culture, and some were more committed to social inclusion. Some banks had been working for decades on their banking model, while others were just getting started. All were committed to economic development based on a set of conscious values that recognised the importance and potential of money as a tool and driver of transformation, and all agreed on the importance of learning and growing together as a movement. It was agreed that the Global Alliance for Banking on Values must deliver on its goals through clearly defined activities, annual meetings and public events. It also would collaborate with key partners to further its work. The GABV continues to build on the Principles of Values-based Banking, previously referred to as the Principles of Sustainable Banking and Finance. Since its founding, the GABV has been clear that a set of shared principles was needed to distinguish, in the minds of customers, partners and co-workers, why GABV banks are different from other forms of banking. The principles answer a number of fundamental questions such as: What is a values-based bank? We are very diverse banks, so what do bank members have in common? How do we demonstrate these principles in the culture of our banks? It was clear that for most mainstream banking institutions, the primary or exclusive driver of business decisions was based on the profitability of the services provided, even if the by-products of those decisions did not deliver sustainable economic, environmental or social development. For GABV members, business decisions start by identifying a human need to be met, and then establish how to meet that need in a way that is sustainable from an environmental, social and economic perspective, including sustainable profitability for the bank. It was agreed that to be a member of the GABV, each bank would commit to the following principles:

â&#x20AC;&#x153;Imagine when you go to sleep at night that your money flies out of your purse and travels around the world. Where do you want it to land? Where can your money do the most good?â&#x20AC;? Vince Siciliano, former CEO New Resource Bank

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Principle 1. Triple-bottom-line approach at the heart of the business model. Values-based banks integrate this approach by focusing simultaneously on people, planet and prosperity. Products and services are designed and developed to meet the needs of people and safeguard the environment. Generating reasonable profit is recognised as an essential requirement of values-based banking but is not a standalone objective. Importantly, values-based banks embrace an intentional approach to triple bottom line businessâ&#x20AC;&#x201D;they donâ&#x20AC;&#x2122;t just avoid doing harm, they actively use finance to do good. Principle 2. Grounded in communities, serving the real economy and enabling new business models to meet the needs of both. Values-based banks serve the communities in which they work. They meet the financial needs of these geographic and sector-based communities by financing enterprises and individuals in productive and sustainable economies. Principle 3. Long-term relationships with clients and a direct understanding of their economic activities and the risks involved. Values-based banks establish strong relationships with their clients and are directly involved in understanding and analysing their economic activities and assisting them to become more values-based themselves. Proper risk analysis is used at product origination so that indirect risk management tools are neither adopted as a substitute for fundamental analysis nor traded for their own sake. Principle 4. Long-term, self-sustaining, and resilient to outside disruptions. Values-based banks adopt a long-term perspective to make sure they can maintain their operations and be resilient in the face of external disruptions. At the same time, they recognise that no bank, or its clients, is entirely immune to such disruptions. Principle 5. Transparent and inclusive governance. Values-based banks maintain a high degree of transparency and inclusiveness in governance and reporting. In this context, inclusiveness means an active relationship with a bankâ&#x20AC;&#x2122;s extended stakeholder community, and not only its shareholders or management. Principle 6. All of these principles embedded in the culture of the bank. Values-based banks seek to embed these principles in the culture of their institutions so that they are routinely used in decision-making at all levels. Recognizing that the process of embedding these values requires deliberate effort, these banks develop human resources policies that reflect their values-based approach (including innovative incentive and evaluation systems for staff), and develop stakeholder-oriented practices to encourage values-based business models. These banks also have specific reporting frameworks to demonstrate their financial and non-financial impact.

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Over the last few years, the Principles of Values-based Banking have stood the test of time, and have served the GABV in a number of ways: 1. They were formed as, and continue to be an important part of, the evaluation criteria for the SFRE investment fund initiated by member banks. 2. Together with GABV metrics, they provide clear guidelines for the nomination and selection of new members and partners. 3. They provide a development benchmark for member banks to assess how they are evolving as values-based banks. 4. They provide a common language for member banks and the wider banking industry. 5. They are used, for example, by Islamic banking institutions to clarify and evaluate their missions as values-based banks.

Triple bottom line approach We must work to maintain a balance between the three elements of the triple bottom line with reinforcement measurements and systems that support the banks. This means reinforcing the use of prosperity (instead of profit), as it is inclusive, whereas profit is only one-way. For many banks, planet is the most challenging aspect, as wealthier economies more easily commit to longer-term goals. We must find ways to link environmental well-being with social justice. It’s important that we go beyond compliance with government regulations where possible. A triple bottom line is about the contribution we make to change the world by doing less harm and more good. While profit is a key to resiliency, it is insufficient as an objective. As a movement, we need to continue to understand the practices that lead to a regenerative economy. Grounded in communities, serving the real economy GABV banks should continue to develop ecosystems that focus on renewable energy, agriculture, education and health. We should inspire people to understand the shift from the financial economy, which is tied up in securities and complex instruments, to the real economy, where a large percentage of a bank’s assets are lending money to do good work for people. GABV banks emphasise that the focus of the real economy helps to de-risk a bank’s portfolio and make it clear that we are concerned about supporting communities, whether urban or rural. It’s important to avoid demonising the financial economy, but rather, simply show the benefits of the real economy alternative for generations to come.

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Client-Centred Social inclusion is a very important differentiator for GABV banks, as many banks are narrowing their service offerings to the least well-off through cost-cutting exercises and branch closures. GABV banks make use of technology to support client relationships and engagement with the many low-cost/high-engagement products and solutions emerging. Many customers are bewildered by how the banking system and money work, and this is an opportunity for values-based banks to help people understand the differences in banking value propositions, systems and products. We should ask questions that focus not only on what, but how. Are we fair to the client? Are we using the data in a way that is ethically reasonable? What are our commitments to data privacy and process transparency? How do we support our clients to be included in the emerging data-driven society? How can we shift the focus to seeing clients as partners in our shared commitment to improving the life of their communities? A recent study showed1 that most venture capital goes to companies founded by men versus women, yet women mainly invest in healthcare, education and communication, while men invest in gaming, consumer products and transport. Increased investment in women-led enterprises will have a dramatic effect on the prosperity of the real economy.

1 https://hbr.org/2017/09/the-comprehensive-case-for-investing-more-vc-money-in-women-ledstartups

1 Transparent and inclusive governance;

Transparency

A triple bottom line approach of people, planet and prosperity being at the heart of the business model;

Triple Bottom Line Approach

CULTURE

Being grounded in communities, serving the real economy and enabling new business models to meet the needs of both;

Real Economy

All of these principles being embedded in the culture of the bank.

Self-sustaining organisations with a long term outlook, resilient to outside disruptions;

Long Term Resiliency

Client Centred

Long-term relationships with clients and a direct understanding of their economic activities and the risks involved;

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Long-term resiliency This was an important principle for the development of the GABV, as it propelled the effort into triple bottom line thinking, which is a longer-term proposition. Longterm effort emphasises the need for holistic approaches and focuses on investment as much as cost. There is an inherent tension in this principle, as regulators expect banks to make a profit on capital, a short-term requirement. Our banks must stand on the idea of preparing for longer term disruptions by ensuring the quality of investments and portfolios. Steady growth needs to take priority over wholesale investment in volatile areas. Resilience can also mean having the capacity to bounce back after a trauma. This also means investing in counter-cyclical investments that will not collapse in a downturn. Transparency Does this mean we should publish every loan we make and share our scorecard with everyone? We need to be aware that there are degrees of transparency, yet drive toward openness as a principle that leads to practice. There is a risk of being transparent yet disingenuous, so authentic transparency is essential. As it relates to customers, there is a need to be transparent about the products and services being offered and the fine lines of what those services cost. As values-based banks, we are challenged by the false claims of other banks. We need to challenge where transparency is being misused. Creating honest and open relationships with regulators is also a given in our sector and provides a way to educate them about values-based behaviours that go beyond risk avoidance. Culture This principle is often referred to as the underpinning of all of the other principles, as aligning culture to the principles is a long and iterative process. Co-workers in GABV banks understand that they work for institutions that adhere to a set of principles, yet they are often left to work out the principles in grey areas where answers are not clear cut. Alignment with values and beliefs is one thing. Making them work in practice demands close attention of senior leadership. Fostering a values-based culture in banks requires an understanding of the essence of the bankâ&#x20AC;&#x2122;s mission and how that is played out in daily moments of truth. A large number of people need to be able to describe what the bank does, beyond their job. At

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the same time employees need to be able to describe how their work contributes to the wider mission, strategy and culture of the bank. Diversity and inclusion are not a separate principle, so they must be woven into the development of each bankâ&#x20AC;&#x2122;s culture. A culture is modelled by leadership, which sets the tone at the top. Continuous and visible actions that reinforce that leadership means that the alignment between what it says and what it does is an essential garden to be cultivated. This happens through dialogue, reverse mentorship, engagement, and participation. Leaders can highlight intersectionalityâ&#x20AC;&#x201D;the interconnected nature of social categorisations such as age, race, class and gender. The CEOs of the GABV banks agreed at the Summit to continue to work on the principles and embed them in their daily banking practices. There was support for the idea that these values are embedded in relationships, and therefore it is the nature of the relationships that GABV banks have with public stakeholders, customers and regulators that is their most significant differentiator. Therefore, sharing progress on how different banks are applying and measuring progress on the principles will always be at the heart of the GABV in practice.

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THE SUMMIT: 10 YEARS BACK, 10 YEARS FORWARD

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CHAPTER TWO

THE SUMMIT A

s we enter the third decade of this century, humans face unprecedented challenges. For many years, society has put pressure on governments and multilateral

institutions to solve the many unresolved issues that threaten our existence on Earth. But experience tells us that we cannot only rely on large multi-laterals and governments. Transformation will need a coordinated effort of local, national and global actors, along with many private sector players, together with the commitment and actions of informed citizens. And what about banks? The Global Alliance for Banking on Values, together with Canadian member Vancity, hosted a public Summit in Vancouver, Canada in February 2019. One of the aims was to clarify the present challenges facing our regions, with particular focus on migration, climate change and gender issues, and to design a roadmap for how banking will continue to play a role in resolving these issues (hence the title: Migrants, #MeToo and Melting Icecapsâ&#x20AC;Ś Redefining Banking for a Radically Different Future).

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This occasion also marked 10 years of successful work by the GABV and all its members, as much had been done to achieve changes in the financial sector. All GABV banks are committed to fostering a more inclusive banking system, focused on people, planet and prosperity. A group of 600 bankers, regulators, civil society leaders, academicians and youth leaders from around the world came together for two days to explore and design ways in which the GABV and the banking system can play a radically different role in addressing current global challenges. Representatives from different sectors of society joined to work on banking-related questions. As GABV Chair Peter Blom has often said, â&#x20AC;&#x153;Banking is far too serious to be left in the hands of bankers!â&#x20AC;? Summit delegates generated inspiring and action-oriented ideas and recommendations, built on the three themes of the Summit described below.

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MIGRANTS

Click to watch The aim of this theme was to explore the transformative role of banking as it relates to migrants and social inclusion. Money has no borders, but countries do. As long as there are borders, we are faced with questions of social inclusion, and money plays an important part in that. In the best of times, banks and other financial institutions can find it challenging to get money into the hands of people working in the informal economy or people without an address. GABV banks across the world are unique in their ability to respond to these challenges. Whether for people working in a market in Arequipa, Peru or for newly arrived immigrants in Minneapolis, USA, GABV banks have found creative ways to make banking accessible to migrants and refugees. But more needs to be done to influence governments, encourage civil society, and shift the values of the financial sector to meet the needs of this growing number of people in the short and long term. Our keynote speaker and distinguished panelists of world-leading experts kicked off this session, followed by a rich design exchange where all participants had an opportunity to use their design thinking and prototyping abilities to imagine and create new ways forward. Keynote: Tima Kurdi, Co-Founder, Kurdi Foundation. Moderator: David Reiling, Chairman & CEO, Sunrise Banks. Panelists: Nathan Benson, Legal and Research Director, The Refugee Hub, University of Ottawa; Gillian Barth, President & CEO, CARE Canada; Linda Lopez, Chief, Office of Immigrant Affairs, Office of the Mayor, Los Angeles.

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#MeToo This session explored the transformative role of banking as it relates to #MeToo and the voices of diverse communities. New York civil rights activist Tarana Burke first coined the phrase â&#x20AC;&#x153;Me Tooâ&#x20AC;? in 2006. The movement gained global traction in 2017 when the hashtag #MeToo united victims of sexual abuse, harassment and assault in a discussion of dignity, accountability, power and, ultimately, healing. The movement continued with public revelations of misconduct in the highest ranks of power in the entertainment, corporate, and political worlds. It has since opened wider explorations on how diversity can transform the social and power dynamics within communities, workplaces and institutions. Taking gender diversity and social inclusion seriously in the financial system will mean rethinking basic assumptions about social class, income distribution, wealth dispersion and the focus of economic decision making. GABV member banks have a strong track record of using impact investing and microcredit lending to bring marginalised actors into the financial system, and small business financing and mobile banking is working to reinforce social and gender inclusion. How can the financial system take new initiatives to overcome biases and social injustices that still persist? This set of speakers, panelists and design exchanges showed that there are many more opportunities to make social inclusion a fundamental pillar of banking in the world. This is particularly true for those who have suffered inequalities which have driven them outside the economic system. Keynote: Musimbi Kanyoro, President & CEO, Global Fund for Women. Moderator: Laurie Spengler, President & CEO, Enclude. Panelists: Ebony Harper, Program Associate, The California Endowment; Paul Lacerte, CEO & Co-Founder, Moosehide Campaign; Lisa Mensah, President & CEO of Opportunity Finance Network; Kat Taylor, CEO & Co-Founder, Beneficial State Bank.

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MELTING ICECAPS

Click to watch This session explored how to accelerate the transformative role that banking can play to anticipate and mitigate the effects of global environmental challenges and climate change. Environmental challenges and climate change are the underlying conditions and indirect cause of everything we have been talking about in the past 10 years of our work. Values-based banks have played a fundamental role in the early awareness of and investments in support of the energy transition. All indications suggest that a massive investment push will be needed to meet the goals of the 2016 Paris Agreement and provide new pathways to sustain life on Earth. We have reached a massive turning point where a range of institutional actors have stepped in, yet there still needs to be a wide spectrum of investments to translate years of promises into urgent action. In our final plenary session of the Summit, we described the imperatives and designed the ways that financial institutions can be catalysts for a new coalition of action and thereby focus efforts and resources. Keynote: Sheila Watt-Cloutier, Author & Activist. Moderator: Justina Alders-Sheya, Fund Manager, SFRE. Panelists: Jules Kortenhorst, CEO, Rocky Mountain Institute; Paul Thomas, President & CEO, ESAF Small Finance Bank; Stewart Wallis, Executive Chairman, WE All (Well-Being Economy Alliance); Sandrine Dixson-DeclĂ¨ve, Co-President the Club of Rome & ClimateKIC, Advisory Board.

