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GREEN FINANCIAL POLICY AND THE COMMONS by Goran Jeras (Ethical Bank, Croatia) at Green Academy 2014/08/26 module ECONOMY
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GREEN FINANCIAL POLICY AND THE
COMMONS!
Green Academy, Ecommonize, 26th August 2014 Goran Jeras
2!
1. Green investments from mainstream perspective
2. Ethical banking and ethical and green financing
3. ebank in Croatia 4. Perspectives and vision
CONTENT!
3!
• 2 trillion USD/year* - current estimates for needs of investment to green infrastructure (in order to achieve current policy goals)
• only ~50% are actually realized • Faced with number of issues
– policy – regulatory – know-how and understanding – pressure for competitive returns – long-term horizon
• Classical instruments consider only financial goals
Source: OECD
CLASSICAL PERSPECTIVE!
4!Source: OECD
5!
• Risk/return profile of green investments is just not attractive enough under classical model
• Hidden environmental costs not visible in accounting
• Lack of knowledge and systemic approach • Inconsistent policies • Requires much deeper correlation with societal
and environmental goals and shift in the economic paradigm
• Reorientation of financial thinking from short-term to long-term
NEED FOR NEW INSTRUMENTS?!
6!
ETHICAL BANKING?!
Impact investment
Social capital
Ethical consumerism
Ethical banking
7!
• banking has its roots as a service with strong social impact (saving banks, mutual banks, credit unions)
• from early 1930s banks are starting to shift their business to market operations
• by the beginning of 21st century, lack of credit for development is creating new need for a banking with stronger focus on the real economy and social impact
• ethical banks are focusing on local real economy by financing SME’s, social enterprises and civil sector
HISTORY OF ETHICAL BANKING!
8!
• FEBEA – Federation of European Ethical and Alternative Banks (27 banks from Europe)
• SEFEA – investment fund of FEBEA • GABV – Global Alliance For Banking on Values
(25 countries, 5 continents, 10 million customers, 100 billion USD)
• Cooperative banks • Saving banks • Mutuals
GOOD BANKS!
9!
• main objective is to provide finance services for common good – right to credit
• promote social inclusion, sustainable development, social economy development and social enterprenaurship
• raise awareness about role of money in the society development and necessity of long-term planning
• source of capital is in deposits of their customers created by activities in real economy
• fund projects with positive economical, ecological and social impact
CHARACTERISTICS OF ETHICAL BANKS (BY FEBEA)!
10!
• close relationship with customers (consulting) • low investment risk due to good understanding
of customer’s businesses • customers involved in bank governance
structures • special focus to social inclusion and
employment • solidarity within bank but also with other ethical
banks • absolute business transparency • ethical bank does not speculate
CHARACTERISTICS (CONTINUED)!
11!
• ResInvest • Citizen Energy initiative • Renewable energy guarantee scheme • Green fonds and green bonds (Triodos) • Establishment of comprehensive hybrid
instruments
FINANCIAL INSTRUMENTS IN DEVELOPMENT!
12!
• Ethical development bank in Croatia • Owned by Croatian capital (member’s bank) • Support for development of real economy
– sustainable ecological agriculture & tourism – manifacturing and processing companies – green energy / citizen energy – IT services, new technologies and innovations – ecological projects – social enterpreneurship
• Bank as a service to the real economy – not an isolated profit-making entity
ABOUT EBANK PROJECT!
13!
classical bank
ebank
INNOVATIVE APPROACH!
14!
• state-of-the-art IT platform • crowdfunding and peer to peer lending with
bank's guarantees • semi-automatic accounting and project
management for clients • liquidity ensurance for legal entities • mediation and arbitration platform • consulting for development • clustering infrastructure • various other financial logistics
ADDITIONAL VALUE!
15!
CURRENT STATUS!
16!
• 22nd April – Cooperative formed (>100 members)
• huge media attention (national TV, all newspapers, dozens of interviews)
• hunderds of inquiries from companies, non-profits and individuals
• interest from government bodies • established network of partners throughout the
country (more than 300 entities) • partners have reserved about 8M EUR for the
foundation of the bank
CURRENT STATUS!
17!
• Formation of cooperative distribution of energy • Support to energy cooperatives • Financially positive house building • Distribution of organic food • Support for local currencies • Sister banks using the same platform in other
countries (open-source community)
FUTURE?!
