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Foresight Design's Emily Pilloton recently spoke with Ilsa Flanagan about LaSalle Bank’s efforts and sustainability other opportunities for the business community in Chicago.
Tell me a little bit about what your role is, how you became involved in the Chicago Sustainable Business Alliance, and how your role pertains to issues of sustainability, etc. What investments the bank has in sustainable business efforts, and more specifically, how you work to further those efforts?
Over the last year we have created a 4-pronged sustainability agenda for the bank. One of the four prongs is developing sustainable business products and services for clients. To that end, we are meeting with and talking to existing clients about what their needs are and how we can help them to be more sustainable, anything from a family-owned manufacturing company in Michigan to wealth management clients and looking at SRI funds, so it’s sort of a broad list of potential business products and services.
Some of the more obvious things the bank is focused on, because we have such a big real estate division are green buildings. We’re also looking at ways to enter the voluntary carbon market, and structuring products around that for our clients. We’re looking into an energy efficiency lending program for our manufacturing clients. That’s the business focus of the plan.
The other prongs are reducing our own footprint, or just looking internally at the bank’s operations, and the effect that has on the environment. For example, we’re getting our three main buildings LEED certified, and greening our branches. We’re looking into greening our supply chain and we’re ramping up our recycling program; in fact we offer battery recycling for all of our employees.
The other two prongs- one is adapting the global risk policies that have come out of the headquarters office in Amsterdam around sustainability issues. We have a whole series of risk screens through which deals need to be analyzed, such as oil and gas, mining, gaming etc. But most of them are not applicable to US deals, so we’re just trying to adapt them to what our needs are here, and looking at what risks we may be exposed to around environmental and social issues.
The fourth area is stakeholder engagement. This includes anything from working with the city and non-profit partners around these issues to an environmental grant making program to doing internal and external communications around what sustainability means for our bank.
In terms of your position within Chicago, how do you see Chicago as a city being open or amenable to the particular programs you’re proposing? How do you see these efforts being received?
Certainly the city, between the Mayor and the local government, are very supportive of encouraging local businesses to be more sustainable. We really appreciate the fact that we can work with the city on this (such as greening the marathon), and we want to support local businesses being more sustainable, so there’s a lot of value in a group like the Sustainable Business Alliance. But I’d say it’s really more of our connection to Europe and our European and Brazilian sister banks who have been leaders in sustainability that has informed LaSalle’s efforts, and provided good examples of things it can do to be more sustainable.
So you think the precedent comes from Europe and some of your sister companies?
For us, yes. I just think there’s more of a sense of urgency in Europe, and in Brazil, around these issues, than there is in the United States. Whenever I’m around town talking to clients or non-profit partners, they can’t think of another local bank that has a Sustainability Director (other than ShoreBank), or is even looking at these issues. So it does seem like Chicago is way out in front in terms of major American cities.
How do you think that financial institutions in particular, regardless of their size, can benefit from sustainability?
You hear the statistics like the number of people who make purchasing decisions based on their values. They go to Patagonia or Whole Foods because they don’t want to, for example, buy products from a company that is doing bad things to the environment. Eventually that’s going to trickle down to their bank as well. If they have an option to choose between the bank across the street and a bank who cares about these things, and is reducing its own footprint, and offering sustainable business products and services, those are all reasons they’d want to bank with us instead. That’s sort of at the most basic, retail level.
I’d say for the larger clients or developers, I think the fact that they can call a lender here, or talk to me, and we can understand the language of green building, is a huge selling point. They don’t have to spend the first two hours educating the lender on why they’re building green, and what the value is, and why it’s going to cost a little more. We get that right away.
How does your commitment to sustainability further your business/networking/social efforts? Do you feel like it opens up new networks for the bank or that it provides new channels?
I’m not sure yet. I think we’re so early in the process, and that was one of the reasons I joined the Alliance. I mean it certainly has, for example, if I sit on a panel, at a conference, and talk about financing green buildings, I usually get at least a couple calls from developers around the country saying we’re considering this particular deal, would you be interested? Because most of the builders that are building green right now are doing it because they believe in it, so they want to bank with someone who believes in it too. So I would think that similarly, networking at events like this would kind of spread the word in a really soft way that LaSalle Bank cares about these things.
As sort of a general thing, obviously coming from a financial institution you may have a specific definition, but as a broad idea, how would you define sustainability?
We thought about that a lot here; we looked at a lot of different definitions, we looked at the equator principle’s definition, and we looked at ABN AMRO’s definition. For LaSalle, our definition is “integrating environmental, social, and ethical practices and policies into our business.” We really were thoughtful about that, because I think for most people, sustainability doesn’t mean anything, or it means a lot of different things. So for us that was kind of the broadest but most succinct way to put it. Internally and externally. Not just in our own operations and our buildings and how we treat our employees and what kind of programs we offer them, but also, what kind of clients do we take on, what kind of clients do we want to attract because of the way they do business? How much do we want to be a part of the public debate around some of these issues?
Being in Chicago, are there any sustainability-related resources that are missing or overlooked in the Chicago area? In particular, areas of opportunity specific to Chicago for other businesses in general, etc?
One of the things I was surprised about was that we had this event a few weeks ago around green buildings for developers, and a lot of developers who were there, who all live in Chicago, had no idea that the city was offering incentives to build green. So for some reason that information’s not getting out there.
We’re thinking that’s a service that we could provide, to let people know about programs like that. It seems like the information is not getting to the people who are making decisions about how to build. If they knew that these benefits were available, if they knew there was this expedited permitting process for example, they’d be more likely to consider building green. It’s not collected and housed anywhere, so I’m not really sure where people go for that information anyway. It would be great if Crain’s had a green column, for example.
How do you think being part of the Chicago Sustainable Business Alliance will help your efforts?
LaSalle at the moment is really still in this phase of trying to create its programs. So the more we can talk to residents of Chicago, whether or not they’re clients or prospective clients, it’s great to get a sense of what their issues are around being more sustainable. The more informed we can be, here, about what kind of services and products we want to provide, or even what kind of grants we want to make in the community, we have a better sense of what people perceive as the larger issues around sustainability.
But also, information going out- just being able to educate other businesses about what we’re trying to do at the bank, and getting feedback on the programs, and maybe even having little test pilots where can test out products or services, among smaller, like-minded businesses. And the smaller-sized businesses, in the past, have been really good clients for the bank, LaSalle’s been in the Chicago community for so long, and it really likes to support smaller businesses. So I think it would be nice to see us re-engage with that segment.