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THE SUMMIT THEMES IN CONTEXT: CONNECT, DISRUPT, TRANSFORM

For many years, society has put pressure on governments and multilateral institutions to find solutions to the unresolved issues that threaten our existence. But experience tells us that we cannot rely on those institutions alone. Transformation will require a coordinated effort of local, national and global authorities along with many private sector actors and the commitment and actions of informed citizens, NGOs ... and banks. Why banks? The financial sector, by redirecting money to the real economy, has the power to contribute greatly to meeting the challenges we face. However, the current financial system, seeing money as an end rather than as a means, lacks the incentives and mindset needed to commit time, energy and attention to resolving social and environmental challenges. Most mainstream banks, while giving new commitments to a better world, continue to put their effort into generating higher profits and paying out higher dividends to their stakeholders, as this is the well-worn pathway to a narrowly defined, outdated success model. In the meantime, banks remain untrusted, secretive, too big to fail, and unwilling to invest in and facilitate the movement of money to meet the fundamental needs of humans and protection of natureâ&#x20AC;&#x2122;s services. For many years, values-based banking institutions have been working together to tackle some of these challenges. They have been successful in many aspects, but their reach is not as big as it needs to be. To achieve the changes, finance must be used in service of people and planet. This cannot happen without a disruption to the current financial system. Strong connections among institutions, society and government bodies need to be forged. To transform the financial system, actors in the system will need proof points from GABV banks that show how profit is generated through good work for communities, clean technologies and an integrated wellness system that fosters a high quality of life for all. Disruption of the current banking model is crucial to support rebuilding the confidence of citizens in the financial system. Yet how can this be done when people have lost their trust and have a low expectation of banks? Values-based banks provide wonderful examples of how an institution can do good and do well financially. A change in the financial system will also require more connection among members of the values-based banking movement, civil society organisations, governments, citizens, and not surprisingly, mainstream banks. Values-based banks are the forerunners for

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change and influence in the banking system, encouraging others to adopt a more values-aligned approach to their businesses. New relationships can be built on technologies that support collaboration on disruptive new platforms of engagement, including crowd funding. As many of the GABV banks have learned, transformation of the banking system does not happen overnight. Going forward, the process will be long, involving difficult conversations with many actors in the system. Additionally, it will demand raising awareness and educating people to help them understand their role and ways to influence the system. In the following pages, we will look at each one of the themes: connect, disrupt and transform and provide insights from the keynote presenters, panel discussions and recommendations from the small group design exchanges. Our intention is to give a voice to everyone at the Vancouver Summit who participated and shared their views on how we can redefine banking for a radically different future.

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CONNECT

LEARNING JOURNEYS

CHAPTER THREE

CONNECT Opening words

“

“To feel close to someone or have a good relationship with them”

This is the definition of the verb connect, in a relationship context, from the online Cambridge Dictionary. Banking in its essence is about connection. Connecting people who have savings with people who have projects, ideas or other financial needs. Values-based banking goes deeper and more intentionally into these connections since it connects savers to entrepreneurs with projects that might improve the world. In this part of the book, you will find discussions, recommendations and ideas on how to connect with others inside and outside of the banking system to raise awareness about the need for change and to partner with others to accelerate the regeneration of the banking system.

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The members and partners of the GABV work closely with their local communities and clients to identify needs and create solutions and products as a response to their needs. As David Reiling, CEO of Sunrise Banks, states:

Our job today is to get the true needs of the people we’re talking about.”

To do that, GABV members work together with stakeholders and their clients, and decisions are often made in direct consultation with all parties. The objective is to create a financial system that’s inclusive of everyone and works for people. As both GABV Chair Peter Blom and the President of Capital Institute, John Fullerton, pointed out, this is only possible by completely changing finance. Financial institutions must discover how to collaborate with different non-governmental organisations and governments to answer the needs of people. New skills, resources and tools need to be developed and used to reach out to the underbanked, women and marginalised communities. John Laker, Chair of the Banking and Finance Oath, encourages the GABV and its members to continue working to face those challenges.

Connecting clients, banks, governments and non-profits is very much needed in order to serve the people and protect the planet. Banking the underbanked (connecting business models and practices to the needs of migrants/underbanked/clients) “The world is talking about us, but no one comes and talks to us.” This powerful

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Working closely with regulators is essential to achieve any change in the financial system. The regulators see a supervisory board as an ally, and if a strong board is on top of an organization, they have higher trust in the organization. John Laker, Chair of Banking and Finance Oath

statement by Tima Kurdi, refugee advocate and author, perfectly outlines the problem that many communities face in reference to finance and banking. Immigrants, rural communities, women and marginalised communities face entrenched barriers based on ignorance, bias and prejudice that depict them as high-risk clients, points out Nathan Benson, Research Director of The Refugee Hub at the University of Ottawa. They are underbanked people with little to no access to financial services who struggle to progress due to the lack of opportunities. Despite prejudices, people are fighting to change their situation. “Refugees who ask for financial education want to know how to start a business, save for kid’s college or buy a home,” explains Linda Lopez. The key is connecting with the people who know more about those communities, their necessities and their problems. As Young Leader delegate Hdeal Mohamed explains, NGOs and social actors are closer and more impacted by those situations, so they can promote conversations and meetings to overcome reluctances.

Understanding the immigrant from the standpoint of the idiosyncrasies of their own culture” is key, urges David Reiling. For this reason, banking institutions need to connect with organisations working closely with unbanked communities to really understand their needs and offer them the carefully crafted financial products and opportunities they need to have a successful life. Redesigning internal governance for social inclusion Nevertheless, the idea that immigrants, rural communities and women in certain countries are risky clients is deeply established in societies across the world. Overcoming prejudices is always challenging, even more so when money is involved. Values-based institutions need to be examples of how to work with the unbanked and facilitate social inclusion and empowerment of women and marginalised communities to make their projects real. Paul Thomas, CEO of ESAF Small Finance Bank in India, is sure that GABV members can take a lead to make changes and influence policymakers, but also other banks can adapt to new ways of banking that are focused on the wellbeing of people

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and the planet. Nevertheless, this starts with an internal change. Diversity is needed on boards to be representative of the communities that GABV banks are serving. “If we are really going to be a truly diverse board, we have to be prepared for uncomfortable conversations at times” notes Laurie Spengler, Enclude’s CEO.

We have to be purposeful if we want to finance the different kind of world we all collectively need, so we cannot be neutral,” stresses Tamara Vrooman, CEO of Vancity. “I hope more people see the value of giving voice to the people at the bottom,” emphasises Ebony Harper, transgender advocate and Program Associate at The California Endowment. The values-based banks’ boards are becoming an example of inclusiveness, being composed of the people who represent and connect with the local communities. Innovation for diversity and inclusion The influence of the choices made by powerful people and organisations is well summarised by Sandrine Dixson- Declève, Co-President of the Club of Rome & ClimateKIC:

Every single decision that we make will have an impact on someone else. We need to consider the impacts of our decisions”. For this reason, the Global Alliance for Banking on Values should excel in innovation, providing systems, resources, tools and procedures to promote diversity and inclusion. “It is those bridges to inclusivity that make us stronger, shift our perspectives and get us there faster,” says Rick Hansen, founder of the Rick Hansen Foundation. Linda Lopez believes that the business model of financial institutions can be focused on doing something economically good and advocating to create inclusive communities. Investing at the grassroots level, offering financial advice and guidance, and leading the debate on the impact of climate change are only some of the initiatives implemented by GABV members around the world.

What I admire the most of GABV bankers is that they are doers—they are not talkers. As doers they are pushing for solutions, and together our task is to encourage them to find better and deeper solutions,” says Laurie Spengler.

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Building confidence in banks Despite the undoubtedly good policies and initiatives carried out by the sustainable finance community, reluctance to believe in banks still exists, emerging from the lack of goodwill during the financial crisis. Justly, the crisis heightened people’s distrust in banks and financial institutions. But many people were not aware of the work of values-based banks before the creation of the GABV. This has played a role in regaining clients’ confidence in banking and will be a key to creating a more fair and impactful financial system. No one wants to achieve this change more profoundly than valuesbased banks which are following their principles, their focus on the real economy, and their aim to help the planet and serve communities. John Laker echoes that the “trust in banks has been lost and regaining it is a slow and long task, but in many countries the GABV and its members are working to rebuild that trust.” However, this task cannot be done exclusively by the GABV and its members. Working closely with regulators is essential. “They (regulators) see a board as an ally. If the board is on top of an organisation, the regulator has an easier time” concludes Laker. How the GABV can play a role in creating a platform between developed and developing countries to share knowledge? The collaboration, communication and connection among financial institutions and governments around the world cannot only help rebuild confidence in banks, but it can also benefit citizens around the world. “Through the power of money, we can be clear in how we connect to the bigger issues. We are the middle (wo)man and have a function to fulfil there,” explains Peter Blom. BRAC has signed up 30 million subscribers to BKash mobile services. Promoting mobile banking in this way, opening welcome centres or organising community focused activities are just some of the proposals made during the design exchanges. The objective is to make it easier for people to move around countries, start a new life or project and establish themselves in a community. “Not having documentation shouldn’t stop anyone from opening a bank account,” says Gillian Barth.. “We banks must get political” states Kat Taylor, co-CEO of Beneficial State Bank, encouraging all of her colleagues to continue working together to connect the world to build a better future.

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BIG QUESTIONS During the Summit, participants took part in design exchanges where they shared their experiences and ideas on how to make change in the financial system. Some of the discussions resulted in a number of questions we should be asking ourselves while taking this path to change the world of finance. Banking the underbanked (connecting business models and practices to the needs of migrants/underbanked/clients) • How do we engage local communities and how do we serve those populations with the understanding that they have contributions to make in the economic system? • How can banks help change the narrative of how the public views refugees without it seeming like it is a corporate agenda rather than an act of sincerity? • What are all the things that are in our way, what are the things getting in the way of immigrants? • A recurring theme is that migrants are seen as a perceived risk. What can be done to remove the barrier? Redesigning internal governance for social inclusion • The question for us is how can money and banking services contribute to disrupting and changing the structural power paradigms that limit diverse participation and undermine social and economic inclusion? • What are we losing in the world by not investing in women? • If indeed today we believe that women and girls matter, where is the money? Innovation for diversity and inclusion • How could the GABV support an initiative that takes action on the ground? • Where is our determination to diversify the leadership at the organisations? How can we radically include all? • It’s clear many banks here are doing much to engage and empower women. But investing in #MeToo means more than equality and representation on a board. How are GABV members dismantling the patriarchy? • What can financial institutions do to invite and include all people no matter their gender identity? • How can we accelerate a banking model that is inclusive and key to the future?

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Building confidence in banks • How do we translate things and communicate effectively? • Banks and financial institutions are supporting their clients during normal circumstances but are they doing the same during times of chaos? • Do bankers actually have a responsibility to consider where they put the money of their customers? • What are the key values guiding banking decisions today? What should they be in the future? • What kind of education is needed to change an individual’s concept of investing for profit to investing for values? How GABV can play a role in creating the platform between developed and developing countries to share knowledge • How can we use fintech to make banking more accessible, convenient, easy to use and transparent, at a fair price? • What obstacles do we run into with financial literacy? • How can we make adaptation happen at the local level and how can we move the financial sector and government to get where we need to go?

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What are the challenges we face in establishing the connection between needs and solutions?

Working to facilitate the inclusion of immigrants and refugees to a new society, empowering women and marginalised groups by giving them opportunities to grow personally and professionally, and fighting climate change while raising awareness about the necessity of collaboration are missions that cannot be achieved by a single organisation. Communication, cooperation and connections are needed in order to achieve a real change in society. As a global organisation with representatives and members around the world, the GABV needs to build and work on those connections, leading the change. The values-based banking movement already collaborates with authorities in many countries to establish a fairer financial system. Members of the GABV took part in discussions at the European Union (EU) level to examine how to integrate sustainability considerations into the EU financial policy framework. In 2018, the GABV Scorecard was adopted by Bank Negara Malaysia to support its strategy of values-based intermediation with a pilot group of Islamic Banks in the country. Furthermore, the GABV has been involved in the consultation by United Nations Environment Programme – Finance Initiative (UNEP FI) when creating the Principles for Responsible Banking for banks which are on the journey to a more sustainable paradigm1, Member banks and financial institutions also work to promote connections not only with authorities and regulators, but among the communities they serve. Vancity, from Canada, is helping immigrants and refugees through its “Welcome House Centres.” In 1

http://www.gabv.org/news/gabv-welcomes-the-un-principles-for-responsible-banking

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this space, immigrants and refugees receive help to normalise their situation in the country, to open a bank account, receive some financial education and even spend the night for a certain period. In Europe, Triodos Bank recognised the deep knowledge that charities have of the needs of communities, so they are closely collaborating and supporting their projects. In Latin America, GABV members recognised the importance of financial education and provide free courses in the communities they serve. Banco Solidario in Ecuador, Bancompartir in Colombia and Banco Sol in Bolivia are just some examples of the commitment of the GABV towards financial literacy. The GABV has also become a connection point for institutions in the same country or area. In Australia, Teachers Mutual Bank and Bank Australia are two of the pillars of the Responsible Investment Association Australasia2 , which presents sustainable financial options in the area. In the US, Amalgamated Bank and New Resource Bank merged in 20183 to become the biggest values-based institution in the country. Centenary Bank of Uganda organised a one-day event in Kampala4 to present the potential benefits of ethical banking in Africa to other institutions, welcoming the GABV board representatives as panelists.

2 https://responsibleinvestment.org/ 3 http://www.gabv.org/news/amalgamated-bank-new-resource-bank-announce-intention-createnational-values-based-institution 4 http://www.gabv.org/conference_financial_inclusion_kampala

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Connect – steps forward The Global Alliance for Banking on Values is an international actor which can make influential decisions, lead powerful initiatives and propose effective actions in many financial areas. Some GABV members have already taken concrete steps to show the value that clients in the immigrant community can have or the importance of financing projects led by women. Research conducted by Vancity at the end of 2015 showed the economic benefit of Syrian refugees to the local economy. The research showed that Syrian refugees expected to arrive in the province of British Columbia between the end of 2015 and the end of February 2016 would generate at least CAD 563 million in local economic activity over the next 20 years1. Hdeal Mohamed recommends connecting with actors outside the banking sector to help communities in the appropriate way. “Bring someone into the conversation that you would not usually bring. Whether it is someone from an NGO or people really close to the problem, and do not be afraid that they are going to be critical of what you are doing,” suggests Mohamed. Communication and connection are essential to achieve our common objectives. Financial institutions must share their actions against climate change, but also give recommendations on how to help the planet personally and locally in different ways (articles, participation at different activities and conferences). Financing women and marginalised communities is another strong message that can be sent. GABV member Bank of Palestine organises awards to recognise the best projects lead by women in a country where their situation is still very difficult. Such actions build confidence in banks and presents the values-based banking movement as a different and positive way of doing finance. Connecting with clients and using their language, listening to their problems and being available and accessible does make a difference. Furthermore, banks can support and help organisations working outside the financial system for the benefit of people. Using the banking sector to identify unbanked individuals, and supporting them to realise their potential while ensuring no harm is done to the planet, will bring us one step closer to achieving a more inclusive financial system.

https://www.vancity.com/AboutVancity/News/MediaReleases/RefugeesBoostLocalEconomy-Dec2-15/

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FACTSHEET

BANKING THE UNDERBANKED (CONNECTING BUSINESS MODELS AND PRACTICES TO THE NEEDS OF MIGRANTS/UNDERBANKED/CLIENTS) • How do we engage local communities and how do we serve those populations with the understanding that they have contributions to make in the economic system? • How can banks help change the narrative of how the public views refugees without it seeming like it is a corporate agenda rather than an act of sincerity? • What are all the things that are in our way; what are the things getting in the way of immigrants? • A reoccurring theme is that migrants are seen as a perceived risk. What can be done to remove the barrier? Banks and financial institutions appear to be available to everyone, but when we take a closer look, it is easy to see some communities with limited or even no access to financial services. They are the unbanked, and usually share similar characteristics: they are migrants just arriving in a new country, women living in a country with very low equality, or rural communities far from big cities. How can financial institutions reach these people, who are less visible in society? How can they start a conversation with them, connect and offer them services adapted to their situation? Values-based organisations are trying to find answers to those questions, but there are many difficulties to overcome.

