Ethical Investments
February 11, 2007
While the VIPs of German and international banking wheel and deal in mirrored Frankfurt conference rooms, GLS officers recently meet in far-away Bochum to decide how its clients' money can be ethically and ecologically invested.
According to Thomas Jorberg, the spokesman for the bank's directory board, more and more Germans are choosing to put their money to work in a socially responsible manner.
"Last year we experienced growth of 105 million euros ($136 billion)," he said. "That's about 19 percent growth and twice as much as the years before when we had about 50 million in growth per year."
Growth expected to continue
Jorberg added that he expected growth to continue in 2007 as he said the bank continued to notice a growing interest in the investment options GLS offers.
Founded in 1974, GLS is Germany's first ethical-ecological bank but is no longer alone in offering socially responsible investment opportunities to Germans, who are traditionally known for their environmental consciousness.
The Umweltbank (Environment Bank) in Nuremberg also said that in 2006, it grew by 125 million euros and added 7,000 new customers, bringing it total to 52,000.
Variety of options
According to a report on sustainable investment, around 4.1 billion euros were invested in a socially or ecologically responsible manner in 2005, and customers were looking at the possibilities for a number of reasons, according to the Michael Schröder of the Center for European Economic Research in Mannheim.
"In addition to finding companies with sustainable futures, the most important impulse for the growing interest is a desire for investment security," Achim Gilbert, who head's Dexia Asset Management's German division of corporate investment, told the Handelsbaltt newspaper.
While the amounts of money such banks take in look paltry compared to major international banks -- there were some 659 million euros at the bottom of GLS's balance sheet -- revenues are growing and getting the larger banks' attention.
Keeping an eye on investments
Though there is no exact definition of what makes an investment socially, ecologically or ethically sound, Germans are currently making use of over 80 different investment opportunities labeled as being socially responsible, many of which are offered by major banks.
"Market research has shown that about 10 percent of the population belong to post-material or culturally creative groups of people who place an importance on their consumption and investment behavior," Jorberg said.
He added that GLS appeals to them by offering interest rates similar to major commercial banks but by giving them an option of having part or all of their returns funneled into low-interest lowns for projects that meet the bank's ethical and ecological standards.
Jorberg said about 15 percent of customers take GLS up on the offer, allowing the bank to finance a total of some 4,000 projects with 328 million euros. About 28 percent of the loans go to private housing projects and nearly 12 percent are dedicated to renewable energy operations.