Opinion 23: 'Idealistic banking is a useful marketing instrument'
The Netherlands is one of the world’s leaders in idealistic banking. It is a perfect export product, says Bert Scholtens, Professor of Sustainability and Financial Institutions. However, he claims it is difficult to make a real distinction between idealistic banks and so-called 'classical' ones. ' Of course idealistic banks such as Triodos and ASN are more selective in their investments, but at the end of the day they too simply have to earn money.'
Triodos and ASN only finance responsible projects. Idealistic banks thus hardly distinguish themselves by what they do, but rather by what they don’t do, says Scholtens. 'But ideals are not only to be found in the areas of nature, the environment and human rights. In the area of social matters it is perfectly possible that a bank like the Rabobank does much more for society, for example by sponsoring local sports clubs or by stimulating its personnel to do volunteer work.’
Idealistic banking appears primarily to be a useful marketing instrument. ‘People are bound to believe a bank that keeps claiming it invests in green and sustainable products, but of course you should only say that if you really do it too. There’s hardly any other industry in the world where trust plays such an important role as in banking. Hence the expression that people change partners more often than they change banks.’
Scholtens does, however, welcome the enormous growth in idealistic banking. ASN and Triodos invest in matters such as organic agriculture and projects in the field of microcredit in developing countries. Scholtens: ‘They are taking a broader view, not only focusing on financial matters, and that of course is a good development.’
Many large banks also have idealistic roots, says Scholtens. ‘Even though they are not always very prominent any more. Of course it’s nothing to be ashamed of. In addition, since consumers often find it difficult to find out what exactly a bank does with their money, it can be very beneficial for a bank to show a clear interest in other matters than just money and making profits, for example in sustainable investments, particularly now that sustainability is such a hot item in the media.’
‘Companies take a leading role when it comes to sustainable investment and socially responsible entrepreneurship. Government institutions have not advanced nearly as far as the business world.’ This doesn’t surprise Scholtens, as business is in much closer contact with society. A theme like climate-neutral living is becoming increasingly important to people. Companies cannot ignore this fact.’
Room for new initiatives
Scholtens believes there is certainly room for more banks in the idealistic field. More branches of Triodos and ASN, for example, but new players as well: ‘The very large banks can be regarded more or less as oil tankers. They have taken a certain direction, from which they cannot suddenly deviate. Therefore, with more and more people opting for idealistic banking, there is room for new initiatives.’
Bert Scholtens (Loppersum, 1959) studied General Economics at the RUG. He gained his PhD at the Universiteit van Amsterdam (UvA) with a thesis entitled 'Towards a theory of international financial intermediation', while working as a policy official at the Postbank. After graduating he worked as University Lecturer (UD) in International Economics and as UD in Financial Institutions at the UvA. In 1999 he transferred to the RUG, where he became UD in Finance, Investment and Accounting. In 2001 he was appointed Senior Lecturer (UHD) in Sustainability and Financial Institutions and in 2005 he became Professor (endowed chair) of Sustainability and Financial Institutions.
Note for the press
Prof. L.J.R. Scholtens, tel. (050) 363 70 64 e-mail: l.j.r.scholtens rug.nl
|Last modified:||15 September 2017 3.10 p.m.|