Building relationships with underbanked communities or individuals is a huge challenge due to their isolation. Institutions need to deliberately go to find them. On top of that, there is an established perception that people with certain characteristics are high-risk clients, not profitable, and surrounded by uncertainty. Cultural differences, personal habits and societal prejudices can also be barriers between institutions and the underbanked. Something as simple as verifying someone’s identity or even talking to a person can be a challenge that prevents people from opening an account or asking for advice. GABV members are working to overcome these difficulties, reach the underbanked and offer the services they need and deserve to start a life in a new country, start a business

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or access basic services. The first step is accepting all communities and persons as conventional clients. â&#x20AC;&#x153;Refugees who ask for financial education want to know how to start a business, save for kidâ&#x20AC;&#x2122;s college or buy a home,â&#x20AC;? says Linda Lopez. They want to be part of the community, help it grow and advance themselves in the new country or with their new project. The main challenge is still to establish a contact and to connect with underbanked communities. Experts have signalled the necessity of collaborating with organisations who know those people, their characteristics and culture. It is necessary for financial institutions to work closely with NGOs and humanitarian associations, as they have a better and deeper knowledge of the needs and urgencies of immigrants or women.

There needs to be a merger between the for-profit and the non-profit sectors, developing strategic alliances and community alliances in order to bring banking closer to the underbanked. Another challenge is facilitating the communication between the unbanked and the financial sector. It is not only about the language but also about the tools and services that are offered. Illiteracy should not be an impediment for them to access finance, and the costs of those services should be sustainable and adapted to their possibilities. Values-based institutions are already working to find solutions to all those challenges. Microcredits are helping women in developing countries to start projects and support their families. Financial education, both in their home countries and their new homes, is facilitating the integration of migrants and refugees in urban societies. Internet and mobile banking apps are helping rural communities control their finance and access new services. More examples of successful solutions can be found within the GABV membership. The Bank of Palestine encourages women to start new professional projects by rewarding the best ones, but also by providing them with advice and guidance on running their own business. ESAF Small Finance Bank in India also provides similar support to its clients who are willing to work hard to make a change in their lives1. LAPO Microfinance Bank in Nigeria helps the young population get better access to education and skill development by participation in their training programme designed to enhance entrepreneurial skills and give them a better chance of finding a job. This activity not only helps the young but also the society and business sector2. Charity Bank funds social projects in rural areas of the United Kingdom, helping the community to have sport facilities, cultural centres or shared houses. Triodos Bank in the Netherlands recognised non-profits as the best actors to help migrants and refugees and works with them all around Europe to help newcomers start a new life. Sunrise Banks in the USA 1 2

http://www.gabv.org/stories/a-stitch-in-time-saves-charulata http://www.gabv.org/stories/lapo-skills-acquisition

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listened to the local Somali community in the Twin Cities and understood the problems they faced when sending remittances to families back home. Their answer was to open a branch in their community, work on a loan product that fits the communitiesâ&#x20AC;&#x2122; needs and continue talking to government officials to find solutions to existing problems3. The GABV aims to turn banking from a privilege to a right. As an important international actor, the GABV can help abolish misconceptions about underbanked groups and should focus its efforts in the coming years to do this. Some mainstream banks work on this as well, but their efforts are mostly seen as an opportunity niche. In the coming years, more banks should follow the steps of values-based institutions and start offering quality financial products to the unbanked. Giving them a voice and supporting them is a step that all banks need to take. GABV members can help to share experiences and inspire the change amongst mainstream banks. The benefits of doing that are clearly explained by Musimbi Kanyoro, who said: â&#x20AC;&#x153;When you fund movements, when you fund people who are organised and learn and share the skills and share knowledge, you get return on the investment faster and then it is much more sustainable and better rooted.â&#x20AC;?

A number of design exchanges concluded that even though financial institutions are present everywhere, there are still a large number of people who do not have access to any financial services. The reasons for this are numerous. Values-based organisations are working hard to include more unbanked people by designing specific products and services aimed just for them. They are also working on changing the general perception of the unbanked and giving them a voice. The recommendation of the design exchanges for the future is to focus our work on reaching those who need our help and need access to financial services that will improve their lives. Finding inspiration and examples of the work already done in this area will help others find solutions they need. Many GABV members have successfully reached out to the unbanked and have included them in the financial sector. These stories should serve as an inspiration to others.

https://sunrisebanks.com/sunrise-banks-commitment-somali-community-not-wavered/

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STORY

Missoula Federal Credit Union, USA When refugee Desbele and his family arrived from Eritrea, Africa in 2017, the International Rescue Committee (IRC) Missoula greeted the family of six at the airport and brought them to their new home. Desbele and his wife Samrawit attended Missoula Federal Credit Union’s (MFCU) ‘Understanding the U.S. Banking System’ class for refugees, created in partnership with IRC, to teach families like Desbele’s the basics of financial literacy. Families attend these training sessions in Arabic, Swahili and Tigrinya with the use of IRC Missoula’s on-staff interpreters. It quickly became clear the family of six needed a vehicle to get their four kids to school. Thanks to the banking classes, Desbele knew MFCU could help guide this

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first major purchase and with a loan from MFCU, Desbele was able to navigate the system and purchase a minivan to meet his family’s needs.

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FACTSHEET

REDESIGNING INTERNAL GOVERNANCE FOR SOCIAL INCLUSION

• The question for us is how can money and banking services contribute to disrupting and changing the structural power paradigms that limit diverse participation and undermine social and economic inclusion? • What are we losing in the world by not investing in women? • If indeed today we believe that women and girls matter, where is the money?

Leaders in any organisation are the biggest influencers in their culture. What type of leaders they are, how they act with the organisation, and the composition of the supervisory board influence the environment of the organisation. For this reason, a change in the perception that companies have towards certain communities should start with their governance. “I hope more people see the value of giving voice to the people at the bottom,” says Ebony Harper, Program Associate at The California Endowment.

It is not possible to have equitable outcomes without equitable structures, and governance cuts right to the heart of that. Redesigning it is the first step to benefitting social inclusion. The question that emerges is what banking institutions can do to address the lack of diversity within their organisations. It is even more important to identify ways to make boards and leadership positions truly inclusive. Diversity is not useful without inclusion. For some groups, breaking the glass ceiling that represents being involved in decisionmaking is a huge challenge that is not only difficult to overcome, but even to identify. The first stage to boost diversity and inclusion is empowering women, youth, migrants, refugees and other marginalised groups. They need to see that their voice is heard, their needs are visible, their opinions matter, and their rights are upheld. This all starts with respect. In countries and societies where women face a lack of equity, organisations

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need to lead the change. Similarly, multicultural communities need to have leaders who accurately represent the diversity, actively make decisions, and demonstrate that all opinions and perspectives are important. Furthermore, for young people it is important to have an opportunity to demonstrate their capacities and value for a company and its clients. This can encourage others to keep studying and fulfil their ambitions. These are the challenges that the GABV and its members are facing. Members are seeking and finding solutions to them, working closely with the communities they serve, ensuring that their needs are represented and providing them with services designed for them. Finding the balance is key in order to properly understand the reality of certain communities, as different members will provide insights, ideas, opinions and initiatives that represent the community they are in touch with. Empowering women to stand up to discriminatory situations is another way to ensure social inclusion. One of the GABV members amended its governance model to ensure that women are more protected in the organisation. This encouraged more women to speak up against harassment, reporting those situations to managers or to the police. By doing that, those situations not only decreased but, in many cases disappeared, as men took responsibility for their negative actions. Nevertheless, one more step must be taken and that is to increase equality and gender diversity in management positions. More women are needed in decision-making roles, since 90per cent of high-level jobs are held by men in most banks. GABV members are working to change that, not only by looking for parity, but also by showing the progress we have made and serving as an inspiration to other banks to follow our steps.

GABV banks can take a lead to make changes and influence policy makers,â&#x20AC;? explains Paul Thomas, CEO of ESAF Small Finance Bank. Finally, giving opportunities to young leaders is also key to achieving greater inclusion. This demonstrates their value by having their voice heard and promoting their ideas. For this reason, values-based organisations are not only adding diversity to their leadership, but also preparing future leaders who understand the need to have different voices in management roles. The GABV Leadership Academy helps bankers understand the varied world in which we live by connecting them with emerging leaders from other countries

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and regions where finance is conducted and understood in a different way. Seeing how others work helps them comprehend the idiosyncrasies of the communities they serve. Sandrine Dixson-DeclŃ?ve describes that situation:

Every single decision that we make will have an impact on someone else. We need to consider the impacts of our decisions.

The design exchanges recommended that in order to achieve better social inclusion, we have to work on changing the leadership of the organisation. Introducing more leaders who understand the importance of social inclusion and have direct experience with social exclusion will ensure the whole organisation is more aligned with valuesbased principles. We need to give a voice to and empower the underrepresented (women, youth, migrants, refugees and other marginalised communities) to stand up and assume more leadership positions. We need to have leaders who represent the community they serve understand the needs of migrants and womenâ&#x20AC;&#x2122;s aspirations, listen to youthâ&#x20AC;&#x2122;s voices, and comprehend the importance of taking care of the planet and protecting the environment. This gives more power to a bank than millions in capital. We do recognise the challenges many countries face to achieve this, from regulation to societal limitations; however, we have to engage with regulators and society representatives and start having conversations that will lead towards solutions and achieving better social inclusion.

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STORY

Verity Credit Union, USA John Responte, a US Marine war veteran and personal trainer, lost his job after his boss closed the Seattle gym where he worked. He reached out to local veteran resources, where he found out about free business technical assistance programs at Business Impact Northwest (BIN), and one of its programs, the Veterans Business Outreach Center. A microloan from Verity Credit Union, in partnership with the BIN program, set him on the path to success. He opened Awesome Inc, in Auburn, Washington, where he trains clients of all ages. Verity partners with other credit unions to provide capital for microloans through BIN, which offers entrepreneurs like John the tools, coaching and microfinancing they need to succeed, with a focus

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on small business owners in underrepresented communities, such as people of colour, women, veterans and immigrants.

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FACTSHEET

INNOVATION FOR DIVERSITY AND INCLUSION

• How could GABV support an initiative that takes action on the ground? • Where is our determination to diversify the leadership at the organisations? How can we radically include all? • It’s clear many banks here are doing a lot to engage and empower women. But investing in #MeToo means more than equality and representation on a board. How are GABV members dismantling the patriarchy? • What can financial institutions do to invite and include all people no matter their gender identity? • How can we accelerate a banking model that is inclusive and key to the future?

The world is changing in many ways, and one of them is the way people and professionals are evaluated. Having skills and talent are the keys to having good opportunities and professional success. Nevertheless, capabilities are not the main attribute some companies base their assessment upon. Instead, many companies are still evaluating people by their gender, ethnicity, history, sexual orientation or identification. Prejudices directly affect many communities that see themselves excluded from certain positions. Lack of diversity and inclusion in big organisations’ workforces and leadership is a significant problem for modern societies. A big question emerges: What innovations can be made to eliminate unconscious biases? Innovation is needed to boost diversity and inclusion. The first step is being aware of the biases, misconceptions and prejudices held by oneself and by a company. This way, overcoming them should be easier. Secondly being aware of the diverse cultures within a community is key to working in it and with it. GABV members acknowledge this, and they try to invite as many diverse people as possible to the discussions, processes, events and activities they hold to understand the needs of the communities where they work.

Many values-based institutions investigate, explore and examine their environment to find ways to help people who live in the area, providing financial products adapted to their real needs and giving advice and support to help them achieve their goals.

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Finding new formulas to encourage diversity and inclusion is one of the focuses of GABV members. Investing at a grassroots level, offering financial advice and guidance and leading the fight against climate change are just some of the initiatives carried out by members. Working for the real economy, knowing the communities they serve, and covering the needs of business, entrepreneurs and citizens are some of the main GABV principles. Those policies are trying to benefit multiple communities of underrepresented people, such as women, migrants or LGTBI+ persons. Hiring people from these communities can be seen as an innovation itself in certain countries and can lead to breaking barriers for them. The same can be done by promoting the members of these communities to leadership roles and showing their value as workers and managers.

Moreover, consulting and supporting grassroots groups is important when developing new innovations as their voices are not only relevant and valid, but a representation of the society. That is why they must be heard and acknowledged. Values-based bankers are doers and they are constantly searching for solutions that are beneficial for society. This inclination toward finding solutions leads them to collaborate with social actors who are in touch with immigrant communities to better understand them, facilitating their inclusion and understanding of their new financial environment. Similarly, they promote diversity in their organisational environment by promoting the presence of professionals from different races, religions or physical abilities. Values-based organisations recognise the importance of diversity and how positive it is for clients to be able to connect and communicate with someone similar to them who understands their language and situation. The discussions during the design exchanges highlighted the need to distinguish between technical and social innovation happening in the financial sector. The technical innovation is mostly focused on digitalisation as a tool while social innovation in the financial sector is focused on improvements related to social and environmental conditions and should serve as an enabler for change.

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The participants concluded that talking about innovation in the financial sector often means talking about technical advancements to provide better services and lower the costs of business operations. However, we need to start thinking about social innovation for diversity and social inclusion. Values-based organisations work hard to achieve better diversity representation and inclusion in the work they do. How can they achieve this even more? Finding innovative ways to include more representatives of marginalised groups is one way. In the coming years, we must continue to work on inspiring others to adapt this way of working, where diversity and inclusion are important aspects of any business and provide more investments to advance these areas.

STORY

Banca Etica, Italy Banca Etica supports the Messina Community Foundation, a social enterprise that employs and reintegrates former inmates from the psychiatric prison hospital of Barcellona Pozzo di Gotto. The programme reinvests in social and cultural projects that involve the local community. It is seen as a model of support for those who believe in change, even after many years below the threshold of economic and social poverty.

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FACTSHEET

BUILDING CONFIDENCE IN BANKS

• “How do we translate things and how do we communicate effectively? • Banks and financial institutions are supporting their clients during normal circumstances but are they doing the same during times of chaos? • Do bankers actually have a responsibility to consider where they put the money of their customers? • What are the key values guiding banking decisions today? What should they be in the future? • What kind of education is needed for individuals in order to change the concept of investing just for profits versus investing for values?

