In the beginning of December 2010, Mr. Bierman, Managing Director of Triodos Bank Netherlands, gave a publicly accessible lecture at the School of Business and Economics of Maastricht University. A few things that he mentioned during the lecture stood out. I listed them in no particular order.
- Awareness of every member of a society about the function of money is the key to a sustainable future. If, for example, consumers realize that the money they deposit in their bank is may be used by the bank for any loan the bank deems appropriate, many would withdraw their money. It is therefore imperative to realize that any bank as a huge responsibility in deciding where and often also under what conditions a loan is being made.
- Banks that adhere to their traditional role – funneling depositors’ money into sensible loans – should be the only institutions that enjoy a depositor’s safety net by the government. For example banks that use that money to speculate, often not on their customers’ behalf, should be excluded from such a scheme.
- Money, when deposited on a bank, doesn’t lie there in a safe. It is being used, for example, to loan to businesses or even to bet on asset prices. It is another, narrower, perspective of the first point being made.
- “Economic fundamentalism” is when pure financial cost-benefit considerations are the only criteria by which a loan is judged, when maximizing shareholder value is the only purpose of a company, when a country’s GDP is the focus of the well-being, or when the stock market is an indicator for economic health.
- Members of society have become disconnected from its society. For example, consumers don’t contemplate about the consequences of purchases, or producers don’t take environmental considerations into account. Human beings are unconscious about the repercussions of their actions on their society in a broad sense. This links nicely with the first point made.
- The natural flow of an ecosystem is not being taken into account. Everything, in some way or another, is part of a process where it comes into being and later degenerates. We should adjust our way of living on this cycle; instead of overly emphasizing the consumption we should also be conscious about recycling or sustainability of the products we consume.
- Triodos Bank is a nice example where having a positive impact is done and at the same time money is being made. However, the emphasis is on money as a means, not an end. Profit is needed to keep the business running and to enable its employers a decent living, but it remains a tool to realize for example the vision of the company – in this case to realize the values of Triodos Bank.
- Art, music, theater and so on are seen as investments that have a positive impact on society. For Triodos Bank – according to Mr. Bierman – what is good for society is also good for Triodos Bank.
- Since Triodos Bank does not engage in interbank lending, the low interest rates of the EZB are not benefitting Triodos Bank directly. On the contrary, it is putting pressure on its operations as depositors expect a decent return on their deposits.
- Microfinance is really important because it makes the relationship the lender and borrower an equal one: once the loan is paid off, there is no leftover dependency or any feeling of obligation or even guilt. This is in stark contrast to aid programs.
Additionally I would like to raise attention to an interesting speech by Peter Blom, CEO and Chairman of the Executive Board of Triodos Bank. Recently he was invited as a member of the Club of Rome. Upon receiving the 2010 Botwinick Prize in Business Ethics at Columbia Business School, Mr. Blom touches, from a banker’s perspective, on many important aspects of the role of a bank, the role of money, and the increased consciousness of customers. His speech was captured on video and can be found on youtube.
It strikes me as particularly important that there are individuals who seem to have a solid grasp of some of some of the pressing problems of our times (such as the role of banks), and at the same time speak at such events and places. Thereby they may reach younger people that will at some time have some say in the conduct of world affairs.
At the same time I ask myself: where is the much-needed economic debate about a future, post-crisis sustainable economy? A refreshing place to start may be the Centre for Associative Economics in England with its monthly newsletter and its regular lectures. But where is the mainstream debate about changes necessary to adjust to a sustainable society?