In 2008, the collapse of Lehman Brothers in the United States marked the beginning of the financial crisis, which still has a tremendous impact on the global economy. Trust in banks dropped, and many of them disappeared. The economic system changed as did the financial atmosphere in many countries. Many financial institutions saw increasing concerns from their clients, and after nearly 11 years they are still trying to recover from the impact. Banks have almost always been in the business of earning profits. The principle of giving back to society and the environment was not a goal of traditional banking institutions. Values-based financial institutions are proof that an organisation can be involved in banking practices, make profits, and still care about the clients and the communities where they operate. These organisations are helping to rebuild the trust and reputation of the banking sector around the world. This is done by putting people and the planet at the forefront of the work, while profit comes as a consequence of good work. Recognition of these institutions for their benefits to society on a global level is still not the norm. Many surveys1 show that people still don’t have full confidence in the banking industry for many reasons, including a lack of transparency and putting profit before the needs of clients. Participants in the design exchanges also recognised that the biggest challenges include distrust in the mind of the public, regulators and society towards banks. 1

http://www.aei.org/wp-content/uploads/2018/09/Public-Opinion-10-Years-After-the-Financial-Crash.pdf

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GABV members have shown that a different banking system is not only possible, but real. By upholding their core principle of transparency, these banks are very open about how their clients’ money is being used. Information about the projects they finance, the initiatives they support and how they help communities is freely available. Some members go a step further and publish all this information online, making it easily accessible for everyone. By knowing where their money is going and what it is being used for, clients can start to trust sustainable and ethical institutions above others. GABV members know that more work needs to be done to recover society’s trust, and for that reason they continue working for the planet, people and for the prosperity of local communities.

The GABV members put their clients’ money where they promised, support projects aligned with their values that really help the environment and the community,” states Sandrine Dixson-Decleve Co President of the Club of Rome & ClimateKIC. There are many ways we, as banks, need to work towards regaining the trust of individuals. From the financial sector point of view, we need to start by raising awareness about the current issues of climate change, while considering social changes as well. Gender inclusion should become part of our agenda. We need to speak openly about what initiatives and campaigns we plan to run to bring more awareness to these issues. We need to also focus on educating our youth on these issues as we raise the leaders of tomorrow. While we do all of this, we should not forget to be transparent, and to work towards achieving even greater transparency that will help our clients understand fully what our work is and how they fit in it. Only through our actions will we be able to regain the trust that financial institutions have lost. Nevertheless, the GABV and its members cannot do this work alone. As highlighted by John Laker, banks need to work closely with regulators to succeed in their aim of changing the financial system to a better and fairer one.

Conclusions from the design exchanges stress that in coming years, the GABV and its members should focus on promoting transparency as one of the key steps towards regaining trust in the banking system. Values-based organisations should serve as an inspiration to other more mainstream banks to start being open about what they do in order to fully regain the trust of the public. Banks are there to help people have better lives, but if we don’t fully regain their trust, our work will not be done.

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STORY

Cultura Bank, Norway Cultura Bank is an independent savings bank in Norway, committed to lending only to projects with the promise of making a positive impact on people and the planet. Cultura has always kept a low profile, until the publication of the Ethical Bank Guide for Norway, which showed Cultura Bank came out on top in terms of ethics and sustainability. The response from the public was overwhelming. Applications from new customers grew exponentially, and Cultura Bank became known for its practice

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of balancing the financing of small start-ups with lower-risk projects for more resourceful customers.

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FACTSHEET

HOW GABV CAN PLAY A ROLE IN CREATING THE PLATFORM BETWEEN DEVELOPED AND DEVELOPING COUNTRIES TO SHARE KNOWLEDGE

• How can we use fintech to make banking more accessible, convenient, easy to use and transparent – at a fair price? • What obstacles do we run into with financial literacy? • How can we make adaptation happen at the local level and how can we move the financial sector and government to get where we need to go?

The financial sector is probably the most powerful influencer in the world. Its decisions, initiatives and actions directly affect people’s lives, as they can give access to funds needed to start a new project or deny a loan for a new house. This power can be used in many ways, with good and collectively beneficial purposes or just purely for gaining more profit and growth of the bank. A primary focus of values-based organisations is the development of people and local communities. However, many of them, especially those from more developed countries, are also investing their efforts in providing support to communities in developing countries. But there are many questions that arise: how can banks help people in other countries where they do not operate? How can developing countries learn from others and develop further? Those questions are notably important for the GABV and its members who work to benefit not only their close communities, but also those who need help outside of their region or country. The Global Alliance for Banking on Values community is aware of its potential influence and is actively using it to help the planet and people. Within the GABV, members offer support, advice and guidance to each other and often help to solve challenges and problems. However, our work of sharing knowledge and information does not stop here. Some of the banks are starting to work on a higher level to connect developed and developing countries. This work is becoming a bridge that facilitates the sharing of knowledge among regions, countries and institutions. The members of the GABV have

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been exchanging knowledge among different regions for 10 years. But now is the time to expand our reach to other institutions and support those organisations which wish to become more aligned with our principles. More work and close collaboration with authorities is essential to make those projects possible. GABV members have already built the foundation in some countries, collaborating with different actors in order to help immigrants integrate and become an important part of society. Destigmatising certain communities by considering them as trusted clients is just a first step.

The design exchanges recognised the need of partnering as one of the key steps towards a better inclusion of values-based banking in the world. Partnering organisations from developed and developing countries and facilitating the knowledge exchange where organisations will learn from each other will benefit both sides. We have to stop thinking that organisations and people from developing countries should learn from others in developed countries. We all can learn a lot from each other, and that is what our members are actively doing.

STORY

Teachers Mutual Bank Limited, Australia Financing from Teachers Mutual helps economically disadvantaged children in Cambodia develop good savings habits at a young age with early intervention and entertaining lessons on financial know-how. The Childrenâ&#x20AC;&#x2122;s Financial Literacy Project

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leveraged its funding to empower the next generation to play a strong role in the economy and practice good financial sense for their lifetime.

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DISRUPT

LEARNING JOURNEYS

CHAPTER FOUR

DISRUPT Opening words

â&#x20AC;&#x153;

To change the traditional way that an industry operates, especially in a new and effective way.â&#x20AC;?

This is the definition of the verb disrupt, in a business context, from the online Cambridge Dictionary and it is very close to the heart of the values-based banking purpose. Values-based banking is about transformation and change. It is about challenging the way the banking industry has been operating and proposing a different approach. In this part of the book, you will find discussions, recommendations and ideas about how to challenge the current financial system and learn about ways to accelerate regenerative economics at the heart of a values-based banking paradigm. Each heading is based on a theme that was discussed in the plenary and design exchanges of the GABV Summit.

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An important mission of the Global Alliance for Banking on Values is to influence the transformation of the financial industry by refocusing on people and the planet to drive prosperity. In order to achieve this mission, GABV banks are working to disrupt the current assumptions about the banking and the financial sector. To renew confidence in the financial sector it needs to serve everyone, not only the wealthiest in society. As we see from 10 years of values-based banking, there are financial institutions which care about prosperity, beginning with a commitment to the welfare of people and the state of the planet. The following contributors spoke of what is needed in the world to disrupt and evolve traditional banking institutions and the economic paradigm. Tamara Vrooman, President & CEO of Vancity, shared what disruption meant to her. “Disruption – this is a word that by itself is values-free, and it isn’t always positive, but we know things can’t go on the way they are and that’s the disruption that we should see.” Vrooman continued, “Disruption is connected to the real economy, real people, connected to the climate and to building resiliency.” In order to change the financial system, we need to disrupt the current beliefs and help people understand the urgent need for change and the need to adapt to a more people-and-planetfocused1 approach. To achieve this, a first step is to disrupt unequal access to the financial services. Disrupting financial systems for social good According to Gillian Barth, 1 billion1 women still do not have access to financial services. This shows that we are failing at gender equality. The Global Findex database2 report 1 2

https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017%20Findex%20full%20report_chapter2.pdf

The Global Findex database records data based on how individuals manage their finances. The 2017 report can

be found here: https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017%20Findex%20full%20report_ chapter2.pdf

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Disruption is connected to the real economy, real people, connected to the climate and to building resiliency Tamara Vrooman, CEO of Vancity

for 2017 states that 1.7 billion adults worldwide are unbanked. Among these figures, 56 per cent of the unbanked are women. The majority of underbanked come from poor countries where access to financial inclusion and gender equality are at a lower end.

Figure 1 â&#x20AC;&#x201C; The number of people unbanked worldwide Source: The 2017 Global Findex database

The map above shows the countries, along with the number of people, in millions, who are unbanked in the given areas. The research shows that the main reasons for not having a bank account include lack of funds, lack of documentation, and distrust in financial institutions. The latter was cited by roughly one-fifth of adults without a financial institution account. Refugees and migrants fall under the category of largely unbanked populations and face many challenges when trying to access financial services even if they are living in developed countries. Every refugee or migrant who arrives in a new home needs a bank account to pay bills, send and receive remittances, and eventually borrow money. For many, the seemingly simple task of opening a bank account can be challenging, especially if they do not have a national ID, or a recognised United Nations High Commissioner for Refugees (UNHCR) refugee status. Faced with regulations and/or relative poverty, newcomers experience banks that cannot or will not serve them.

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Additionally, immigrants and refugees are often viewed as a high risk for banks and are infrequently seen as an opportunity. Values-based banks worldwide are working together with civic and governmental organisations to disrupt this pattern, by providing the unbanked an opportunity to access financial services. Many Global Alliance for Banking on Values members are developing creative products and solutions to help migrants and refugees. With the help of a bank account and a track record of responsible financial transactions, values-based banks are able to disrupt old patterns and create a way for newly arriving immigrants and refugees to gain a foothold in the financial systemâ&#x20AC;&#x201D;an essential entry point for a better way of life. Transforming the economic system through partnerships Disrupting the current economic system and putting it in service of people is another focus of our work. Linda Lopez believes that through partnerships and collaboration we can drive an inclusive agenda that is both connected and community centred, where everyone wins. Los Angeles is a model city for deep engagement with communities on financial issues. According to Sheila Watt-Cloutier, Canadian Inuit author and activist:

We know what needs to get done, but we need to partner in the right way. We do not need things to be done to us. The mission approach to saving us has never worked. Build on the community with our people rather than continuing to dig up the resources beneath the surface.â&#x20AC;? The current economic and financial system has a tendency not to involve those who are most affected by its decisions. The same is true for the development of services and projects for the end clients, who remain unincluded in this process. Values-based banking takes a different approach and works with clients, developing new products or projects to meet their identified needs. This way of working puts people and their needs at the core, resulting in the disruption of the current way of working. Educating the next generation of climate and social conscious leaders in line with the UN SDGs To achieve very ambitious and much needed sustainable development goals, finance will play an important role. Helping these leaders understand what needs to change in the financial system will require forming new partnerships with organisations that support the development of young leaders to engage with climate change, migration and gender issues, and understand what it will take to change the current paradigm.

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According to Hdeal Mohamed, a young leader delegate at the Summit, this must involve bringing those into the conversation who would not usually be a part of it, whether it is someone from an NGO or people close to the problem.

Organisations need to be open to fresh critical thinking and ideas as real change will only happen when current models are questioned and new approaches are imagined.

Using metrics and stories to change perceptions of risk and opportunities for social and environmental issues Sheila Watt-Cloutier shared the profound impact that climate change has had on the Arctic, which she describes as the ‘air conditioner’ for the planet. But our cooling system is now breaking down. The loss of this cooling mechanism results in damage equivalent to over USD 100 billion every year, and perhaps trillions in the future. According to Sandrine Dixson-Declѐve, Co-President of the Club of Rome & Advisory Board member at ClimateKIC,

We need to triple our investments in particular developing regions to meet 2050 carbon neutrality goals.” Emerging economies are at high risk when it comes to climate change and its consequences. Even though the industrialised countries contribute largely to GHG emissions, it’s the developing countries and poor communities who will struggle the most to adapt to climate change. Lack of investment to support these communities to become more resilient is just one of the issues values-based bankers want to address. Disrupting current views of developing countries and distribution of wealth in general are among the most important tasks to achieve if we want to bring about a more inclusive and fair financial system. How to use money and banking services to disrupt and change structural power paradigms limiting participation and undermining social and economic inclusion

The uncanny truth is that the 28 richest people in the world have the same worth as the 3.8 billion poorest part of humanity,” says Stewart Wallis, , Executive Chairman of WEAll (Well-being Economy Alliance).. As economic leaders, banks and individuals, we need to bridge this financial gap together. Sandrine Dixson-Declѐve highlights that social inclusion should be a part of the climate change conversation. The responsibility of the banking community is to lead these conversations and understand that the needs of people should be their primary focus. People also need to understand what kind of role the banking industry can have in supporting them to prosper and the planet to stay healthy.

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Climate change is already linked to the impact on the most vulnerable people, such as the Inuit in the world’s northernmost region. However, social inclusion should also be a leading topic in today’s conversations. According to Laurie Spengler, President

“Diversity does not mean inclusion.”

& CEO of Enclude, “Diversity does not mean inclusion.” Although these communities are represented in the economy, they are not truly a part of the conversation. The GABV with all its members is working hard to disrupt this way of thinking to bring communities to the table and include them in the conversations we are having. We believe that the communities we focus on should be represented and they are invited to voice their opinions to guide our transformation agendas. Only in this way, through representation and direct participation of all those we serve, will we achieve greater change and success.

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BIG QUESTIONS Each themed design exchange provided an opportunity to share experiences and ideas about how GABV banks can make changes in the financial system. The discussions generated a number of questions that can be summarised as follows: Disrupting financial systems for social good • How can we improve our services by learning from our failures when working with refugees and immigrant populations? • How can financial institutions help change the narrative and perception of the public about refugees without it seeming like it is a corporate agenda rather than an act of sincerity? Transforming the economic system through partnerships • How can partnering with institutions in places of refugees’ origin be helpful in integrating refugees in their new home with access to financial services? • What role could the GABV play in partnering with these institutions? • What does the GABV do to engage with others in the competitive market and how do we engage with them? Educating the next generation of climate and socially conscious leaders in line with the UN SDGs • What kind of education is needed to change individuals’ concept of investing from focusing on returns to investing for values and impact? Using metrics and stories to change perceptions of risk and opportunities for social and environmental issues • How do you measure impact? • Is there a way to get metrics on how much capital is being invested in renewable energies? This information is readily available for fossil energy but not for sustainable energies. How to use money and banking services to disrupt and change structural power paradigms limiting participation and undermining social and economic inclusion • How do we continue to include the voices of those who are less privileged, or invisible, to ensure that all are heard? It’s clear that many banks in the GABV are doing significant work to engage and empower women. But investing in gender issues means more than equality and representation on a board. How are GABV members dismantling the patriarchy?

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What are the challenges we face in our attempts to disrupt the financial system as it is today?

Constant emphasis is being put on how GABV members need to disrupt the perceived image of migrants, how values-based financial institutions need to disrupt the traditional way of doing business, which is not gender inclusive and many times has negative influence on the planet and contributes to climate change. GABV member banks are trying to disrupt some of the traditional banking practises which see migrants as high

Regulations often prevent banks from being more focused on the people in need

risk, demonstrate a lack of gender inclusivity, and can have a negative influence on climate change. The norms in the industry have to change. Many banks face challenges from regulation restrictions. Regulations often prevent banks from being more focused on people in need, such as immigrants and refugees. Furthermore, banks currently lack the partnerships that are vital to make an impact. Organisations that focus on migrants, social inclusion, climate change, and other global issues need to be a part of the values-based banking ecosystem. These organisations need not be viewed as competitors, but rather as team players working towards the same goal.

Youth This same approach should be taken when educating the next generation of leaders. However, that is not always the case. A recent graduate who attended a design exchange explained that during her bachelor studies, sustainability was only spoken about for one hour. Throughout her three-year course, environmental and social issues were never discussed.

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This demonstrates the business-oriented path most universities take is still based on traditional (and in some cases outdated) economics views and should be updated to include new ways of thinking and conducting business. Youth must be involved in and lead these conversations, but they are rarely a part of the conversation. They may lack the experience and knowledge they need to lead future generations. Therefore education should be more inclusive and focus on the challenges facing the world today. Youth are already taking more of a leadership role by leading social entrepreneurial movements and rallies in the streets. However, they are frequently not acknowledged, encouraged or heard. There are not enough opportunities for younger individuals to be a part of these important conversations.

Diversity and Inclusion Diversity does not mean inclusion. Even though organisations represent diverse communities, many of them fail to adhere to the needs of marginalised people and forget to include them in important decisions. Ebony Harper, a transgender advocate and Program Associate for The California Endowment, says “It’s hard to make a change in a community that’s not even seen as a community.”

Climate Change Many communities and organisations believe that climate change is a hoax. However, the evidence outweighs their views. According to NASA1, the evidence that the Earth is experiencing rapid climate change is hard to ignore. The global average temperature has risen by 0.9 degrees Celsius since 1880 due to increased carbon dioxide and other human-made emissions. This results in oceans absorbing this heat and affecting the sea life. The ice sheets in Greenland and Antarctica have greatly decreased, affecting the life of people, such as the Inuit, and animals. These are merely the visible effects of climate change. The statistics are daunting and yet there is room for real opportunity. The people who are unbanked give banks opportunities to gain new clients. Climate change gives us real perspective of where high-impact investments need to accelerate. There are many difficult conversations that need to be shared, but we will be able to have them together. Sandrine Dixson-Declѐve stated

We need to go faster. We are facing an extinction. Collective suicide.”

https://climate.nasa.gov/evidence/

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Disrupt – steps forward A common sentiment expressed at the Summit was that we must think strategically and act promptly. For example, one of the issues we discussed was related to immigrants and refugees and their access to the financial system, or lack of it. According to Nathan Benson, Legal & Research Director at the University of Ottawa Refugee Hub: “Banks must send the signal that migrants are important clients.” To help unbanked immigrants and refugees, more banks should, as most GABV members already do, set up initiatives to support these communities. We should learn from those banks which have already overcome obstacles such as newcomers not having proper documentation and credit history. A few banks have overcome these challenges by using biometric data to act as identification where there is a lack of documentation. Others have taken into account mobile banking to track credit history or have provided small loans to build a positive credit history. To disrupt the current views, we have to rely more on partnering with associations which support migrants and refugees and come up with solutions together.

Banks need to partner with organisations that more profoundly understand social movements and worthy causes.

Partnerships with organisations such as the Rick Hansen Foundation and Musimbi Kanyoro’s Global Fund for Women would help GABV banks to foster social inclusion and women’s rights. Banks need to partner with organisations that more profoundly understand social movements and worthy causes. In fact, while supporting different projects, banks have realised that they are not social workers or ecologists. Banks know how to support these organisations, not run them. As banks we can provide the required financial support and partnering they need, but the implementation should be left to communities. The education system needs to be reshaped to include a more holistic approach to both economic and environmental sustainability. A values-based approach that puts people and the planet before profit should be a part of school curriculum. The public also needs to be better engaged in the movement. This should be done with clear, direct and strong values-based leadership. GABV Chair Peter Blom believes that

“How we invest, deposit, lend our money has consequences. We must persuade others in financial services to take up this movement and understand the importance of this work.” Campaigns should specifically target youth to foster their engagement. This would not only increase their participation, but it would also educate them about the initiative and the values-based community. Youth are becoming more conscious about the serious effects of climate change and are more willing to challenge those who believe that climate change is not happening. Twenty-eight GABV members1 have already taken initiative to align their carbon footprint with the Paris Agreement. Through the 1

http://www.gabv.org/news/global-banking-leaders-commit-to-align-their-carbon-footprint-with-paris-agreement

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Climate Change Commitment initiative, the GABV intends to use the measurement methodology developed by a group of Dutch banks known as the Platform for Carbon Accounting Financials (PCAF) to calculate the greenhouse gas emissions of their loans and investment portfolios. Addressing the urgent challenge of climate change and decarbonising our economy is only one part of this work, but it is more urgent now than ever. â&#x20AC;&#x153;Values-based banks and financial institutions from right across the world have come together in recognition of the fact that where we allocate our capital matters for our environment,â&#x20AC;? says Peter Blom. The GABV will need to do more to redirect the priorities of the financial system to recognise and invest in diverse communities as they grow and develop around us. We should not only represent diversity but listen to the needs and opinions of those in diverse communities. Evolution can only achieve so much. Disruption provides the catalyst for banking to embrace the profound changes that are underway all around us. The following section is divided into a number of factsheets organised by theme. Each factsheet can be used as a stand-alone document for internal and external communication needs.

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FACTSHEET

DISRUPTING FINANCIAL SYSTEMS FOR SOCIAL GOOD • How can we improve our services by learning from our failures when working with refugees and immigrant populations? • How can financial institutions help change the narrative and public perception about refugees without it seeming like it is a corporate agenda rather than an act of sincerity?

In order to achieve its mission, the GABV is working towards disrupting current thoughts and views on banking and the financial sector by finding ways to show that banking, if applied to social environmental and cultural priorities, can serve as a powerful force for good. We know that this has not always been the case. The financial sector has put an emphasis on achieving higher results in the form of profit and shareholder value, without considering the consequences for communities and the planet. In a superficial way, the system works, as companies grow and are more powerful. Yet a vast number of communities are now in worse condition than before, facing social inequality, exclusion and difficulties when using money. Meanwhile the long-term effect of not investing in nature’s resources will result in species extinction and dramatic loss of topsoil and water resources. The consequences of this are all around us. So how can the financial system do more for social and environmental good? The GABV and its members are providing answers to this question daily. Through their work with marginalised clients, including women and communities who are not seen by more traditional institutions, the GABV banks understand that these individuals need the most help. Values-based bankers are responding to the needs of these people through numerous projects and financial products aimed at supporting their development and wealth creation. To do this, GABV banks listen to their clients and help to support them to achieve their goals. They do this because their focus is not just on profit but on supporting people while ensuring the planet is not destroyed. During the design exchanges, participants recognised a number of important questions

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and ways values-based banking can further disrupt the financial system and contribute to social good. One of the most important tasks recommended for the next 10 years was to influence public policy. Legislation that recognises that values-based banking can play a beneficial role in society and ensuring that this way of banking is recognised and supported, will have a significant impact on the world. This task is far from easy. However, things can change. As highlighted by Kat Taylor, co-CEO of Beneficial State Bank:

We have to be braver and be more political to achieve the change we aim for. Another recommendation is:

For the next stage of values-based banking to be more focused on reaching out to mainstream banks to share what we have learned about banking on values and why this change in approach is beneficial for society and the planet. We have to continue showcasing the steady growth and profitability of values-based institutions to ensure that the misconception about their inherent instability is challenged. We have to find a way to involve mainstream industry and inspire them to change. But how can we achieve this? The only way this, and other urgent changes, can be achieved is by creating partnerships with local non-profits, B Corps and real economy actors who see how working with the problems of their communities can lead to successful social enterprises. At the same time, impact needs to be communicated to a wider community and policymakers. Recognising key partners and working with them to support local communities and especially marginalised people will help eliminate social inclusion while disrupting the financial system in a positive way. Several keynote presentations and panel discussions described the challenges that migrants are facing. The number of people who are unbanked in the world is surprisingly high1. The unbanked are not only people from developed markets, they are also refugees, or people who do not have a specific status in society, and in many cases women and people who are poor or those who have lost their trust in the financial sector. If we want to make a change and disrupt the current financial system, we have to find ways to include the unbanked population in the financial system. Migrants and refugees face many issues when it comes to financial inclusion, especially in developed countries. It is necessary to have a bank account to be able to pay for 1

1.7 billion people in the world are unbanked according to The Global Findex Report: https://globalfindex.

worldbank.org/sites/globalfindex/files/chapters/2017%20Findex%20full%20report_chapter2.pdf

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their bills but also to receive remittances and support. However, this is not easy. Valuesbased banks can often find creative solutions to providing finance where traditional banking systems might not have the will or the flexibility. Many GABV members who work with refugees have managed to find ways to help refugees to open up a bank account, to support them in creating a positive credit score, and even help them start a business and buy a home. This is the proof that we can do things to help others, but only if we want. And why are values-based banks and financial institutions different? It’s because their focus is on supporting people to help them prosper, while running a profitable bank.

One more way of disruption in the financial sector is through more diversity on governing boards Having broader representation will result in having more diverse and inclusive services and products aimed at a variety of people. Leadership of an institution must reflect the communities in which they operate. Diversity is critical to achieve the disruption and put the financial system in service of social good.

The design exchange participants highlighted the need to continue showcasing the positive results of values-based banking and using it as an inspiration for others to join the movement. Additionally, participants recognised the need to influence public policy changes. This and other GABV goals can only be achieved by partnering with local non-profits and civil society which understands the needs of people, including the unbanked. Further to this, the design exchange highlighted a number of actions that should be taken to achieve disruption of the financial system for social good: •

Humanising and having a more holistic approach to economics.

•

Research and then education; provide proof that the financial system

can be used for social good and back it up with evidence. Use this to teach in universities and educate others about its benefits. •

Setting up the conditions so we can add additional elements of the

economy and measure them instead of reinventing the wheel entirely. Decide on conditions, tweak them and then measure them.

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STORY

Cooperativa Abaco, Peru The credit union Abaco offers its financial services in regions with little government presence and sparse infrastructure. These services are popular among small farmer associations in the JunĂn region (Pangoa) and small trout producers from Lake Titicaca. Abacoâ&#x20AC;&#x2122;s financial services offer comprehensive support to the sustainable development of the rural areas it serves. Customers get access to technical assistance and a safe market from the trader companies selling the products they

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produce (cocoa beans in Pangoa and trout in Puno).

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FACTSHEET

TRANSFORMING THE ECONOMIC SYSTEM THROUGH PARTNERSHIPS

• How can partnering with institutions in places of refugees’ origin be helpful in integrating refugees in their new home with access to financial services? • What role could the GABV play in partnering with these institutions? • What does the GABV do to engage with others in the competitive market and how do we engage with them?

Transforming the economic system requires the strategic and coordinated approach of many organisations, activists, lobbyists and the public working in concert. If we look back in history and see how systemic changes have happened, we will see that this starts slowly, then a number of people join together and spark the change. This change can happen organically, but it can also be catalysed. To succeed in the GABV mission to change finance for good, we must create stronger partnerships with key institutions that support the mission of transforming the economic system. This is just one step. We must also raise awareness of our mission amongst people around the world and inspire them to see the benefits of this economic system. Inspiration is one of the key elements for achieving any change that will help organisations and individuals to persevere and achieve their goals. Finding like-minded organisations and individuals to support this work is one of the key ways to succeed in our mission. According to author and activist Sheila Watt-Cloutier: “We know what needs to get done, but we need to be partnered in the right way. We do not need things to be done to us. The mission approach to saving us has never worked. Build on the community with our people rather than continuing to dig up the resources beneath the surface.” Including unrepresented communities will have a big impact in changing the financial system. Giving voice to those who are not seen by traditional banking

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institutions and large corporations will provide a mutual benefit. GABV members have recognised this and have already started working with different organisations, supporting their advancements, while spreading the mission of values-based banking. The approach to these partnerships is something unique to values-based institutions. They know how to support these organisations, not run them. As banks we can provide the required financial aid they need. However, we cannot understand the organisations and issues as well as they themselves do. The main challenge faced today is that banks lack the partnerships that are necessary to make an impact. A call to action must be issued to educate more organisations about partnerships. We must shift from being competitors to being team players in the industry by pooling our resources. The GABV must investigate creating more meaningful relationships and partnerships with mainstream banks and supporting them in the transition from a traditional way of banking to values-based banking. If we want to achieve change in the financial sector, we should not run away from mainstream banks. We should embrace this partnership and make sure that values-based banking is the key lever of the change. The GABV must try to lead this partnership and drive the process, keeping in mind the end goalâ&#x20AC;&#x201D; changing the economic system for social and environmental good. Advocacy through partnering with governments and regulators is another important way forward for values-based banking. Similar to what has been done with the Central Bank of Malaysia in regard to the values-based banking Scorecard1, additional initiatives should be implemented in other places as well, providing a positive example of valuesbased banking. When we talk about partner organisations, many of them come from cities. We should not forget potential partners from rural areas. These organisations often are isolated and very happy to support any action that will help their communities. Many GABV members are already active in rural areas and are partnering with organisations to help them advance.

http://www.gabv.org/in-the-press/gabv-recognised-by-central-bank-of-malaysia

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Transforming the economic system requires the strategic and coordinated approach of many organisations, activists, lobbyists and the public. Inspiration and partnerships are the key elements to achieve change. Finding like-minded organisations and individuals to support the mission will lead to success. Values-based organisations have already recognised the need for this and are working hard to network with others. Creating connections and networking with other organisations will also influence the success of our advocacy work related to financial change. The design exchanges highlighted: 1. Working together to shift how a community operates by bringing different actors into the conversation and establishing partnerships that banks can use to bring about change. 2. Being creative by bringing parties together from different sectors to share the message.

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STORY

Alternative Bank Switzerland For the first time in its history, Alternative Bank Switzerland (ABS) entered into a partnership with an international financial cooperative that invests in projects in developing countries. Together with Oikocredit International, ABS launched a new product, the Oikocredit Fรถrderkonto, which allows clients to make a positive impact with their money. The initiative was experimental and a great success, opening the door to more international partnerships with groups with expertise in social impact

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banking.

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FACTSHEET

EDUCATING THE NEXT GENERATION OF CLIMATE AND SOCIAL CONSCIOUS LEADERS IN LINE WITH THE UN SDGS

â&#x20AC;˘ What kind of education is needed for individuals to change their concept of investing for returns to investing for values and impact?

How can we be part of the solution when businesses are normally part of the problem? How can we stop being the problem and start being the solution? One of the best ways to do so is to educate our future leaders. There is plenty of talk about this, but how can we make tangible and long-lasting changes that will resonate across the world? These questions and many others were raised during the design exchanges. A business student said that she found it incredible that throughout her three years in university, she was only taught about sustainability for one hour. It was not part of the curriculum. The students were taught in a business-oriented manner, without taking into account todayâ&#x20AC;&#x2122;s pressing issues. This approach needs to be changed by incorporating values into the educational system. As stated by one of the design exchange participants, one major factor that influences how universities decide on curriculum is the appetite from businesses and students in the ecosystem about a specific topic. Raising awareness amongst students and businesses about the benefits of values-based banking would be an initial step we can take in ensuring university curricula are more appropriate to a modern way of looking at economic and financial systems. However, educating the next generation of socially conscious leaders and teaching about the UN SDGs should happen before university. We have to find ways to reach to a broader range of people because not all future leaders will study economics or finance. We must incorporate sustainability into discussions at all levels.

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The education system needs to take a more holistic approach by considering environmental and sustainability issues. Youth need to be involved in discussions that are currently taking place. One suggestion is to develop campaigns directed towards youth. This will encourage their engagement and educate them about the values-based community. Education for its own sake is admirable, but we also need education for action. Empowering women and marginalised groups to take more prominent roles in the leadership landscape is also important for achieving SDG goals. Inclusiveness is still lacking in many areas of the business world. Changing the views of more traditional leadership to more innovative leadership will require leaders to be much more open to diversity and inclusiveness. Being able to understand the needs of people while making sure decisions we make have no negative effects on the planet will be a major skill for future leaders. Being able to quickly adapt to constant change from social and environmental perspectives, while fostering prosperity in communities, will be high in demand. But where do we start? We have already started by being more vocal about the necessity for change. We are reaching more people through NGOs, social media, and news outlets. However, we fail to follow up on this. Young people are expected to lead the conversations we have today, however they are still not given a place at the table, hence they lack the necessary experience and knowledge. They have already begun to take initiatives by taking part in leading campaigns and actively promoting them on social media. But there are not enough opportunities created for younger individuals to be a part of important conversations. One big challenge we face when reaching out to people to talk about serious issues such as climate change and the connection with the financial sector, is the complexity of the language we use. Making sure that these concepts are explained in easily understandable ways is key to reaching out to more people. We also must take the next step to ensure that we reach people and that they also understand what we are saying. The financial system is not complicated, but we sometimes make it more complicated. Climate change is real and can be backed up by data. However, we fail to speak about it

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in a straightforward way that connects with people who are not academics or who are

The financial system is not complicated as such, but we made it more complicated.

not highly educated. We can forget that leadership comes from all levels of education and societies, and so keeping this in mind is vital to ensure we inspire everyone. Storytelling is a great tool with which to reach to people at all different levels. It allows us to get complex ideas across in an easy way. This approach also gives us an opportunity to give a human face to a story, which can bring better inspiration for change. Leading this conversation involves implementing the kind of education that is needed for individuals to change the concept of investing from just profit-focused to valuesfocused. The education system needs to incorporate the importance of values in its curriculum.

To achieve our goals and ensure that climate and social issues are tackled in line with the UN SDGs, we have to ensure that we educate and push forward the next generation of leaders. We have to work on changing university curricula to include values-based banking studies, but also ensure that we reach out and educate other people who might not be at a university. The second step is to give the voice to youth and involve them in the discussions about their future. The same goes for inclusion of women and marginalised groups to take on more prominent roles in leadership landscapes. In the next 10 years we must put more focus on: - Moving from education for its own sake to education for action. - Making a personal connection through storytelling. Find what resonates with people.

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STORY

Folkesparekassen, Denmark Folkesparekassen and Hvinningdal Sports Association HA85 in Silkeborg have joined forces for a Youth Patrol, where children and young people gather for a good purpose. The Youth Patrol collects bottles to protect the environment and at the same time donates the money from the tax refunds they get for returning the empty bottles to a new sports arena in the local area. So far, the Youth Patrol has collected 9,300 bottles, which corresponds to 121 kilograms of aluminium. This has raised more than DKK 15,000, which has been donated to the new sports arena.

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FACTSHEET

USING METRICS AND STORIES TO CHANGE PERCEPTIONS OF RISK AND OPPORTUNITIES FOR SOCIAL AND ENVIRONMENTAL ISSUES

â&#x20AC;˘ How do we measure impact? â&#x20AC;˘ Is there a way to get metrics on how much capital is being invested in renewable energies? This information is readily available for fossil energy but not for sustainable energies.

Metrics are intended to provide proof to the statements we make. If a leader of an institution commits to mitigate climate change, metrics will help to prove if this has been done or not. Metrics are an enormously powerful tool, but it can often be quite challenging to come up with accurate data that can be used. However, we should not be afraid of this, we should make a start and work our way from there. Values-based institutions rely heavily on metrics when reporting the status of their projects and the achievements connected to their mission. This way of reporting heavily relies on qualitative and quantitative data sets, taking into account a very rich set of information. But at times the analysis is hard as we do not get the information we need. This should not be seen as a challenge but rather as an opportunity for further research in a specific area. Values-based banking has an important task to change perceptions of risk and provide evidence of opportunities for social and environmental issues. Combining metrics with storytelling is a great way to achieve this. GABV members have been collecting data sets for many years now, providing evidence that the financial system can have a neutral impact on the planet but still bring benefits to communities and people. Capturing and analysing metrics from these institutions is key to building a case for this way of banking.

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Metrics are used extensively, but we still have much more to do. We must continue to invest in this way of reporting to understand how metrics can be used in decision making. We should invest in developing forward-thinking metrics, where we set a goal and find ways to work towards it, looking from a metrics perspective. However, the danger with metrics is that analysts can shape data into what we want, and this can sometimes dilute what we want to say. To prevent this, we have to adapt consistent language and messaging, and simplify it. In coming years, the GABV should look at the best practices amongst partners and consolidate learnings to strengthen its own metrics. Metrics as a set of data is important but we also need to find ways to learn from it and be ready to control and amend the path we are taking as organisations. Metrics should also be connected to other tools, such as storytelling which can be used for better communication, to change the perception of risk, and to highlight opportunities for social and environmental projects. To achieve changes in the financial system, we have to change peopleâ&#x20AC;&#x2122;s behaviour and inspire them to take a more proactive approach in serving people and the planet. The most frequently asked question regarding the use of metrics and stories to change perceptions is whether the impact can be measured in ways that reinforce and validate the story. Other questions focus on whether we can measure how much capital is being invested in renewable energies.

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Using metrics to build a case for values-based banking is something we should focus on more in the coming years. Metrics, combined with storytelling, can be a powerful tool in achieving behaviour change relating to social and environmental issues. We have to work together to further develop metrics and ensure data is used for decision making as well. The GABV has an opportunity to use the data collected in past years to push forward new ideas and find ways that we can learn from it and inform our behaviour. We should also consider: - Focus not only on metrics, but on the behaviour changes that come along with it. How can we use it, not just when it tells us what we want to hear, but to motivate change? - Embed qualitative and quantitative metrics to storytelling. Combine storytelling with more traditional metrics. - Create and be a guardian of values-based terminology (aligned with SDGs) and ensure that everyone within the network uses it correctly.

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STORY

GLS Bank, Germany GLS Bank practices sustainable banking to protect the climate and decrease CO2 emissions. One of its offerings is a case in point. The “Stop Climate Change” certification consists of a four-step process that analyses the client’s current CO2 emissions performance, then develops and implements a plan for improvement.

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Clients also get access to the GLS KlimAktivist, an enhanced version of the CO2 calculator to calculate their personal climate footprint.

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FACTSHEET

HOW TO USE MONEY AND BANKING SERVICES TO DISRUPT AND CHANGE STRUCTURAL POWER PARADIGMS THAT ARE LIMITING PARTICIPATION AND UNDERMINING SOCIAL AND ECONOMIC INCLUSION

• How do we continue to include the voices of those who are less privileged, or invisible, to ensure that all are heard? • It is clear many banks are doing a lot to engage and empower women. But investing in gender issues means more than equality and representation on a board. How are GABV members dismantling the patriarchy?

Values-based banking is very much focused on working with clients and communities who are not traditionally targeted by other mainstream banks. These clients and communities often need the help and support more than others. How can we use money and banking services to disrupt and change structural power paradigms and ensure that these clients and communities are included in the financial system? Discussions during a number of design exchanges focused on this question from the board, client and institutional perspective and the need to incorporate diversity and inclusion in our work. A number of recommendations arose from the discussions that the values-based movement should focus on in the years to come. From the point of view of governance structures, boards are the best place to initiate

Boards are the any change. If we are working for communities, we have to ensure that board members best place to fairly represent these communities. This will help us to ensure that each community’s initiate any change voice is represented and heard within the institution. Values-based organisations

already are aware of this and are working hard to implement this in their boards, if not already in place. In some cases, a board will have an empty chair to signify the person not represented. This way they can always be aware of those who are not around the table but who are affected by the work they do. Organisations should actively work on creating an interest in underserved communities to run for the positions on the board. It is important to realise that at times only having one representative of a specific group around the table might not be enough. We should have more than one person

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present who understands a specific group of people and who is able to give a voice to them. This concept is known as a Noah’s Ark. The design exchange participants highlighted that:

To achieve the change we aim, we have to redefine the leadership qualities though the values-based lens. This will ensure that our leadership works with values-based principles, putting people and planet before profit, and giving a voice to and working for those who need the support. Banks have negative reputations around the world. Financial systems are often seen as mistrustful and greedy. However, this is not always the case. Values-based institutions bring very different qualities compared to mainstream banks, but they also face the reputational risks of the wider banking system. Working on social and economic inclusion is not always easy with this reputation yet reaching out to vulnerable and excluded people helps to rebuild this reputation and shows a different side of banking. The financial sector may not be perceived as welcoming or inclusive. Some communities may think of the word “banking” as not being inclusive at all. The design exchange participants noted that many marginalised people even fear stepping into a bank, where perhaps they have not felt welcome before. A values-based bank which opened a branch in the rural south in the US faced similar issues. They struggled to attract African American customers. They managed to overcome this challenge only when they made more effort to promote African American employees in their branches and lending operations. Community members’ trust increased when they saw banks mirroring the diversity of their community, and sometimes this is enough to re-establish a trusting relationship. Another example of successful social inclusion comes from Vancity in Canada, which wanted to work with unbanked community members facing social and economic barriers. They found ways to serve this community by hiring social workers instead of bank tellers to invite underserved and homeless individuals into the bank. The employees were people who could relate to them and could also meet their financial needs. This worked because Vancity recognised their challenges, barriers and needs, and identified where banking

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could play a role in supporting them. Often, people in these situations need extra support in understanding financial language, and they have to feel safe before asking questions. Values-based institutions are recognising that to change outcomes we have to change behaviours. All human beings want to feel valued, respected and informed. This is a starting point for many of the GABV members in their communication with their clients. Many of them share these three simple steps when connecting with their clients: 1) Listen to understand 2) Be empathetic 3) Be politely assertive Another important step in creating social and economic inclusion is to give clients a voice. We must put ourselves in the place of our clients and understand their needs and stories. To understand this, we have to listen.

In order to achieve the disruption and change of structural power paradigms, the design exchange participants concluded that it is necessary to work on the governance level, where we need to strengthen the representation of the communities not already sitting at the board table. Additionally, the focus of our work should be to redefine leadership qualities to include a more values-based focus. To achieve social and economic inclusion of the underrepresented, we have to go into communities and reach out to them. We cannot wait for them to come to us. Understanding that not everyone is well informed will help us to find ways to reach to them more productively and will ensure better social and economic inclusion.

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STORY

Bank Australia, Australia Womenâ&#x20AC;&#x2122;s Property Initiatives (WPI) provides long-term safe and secure housing for women and their children escaping domestic violence. In operation since 1996, WPI now has 83 properties housing more than 200 women and children. Typically, tenants have come from difficult circumstances, so along with a secure place to live, WPI links them with support services to help them get their lives back on track.

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Since 2009, Bank Australia has provided AUS 3.4 million in funding to WPI, which has assisted 110 women and children to gain access to affordable rental housing.

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TRANSFORM

LEARNING JOURNEYS

CHAPTER FIVE

TRANSFORM

“

To change completely the appearance or character of something or someone, especially so that that thing or person is improved”

This is the interpretation of the verb transform given by the online Cambridge dictionary. Disrupting the current system and connecting with others is essential to provoking the transformation of the banking system, but this is also instrumental to the transformation itself. The foundational purpose of the Global Alliance for Banking on Values is about transformation of the financial system. In this part of the book, you will find discussions, recommendations and ideas about how to transform the banking industry and have it become a values-based banking ecosystem that puts human dignity and the conservation of the environment at the top of its priorities.

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The Global Alliance for Banking on Values wants to transform the world of finance from the current system to a financial system that is fair and inclusive. We are working to promote the importance of a values-based banking culture internally and externally. Our members are encouraged to develop and deliver products that are inclusive and that actively promote reduction of inequality. One of the key missions of our movement is to build public awareness about what customers’ money and investments are doing and to help people understand that everyone is a banker – and ultimately, we have the power to decide what our money will do in the world.

Tamara Vrooman refers to the leaders of tomorrow as “the leaders of 15 minutes from now” because that’s how fast things seem to be changing. We need the leaders of tomorrow to be able to lead this change. Organisations should start including representation of local communities on their boards or in leadership positions or involve individuals who understand and are able to build relationships with the communities around them. The banking industry is currently perceived as an industry which primarily cares about profit over people and society. GABV members are focused on transforming this perception of banking and demonstrating how things can be done differently. The focus of values-based banking is on people and planet, while profit comes as a result of good work. These institutions are proof that to realise profit you don’t have to jeopardise your values. How can these values-based institutions inspire a transformation in the financial

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conomics used to be called political economy for a reason, because economics needed to sit and then be embedded within our political system which of course needed to be embedded in our values system. The economic system was the root cause of all these other problems, and as a finance person, one thing I understood very well was that finance is what drives our economic system.” John Fullerton, President of Capital Institute

sector? This can be done by promoting the concept of values-based leadership— leadership that is focused on values, attitudes, beliefs and actions that are beneficial for society and the planet. Values-based leaders come from different communities and have deeper understanding of how their work impacts the world around them. They understand the need to help others and to help their staff excel, and by doing so help those around them. Currently, the financial industry mostly focuses on the financial bottom line, and this is the biggest measurement of their success. Sadly, the same thing happens when we assess the status of a country based on its GDP. These measurements are solely based on the monetary value; however, these metrics should be changed to include social measurements as well. The GABV Scorecard1, a tool to assess an institution through a values-based lens, considers many different indicators that are not focused on monetary gains. The Scorecard allows a bank to self-assess, monitor, and communicate its progress on delivering values-based banking. The goal of the Scorecard is to enhance the financial system’s focus on delivering value to society. Transforming the financial world to be more inclusive and fairer requires us to be more daring and to continue to draw inspiration from the stories of people who we wish to help. Values-based banking gives voice to those who have none, and together with them we must create opportunities for development and improvement of our communities. Leaders of tomorrow are those who can connect, understand and listen to their communities. These leaders need be able to create a safe environment for every community. However, they also need to be able to learn from their mistakes. Today’s youth are our future leaders, and these are the values they need to be taught. Our communities need to be able to trust in the decisions they make.

http://www.gabv.org/the-impact/the-scorecard

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The stewardship that banks once had has been lost, and the act of regaining it has become slower, says John Laker. However, the GABV is working hard towards rebuilding that trust again. Peter Blom states that, “It has become much clearer that we must move from financing change to changing finance. We cannot continue to finance more change; this is an important base, but we have to start changing finance.” If we change finance, we ultimately change the economy and by doing this sustainably, we secure our planetary livelihood for the future. One of the GABV’s main pillars is transparency, and all GABV members demonstrate transparency in their business, their actions and their operations. Along with transparency, GABV members also follow inclusive governance, giving power to communities to help in the decision-making process. This approach establishes stronger relationships not only among GABV members and their stakeholders and management, but also their community as well. By doing so, the GABV works towards regaining the trust that individuals have lost in banks by transforming their experiences and perceptions of the banking system. When it comes to living a more sustainable life, many of us forget that economics plays a larger role in this. John Fullerton stresses the importance of this relationship. Fullerton says that economics used to be called political economy for a reason, because economics needed to sit and then be embedded within our political system, which of course needed to be embedded in our values system. John believes that the economic system was the root cause of all these other problems, and as a finance person, one thing he understood very well was that finance is what drives our economic system. The decisions we make today, affect and impact our future. Bankers are not the only ones in a crucial position. It is everyone’s responsibility to start making more sustainable choices. Peter Blom says that banking is not only about money. Everything you do reflects in money; everyone is a banker and we own our own financial system.

According to research conducted by the United Nations Environment Program (UNEP)2, values-based banks are changing the financial system. They have identified their social and ethical responsibilities towards the planet and people that other banks have left unacknowledged. Values-based banks are creating a large impact to the society with their culture and business model. 2 https://www.social-banking.org/wp-content/uploads/2017/08/Values_Based_Banking_pdf-1.pdf

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In order to make a larger impact in the economy, regulators need to be encouraged to promote sustainable activities and initiatives. According to John Laker, bankers have been in the business of taking risks for centuries. He suggests that regulators are not in the business of stopping their imagination and innovation. The old models have not worked, and regulators have spent the last 10 years cleaning up the industry. The pivotal point is to keep the dialogue going while taking risks. We need people to build their confidence in banks again. The GABV needs to work with regulators to help them understand this concept and see the value in transforming the financial sector to be more aligned with values-based principles.

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BIG QUESTIONS During the Summit, participants took part in design exchanges where they shared their experiences and ideas on how to make change in the financial system. Some of the discussions resulted in a number of questions we should be asking ourselves while taking this path of changing the world of finance. Defining tomorrow’s leaders • How do you encourage organisations to give young leaders a place at the CEO table? • What are the skills sets and attributes we want to harness with our future leaders? Putting regulators in service of values-based banking • How do you start two-way conversations between bankers and regulators? Role of economics in the transition to a sustainable society • How might we ignite the action necessary to change the system that drives this unsustainable growth and melting icecaps? What changes to incentives are needed in our economic system? • There is increasing demand for all things sustainable. How do you enable the members of your community to understand their power as decision makers? Developing a financial system that is inclusive and actively reduces inequality • The question for us is how can money and banking services contribute to disrupting and changing the structural power paradigms that limit diverse participation and undermine social and economic inclusion? Transform opinion of the people about banking and their role in the financial system • How do we rebuild trust in traditional financial institutions?

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What are the challenges we face in transforming the financial system?

According to John Fullerton, we will achieve incredible breakthroughs in energy, in health and in agriculture but will we harness these breakthroughs in harmony with the universal principles shared by both modern science and our wisdom traditions that have stood the test of time.

Everything is energy yet we tend to drill through the Arctic, mine the tar sands and dump all our waste in the paper-thin atmosphere circling our planet. Sheila Watt-Cloutier adds to the conversation as she states that

We know the science, we know climate change is man-made and we see the effects. What is lacking in us and our world for us not to be taking urgent action?â&#x20AC;? The pressuring issue of climate change still lacks the urgent action that needs to be taken. Fundamentally the economic system is broken, dangerous, and violent, says Stewart Wallis. The environmental and economic challenges we face today are to be taken up by the next generation. However, they find it extremely difficult to obtain a seat on boards or be a part of these conversations. Another challenge these leaders face includes differences in leadership styles with senior managers. As leadership changes from top-

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bottom management approach to influencing and motivation, it is difficult for many organisations to find a balance. Another challenge that is currently being faced includes the lack of representation of all communities in organisations. Lisa Mensah, President and CEO of Opportunity Finance Network, asks a powerful question: “Where is our determination to diversify the leadership at the organisations?” Only representing diversity in our organisations is not enough. Their voices need to be heard and their communities’ needs must be met. However, the lack of diversity in organisations is also a reason for the lack of trust individuals have in banks. If banks are unable to understand the needs of the community, the community loses interest in banks. However, GABV members are continuously working towards finding solutions to problems in their local communities and helping these communities to prosper. Cooperativa Abaco in Peru provides financial services in areas with little government present and sparse infrastructure. These services are common among farmers and trout producers. These financial services have helped support and sustainably develop the rural areas they serve. Opportunity Bank Serbia also works with agriculture producers and farmers, those who are not of interest to any other mainstream bank in the region. Bank Australia works closely with Women’s Property Initiatives (WPI) to provide safe and secure housing for women and their children escaping domestic violence. And, Teachers Mutual Bank in Australia takes part in helping economically disadvantaged children in Cambodia, providing them with lessons on finance. These are just a few examples of the impact GABV members have across the globe.

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Transform â&#x20AC;&#x201C; steps forward

Sandrine Dixson-DeclŃ?ve says she feels optimistic but also realistic. She believes that we are in a state of emergency and that is not necessarily a bad thing. This must make us wake up and emerge stronger. We need to plan properly otherwise we will not be able to do this. The younger generation is telling us, time is up. They are working with us and telling us that we need to build something together now. Taking gender diversity and social inclusion seriously in the financial sector will mean rethinking the basic assumptions about social class, income distribution, wealth dispersion and economic decision-making. The GABV members have a strong track record of impact investing and microcredit lending to bring marginalised segments of the population into the financial system, while small business financing and mobile banking are working to reinforce social and gender inclusion. But the financial system must also take on new initiatives to overcome the biases and social injustices that persist. These initiatives include partnering with organisations that understand these issues well. As GABV members, we must transform the leaders of tomorrow by giving a voice to the unheard. Our boards already represent the needs from diverse communities. However, we have an opportunity to grow by making this representation stronger. As more young people start taking leading roles in todayâ&#x20AC;&#x2122;s society, they deserve to be included in the decision-making process to set an example for other organisations. To achieve transformation of the financial system, we have to work closely with regulators around the world. For regulators to be in service of values-based banking, we have to establish two-way communication and facilitate exchange of knowledge between the two. Regulators must be made aware of the initiatives and activities that values-based organisations have undertaken and the benefits this has for society and the world. In order to transform the opinions and perceptions that people have about banks, we need to work together with other organisations and maximise our reach. Only though partnership and working together we will achieve our goal of changing finance to be more inclusive, to support local communities, while putting people and the planet first. And the profit will follow as a result of good work.

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FACTSHEET

DEFINING TOMORROW’S LEADERS

• How do you encourage organisations to give young leaders a place at the CEO table? • What are the skills sets and attributes we want to harness with our future leaders?

Lisa Mensah asks “Where is our determination to diversify the leadership at the organisations?” The world is constantly changing, and we need to embed in our leaders the values and qualities we want our future visionaries to have. We need to strive to find leaders that always seek different perspectives when making decisions. And we must ensure that every community is heard. We want the leaders of tomorrow to be able to change the future but what values and qualities do we genuinely want them to have? And how do we encourage banking institutions to give youth a place on their board? These are the challenging questions that were discussed at design exchanges during the Summit. Participants addressed a number of challenges and provided suggestions as to how to move forward in the years to come. One of the first steps is for organisations to include diverse individuals on their boards and in the leadership pool; those who will be able to build relationships with the communities around them. To create the leaders of the future, we need to start exposing youth to work that’s focused on values-based banking principles. This way, they will get an opportunity to practically learn more about values-based banking.

The leaders of the future need to be open to change perceived views and accept diversity. They must be able to acknowledge their mistakes and take other perspectives into account.

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These future leaders should understand the needs of diverse communities, even when they are not fully represented in the room. The new generation of leaders needs to understand the evolving concept of humanity. As banking institutions, we should set an example by having diversity in leadership positions. As a step to making more impact in communities, we should openly speak about the different initiatives we implement with communities to make others aware of these involvement strategies and inspire them to do the same. We need to start listening to and hearing from more people with different points of view to enrich our discussions and challenge the way we do things. It is also recommended that GABV members present their business models and success stories in schools. This would make youth more aware of the concept of values-based banking and its effect on society. By doing so, their role as leaders of tomorrow should be emphasised.

The design exchange participants drew our attention to the need of developing future leaders, those who will be making decisions based on benefits for communities and the planet, while making sure their organisations continue growing. Exposing ourselves to diverse opinions will create a better understanding of the needs around us and will facilitate more open discussions that will benefit the way we work. The leaders of tomorrow will be open to changing perceived views and will accept diversity; they will acknowledge their mistakes and will understand the needs of the people. We have to educate the leaders of tomorrow about the importance of understanding the needs of communities and considering this in the process of decision-making. Many uncomfortable conversations are yet to take place, but if we do not have them, real change will not occur.

STORY

LAPO Microfinance Bank, Nigeria Students get a hand up with the Skills Acquisition Scheme, a LAPO training programme that provides youth with marketable career skills, empowerment and a sense of community. In partnership with the Nigerian Directorate of Employment, the programme improves youthsâ&#x20AC;&#x2122; financial and life situations while training them

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in event management, interior design, plumbing, hairdressing, catering and other trades.

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PUTTING REGULATORS IN SERVICE OF VALUES-BASED BANKING â&#x20AC;˘ How do you start two-way conversations between bankers and regulators? John Laker, Chair of the Banking and Finance Oath, explained that the relationship between regulators and boards is ally-based and not threat-based. Regulators understand what position the boards have within organisations and often they are supervising the implementation of regulations. Values-based organisations work very closely with their boards to make changes to their business processes to make the organisation more values-aligned. We should use this relationship with the regulators and find ways to put them in the service of values-based banking. But how can we achieve this? Regulators should be put in service of values-based banking by promoting and encouraging conversations with boards. Laker adds that regulators are not in the business of stopping imagination and innovation. The pivotal point is to keep the dialogue going while taking risks. However, the distrust that many individuals have towards banks still exists. We need people to build their confidence in banks again and understand the benefits of values-based banking. The same goes for regulators. The values-based banking movement is already collaborating with authorities in certain countries to establish a fairer financial system. Members of the GABV took part in discussions at the European Union (EU) level to examine how to integrate sustainability considerations into the EU financial policy framework1. In 2018, the GABV Scorecard was adopted by Bank Negara Malaysia2 to support its strategy of valuesbased intermediation with a pilot group of Islamic Banks in the country. Furthermore, the GABV was involved in the consultation by United Nations Environment Programme â&#x20AC;&#x201C; Financial Initiative (UNEP FI) when creating the Principles for Responsible Banking 3

for banks which are on the journey to a more sustainable paradigm.

The participants of the design exchanges identified the main challenges between regulators and bankers being connected to the level of understanding and 1

http://www.gabv.org/news/change-finance-to-change-europe-ethical-finance-engages-european-parliament-

candidates

http://www.gabv.org/in-the-press/gabv-recognised-by-central-bank-of-malaysia

The GABV welcomes the Principles for Responsible Banking and we have supported the UNEP FI in process of

their development. We are aware that these principles are focused on the banks who are on the journey to become more values-aligned. Members of the GABV are forerunners in this field having taken this path already.

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communication between both parties. GABV members need to work harder towards building relationships with regulators. They should be able to share their perspectives and opinions. Regulators and bankers need to build relationships through their conversations and work towards a mutual benefit where the financial system will be put in service of people and will ensure that no harm is done to the planet; while profit can still be made as a result of good work. The design exchange participants suggested that it is necessary to educate regulators about the importance of values-based banking through success stories and scorecards. Verbally representing ourselves is not enough. We need to visually represent the changes we have made in our communities and environments and back this up with facts and figures that cannot be disputed. This proactive approach will demonstrate our credibility through our actions. This is the first step towards furthering our relationships. During the GABV Summit, both regulators and bankers were part of this conversation. In order to put regulations in service of values-based banking, the GABV and its members have to start working more closely with regulators and engage them in twoway conversation, providing learning opportunities and fostering an open environment of knowledge exchange. The design exchange participants also highlighted the need for both parties to learn from each other and for regulators to better understand the benefits of values-based approach. Moreover, building a trusting relationship and continuous support will result in achieving better positioning of values-based banking in regulatory frameworks.

STORY

Banca Etica, Italy Banca Etica’s Cultural Foundation delivered a survey on sustainable finance in Europe at the European Parliament in Brussels. The report analyses the performance of the 23 European ethical and sustainable banks—members of the Global Alliance for Banking on Values and European Federation of Alternative and Ethical Banks networks—matching them with the 15 European “systemic” banks as listed by the

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European Banking Authority (EBA).

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FACTSHEET

ROLE OF ECONOMICS AND THE FINANCIAL SYSTEM IN THE TRANSITION TO A SUSTAINABLE SOCIETY • How might we ignite the action necessary to change the system that drives this unsustainable growth and melting icecaps? What changes to incentives are needed in our economic system? • There is increasing demand for all things sustainable. How do you enable the members of your community to understand their power as decision makers?

One of the key missions of our movement is to bring awareness to the general public on what their investments are doing and help them understand that everyone is a banker; individuals have the power to decide what their money will do in the world. John Fullerton stresses the importance economics plays in a sustainable society. He also emphasises the importance that finance plays in driving our economic system. We have been focusing too much on only GDP as a success metric, and this is not enough. We need to tweak, harness or reinvent the wheel to move towards a more sustainable economy. We should aim to live on a planet that meets our social as well as economic needs embedded with social purpose. Our values-based banks believe in this mission. We aim to make banking more transparent and prosperity oriented. Our goal is to demonstrate that where we put our money does matter. Sheila Watt-Cloutier states that “We know the science, we know climate change is man-made and we see the effects. What is lacking in us and our world for us not to be taking urgent action?”. The biggest challenge we currently face is the lack of collective action being taken to live in a more sustainable economy.

During the design exchanges, the most common questions asked were how this change can be ignited to drive sustainable growth, and which incentives need to be changed to improve our economic system. The biggest challenge identified by participants was how to get members of their own communities to understand their role and power in the decisions they make today. Many individuals still do not realise that where they invest their money matters, and this is what needs to change.

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GABV members are already working with local communities to promote sustainable living by organising events and participating in campaigns that benefit society. A few of these campaigns include initiatives such as donating clothes to charity, supporting renewable energy plants, adapting community houses to house the homeless, and many others. They engage in these activities because they believe that through actions like this, they support local communities and are helping people in need. This work is not done to end up in any impact report or to be used as a media opportunity. The call to action is that we need to build on this and extend our work to inspire others to follow our lead and partake in such initiatives. As GABV members we need to make ourselves more aware of the challenges and solutions of living more sustainable lives. A participant from a design exchange says that we have been focusing so much on the “more,” more resources, more return, more of everything, that we do not look for individual contribution. It may be simpler to find solutions that reduce consumption at an individual level. We need to be able to learn about and educate our communities about these sustainable decisions. Economics should take into account all the needs of our communities while understanding the impact on the planet. The financial sector can help by providing a voice for those who might not be heard. Each community should be included in the decision-making process, especially if the decisions made will have a big impact on their future. To achieve this, Hdeal Mohamed suggests that we “bring someone into the conversation that you would not usually bring. Whether it is someone from an NGO or people really close to the problem and do not be afraid that they are going to be critical of what you are doing.” We need to shift our economic investments from initiatives like oil and tobacco towards more sustainable ones. To do this, we need to bring people who understand these issues into the conversation through partnerships.

The role of economics and the financial system in the transition to a more sustainable society is crucial since it has a very important place in our society and the world. Money, production, distribution and consumption of goods and services touches all of us, but also it has a big influence on the world we live in. The design exchanges recognised that it is necessary to make people understand their role in this system – it is not passive; they have active roles to play. They also recognised the need of more socially beneficial activities that are genuinely focused on improvement of society and not only on improving the image of the organisation. GABV members should continue to listen to the needs of local communities while also taking more active roles in inspiring others to follow these trends.

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STORY

NMB Bank Limited, Nepal Nepal entrepreneur Mahasher Rai runs his stationery business and press with solar power from a microgrid, thanks to a sustainable loan. This initiative serves as a model for Nepal, where 33 per cent of the population has no access to electricity, and much of the rural population must live in darkness after nightfall or rely

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on kerosene and battery power. With his solar microgrid, Mahasher now has the capacity to offer basic computer lessons at his shop.

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FACTSHEET

DEVELOPING A FINANCIAL SYSTEM THAT IS INCLUSIVE AND ACTIVELY REDUCES INEQUALITY

â&#x20AC;˘ The question for us is how can money and banking services contribute to disrupting and changing the structural power paradigms that limit diverse participation and undermine social and economic inclusion?

The current financial system is not seen as being inclusive nor does it actively work towards reducing inequalities, but how can money and banking services contribute and influence the change and start being used to address these issues in society? Values-based organisations recognised the importance of developing a different financial system that represents every community. Like-minded organisations and members of the GABV understand that leadership should not be defined by ethnicity, gender or age. People need to be seen for who they are and not where they are from or who they associate themselves with. Representing diversity is not enough, and we need to take next steps to promote a financial system that is inclusive and that actively reduces inequality. During the Summit, we heard that diversity does not equal inclusion. Although diversity can be represented in the economy, it does not mean that people are truly part of the conversation. Organisations should go beyond merely representing a diverse community by acting upon their needs and opinions. The Global Alliance for Banking on Values is working hard to transform this way of thinking into more productive actions and bring communities to the table by including them in the conversation. The GABV believes that the communities we work with and work for should be represented in the financial system and be able to openly express their opinions. This is how we achieve greater change and success. The question for us is how money and banking services can contribute to transforming and changing the structural power paradigms that limit diverse participation and undermine social and economic inclusion. The

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participants of the design exchange also highlighted that leadership plays a vital role in developing a financial system that is inclusive and reduces inequality. Our leaders have the power to invite more voices to the table and create a safe environment that welcomes every voice. GABV members have a strong track record of impact investing and microcredit lending to bring marginalised segments of the population into the financial system, while small business financing and mobile banking are working to reinforce social and gender inclusion. The financial system must also take on new initiatives to overcome the biases and social injustices that persist. In order to develop a financial system that is inclusive and actively reduces inequality, we have to take part in more initiatives that support gender inclusivity, support the unbanked to access financial services, and promote equality across all levels. This could include everything from gender neutral bathrooms to gender inclusive products, financial education, development of different community representatives, and more. Organisations should start making every individual more welcome and safer in their work environment. Only when we bring more diverse people into the conversation will this landscape change. Before we take these initiatives, the first step is to address the gaps and find the right solutions.

The design exchange participants recognised that GABV members need to take a stand to identify the needs of community and act on them. Only by doing so will we be truly (gender) inclusive. Transforming the financial world to be more inclusive and fairer requires us to be more daring and to continue to draw inspiration from the stories of people who we wish to work with. Values-based banking gives a voice to those who have none, and together we must create opportunities for development and improvement of our communities.

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STORY

Freie Gemeinschaftsbank Genossenschaft, Switzerland As a community of parents, teachers, and students, Rudolf Steiner Schule Mayenfels is open to all social classes, regardless of ethnic origin, religious and political stance, and economic situation. The new school building is a little oasis, surrounded by grazing zebras, sheep, and cattle. Financing the Rudolf Steiner Schule Mayenfels helps Freie Gemeinschaftsbank carry out a mission of supporting proactive people

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and groups that implement projects to provide meaning for humans and nature.

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TRANSFORM OPINION OF THE PEOPLE ABOUT BANKING AND THEIR ROLE IN THE FINANCIAL SYSTEM • How do we rebuild trust in traditional financial institutions?

The Global Alliance for Banking on Values wants to transform the world of finance and advance the position of the financial sector as a positive contributor to society. We are working to promote the importance of values-based banking culture internally and externally. One of the reasons behind so many unbanked individuals is their distrust in banks. The GABV is working hard towards rebuilding this lost trust that individuals once had in the banking sector. “The trust in banks has been lost and regaining it is a slow and long task. In many countries, the GABV is working to rebuild that trust,” states John Laker, Chair of the Banking and Finance Oath. According to a banking survey conducted by the American Enterprise Institute1, results show that the reputation of banks has dropped over the last years. This is mostly due to the scandals that have uncovered unequal wages between male and female employees. Another large factor is the lack of social responsibility undertaken by banks. Values-based banking has to work to promote good practices in order to transform the distrust in banks, while inspiring the change within the industry. Design exchange participants recognised that consumers should be made more aware of the existence of GABV banks and their role in the financial ecosystem. They also suggested that transforming the opinion of people about banking should focus on regaining the trust that traditional banks once had. When the topic of banks is discussed, their reputation should be analysed. This includes taking into consideration their social and environmental activities.

One of the reasons for distrust in banks is lack of transparency and questionable actions. However, a lack of diverse representation also affects the public’s perception towards the banking sector. GABV banks must demonstrate how values-based banking works towards the social welfare of society. This can be done by promoting the initiatives that our GABV members are currently taking. Our member success stories need to be shared, and values-based 1

http://www.aei.org/wp-content/uploads/2018/09/Public-Opinion-10-Years-After-the-Financial-Crash.pdf

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banking needs to be recognised in the eyes of the public, policymakers and regulators. There are many ongoing challenges that currently affect the perception of the financial system. However, there is no one-size-fits-all solution. Peter Blom, Chair of GABV, believes that we must define our agenda to change the mindset that consumers have towards the banking system. We can start by introducing the values-based approach of banking and promoting it. However, people have to understand their role in the financial system as well. Understanding that we are not only passive participants in the system, but that we have the power to change things for the better will help us to influence the change of the system. Actively promoting the need to align your banking choices to your values will help values-based institutions to gain more clients and to become more relevant in the financial world. This will also support better distribution of power in the financial sector and will give the valuesbased banking a fair chance to stand up to mainstream institutions. Another recommendation is that we look towards partnerships that can help us further promote values-based banking by engaging in more important campaigns and initiatives. Partnering with organisations like the Rick Hansen Foundation and the Global Fund for Women can help with ongoing issues of social inclusion and womenâ&#x20AC;&#x2122;s rights.

For years, the banking sector has been losing trust due to lack of transparency, scandals, and inequality. However, not every bank is the same. Values-based organisations are working hard to regain trust that the banking sector is in service of people. During the design exchanges, many recommendations were focused on how to regain trust in banking, but also how to ensure that people understand their position within the banking system â&#x20AC;&#x201C; they are not only passive participants, but they also have the power to influence the change they seek. People have to start thinking about what their money is doing and how aligned their banks are to their values. Values-based organisations should continue to actively promote business models that put people and the planet ahead of profit, while still managing to achieve solid returns as a result of good work.

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STORY

Vision Banco, Paraguay Over the last decade, many families in Paraguay found themselves at the centre of the country’s housing crisis. With no access to credit or housing, the situation was dire. Vision Banco answered this need with a “Constructing Dreams” plan, a partnership with international organization Habitat for Humanity, based in Paraguay. To date, this product has helped build more than 1,500 homes throughout the country, while more construction companies have signed contracts to meet the high

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demand. With more development in the planning stages, Constructing Dreams has been recognised as one of the best projects in Latin America.

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CONCLUSIONS

CHAPTER SIX

CONCLUSIONS CEO Summit Summary reflections

uring the final session of the Summit, CEOs and next generation leaders gathered to reflect on where GABV banks should focus their attention over the next 5-10

years. The following insights were shared: • Continue to build a strong brand identity with values-based banking culture as the foundation. Co-workers must live and breathe the principles that are modeled by leaders of the movement. • Make the logic of our values-based ecosystem clear. Mainstream banking will pick up the values, language and logic of what we do, and values in banking will become more commonplace. The difference is that traditional banks must regain trust, while values-based banks, in the way they have worked to live the values and principles of values-based banking, can reinforce and strengthen their place and relevance in the banking ecosystem. Don’t get stuck on the GABV itself. Dig deeper, look beyond the fact that we are values-based banks. What is the system or logic of being a values-based bank? We must be able to articulate more of who we are in a way that traditional banks can’t easily borrow but would be willing to follow.

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• Do more to on-board new banks. Create mentorship between CEOs and build better ways to share what we do. Recruit more banks and reward them. Keep our standards high but show newcomers the way to rapidly progress their adherence to the principles. • Avoid diluting the values as the GABV grows larger. Take steps to reinforce commitment and participation. • Shift the emphasis from assessing the fit of new members, to helping existing members better understand values-based banking. Be bolder, be faster. • There is much information and knowledge within the GABV banks. And everyone operates in their own context. Values-based banking means that we do not need to reinvent conventional properties such as compensation concepts. A lot of practices in our banks need to be a shared curriculum of best practices. Sharing solutions is relatively easy, as most GABV members are not competitors; make use of this. • Most GABV members are member-owned and not publicly traded. They have a totally different way to connect to their communities through their ownership. There should be a clear connection to their communities through their ownership structures. • Look at lead innovators. If you are small and cannot compete with bigger organisations, provide support across our network to those that are small. It’s

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not through volume or scale that we can compete in the market. It is through our unique features and sense of social, ecological and prosperity commitment. • Continue to measure and track our progress, as this is a foundation of our credibility as values-based banks. The emergence of carbon tracking of our portfolios will be an important next step that will drive systemic effects. Measure equity and inclusion. Enforce our measures by holding banks accountable. • The GABV can have a multiplying effect by partnering with foundations, NGOs, faith-based institutions, multi-laterals and policymakers. • Build a GABV Innovation lab. Co-design with clients rather than standardise products. This will enhance the inclusion element of what we do. Share more innovation that belongs at the bank level. Build multi-stakeholder models. Have a way to equitably share amongst members, such as a GABV reward model.

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Humans have experienced a relationship with a banking sector based on an economic paradigm in which short termism, profit and shareholder value have been top priorities, and with bankers that might have been trapped in the struggle between their own deep inner beliefs and the system they work in. The system we have created becomes a jail. The system becomes a living entity and defends itself from the same human beings that created it. The system is here to stay since it supposedly represents rationality, efficiency and the right way to do things. But in the end only we have the capacity to redefine the priorities of the systems we have created, and economics and banking are not an exception. We can get rid of the jail we have created and humanise the system. We bankers must go back to the essence and revisit the human purpose of our profession. We sometimes feel devastated with our day-to-day challenges: the digital threat, the market position, the regulatory environment, the need to remain profitable â&#x20AC;Ś and those challenges do not let us see the big picture. We are so overburdened by the complexities that we forgot about the essence. We are so trapped by the banking

THERE IS HOPE

system we have built that we believe change is impossible. Iâ&#x20AC;&#x2122;m convinced that many bankers reading these sentences will be moved and will recognise themselves in those dilemmas. But there is hope. We can redefine banking and, if we do, banking will play a crucial role in a broader regeneration of the economic system. We have to believe it is possible and it is because the banks and the ecosystem of the Global Alliance for Banking on Values have proved that it is. Six hundred people meeting in Vancouver in February 2019 to celebrate the 10th anniversary of the Global Alliance for Banking on Values concluded that it is possible to humanise finance and to build a financial system that serves all. This book gives us the inspiration and insights to provoke a massive change in the banking industry to start a new decade in which all banks become part of the solution to the challenges we face. Sometimes we might feel overwhelmed by circumstances, but I am optimistic that by the time you have finished reading this book, your hope will be renewed. Dr. Marcos Eguiguren Executive Director Global Alliance for Banking on Values May 2019

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Glossary Key words B Corps - Certified B Corporations are organisations that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. GHG emissions – Green house gas emissions are caused due to the emission of various gases into the earth’s atmosphere. This contributes to the green house effect, which traps the sun’s warmth’s in the earth’s atmosphere. Metrics – Metrics are a form of numerical measurement for achievements or processes. Real economy - The real economy compromises of enterprises and individuals settled in productive and sustainable economies. These geographic and sector-based communities are dedicated towards the production of goods and services that benefit the society. Regenerative capitalism - Regenerative economics is the application of nature’s laws and patterns of systemic health, self-organization, self-renewal, and regenerative vitality to socio-economic systems. Regulators – These are authoritative bodies that oversee operations of organisations. They have the right to legally review business practices, in this case, for financial institutions. Social inclusion – The process of ensuring that every diverse individual feel included, heard and acknowledged in society. Sustainable economy – A sustainable economy is one that aims to meet the needs of humans that sustains the environment and natural resources in the process. The Scorecard - The scorecard is a metric designed by GABV to assess values-based banks. It is an assessment system focused on concrete results and impact delivered by values-based banks, relying on both financial and non-financial results. This tool is designed to monitor performance and maximize the impact on society. Values Based Banking - Values-based banks use finance to deliver sustainable economic, social and environmental development. They focus on helping individuals and enterprises in the real economy to deliver positive returns to communities locally, regionally or globally.

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Phrases Disruption - The mission of the GABV is to change finance and make it more focused on people and planet. In order to achieve this mission, the GABV is working on disrupting the current thoughts and views on banking and financial sector. Connection - The members and partners of the GABV work closely with their local communities and clients to identify the needs and create solutions and products as a response to the need. To achieve this, we need to resort to establishing stronger connections between the clients, the banks and the governments. Transformation - The GABV wants to transform the world of finance further and advance its position in the society. We are working on promoting the importance of values-based banking culture internally and externally. Themes Migrants – This theme aims to shed light on the majority of migrants, refugees and individuals that are not treated the same by financial institutions and remained unbanked to this date. #MeToo - This theme focuses on giving a voice to the unheard and showing them that their opinions and needs matter. Melting Icecaps – This theme takes a closer look at the current affects of climate change and the urgent need for action to save our planet. Acronyms EBA - European Banking Authority GABV – The Global Alliance for Banking on Values LGTBI+ - Lesbian, Gay, Bisexual & Transgender NASA – National Aeronautics and Space Administration NGO – Non-Governmental-Organization PCAF - Platform for Carbon Accounting Financials UNEP - the United Nations Environment program UNHCR - United Nations High Commissioner for Refugees UN SDGs – United Nations Sustainability Development Goals

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Edited and written by: Marcos Eguiguren Paula Martin Tom Cummings Jasmin Panjeta Rebeca Pastor Berezo Jesica Cooray Pau Marcos Special thanks to Vancity, Verity CU and Heidi Wesley-Cleveland

Global Alliance for Banking on Values Nieuweroordweg 1 PO Box 55, 3700 AB Zeist The Netherlands T +31 (0) 30 694 30 62 E mail@gabv.org www.gabv.org #bankingonvalues The Global Alliance for Banking on Values is an independent network of banks and banking cooperatives with a shared mission to use finance to deliver sustainable economic, social and environmental development

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