Climate change needs a capitalist reformation, banks can take lead

As part of its series “The Business of Climate Change,” which highlights the climate views of business men and women throughout the state, The Invading Sea spoke with Ken LaRoe, founder of First Green Bank and founder, chairman and CEO of Climate First Bank, which is scheduled to open June 1 in St. Petersburg.

Here are some highlights from the interview.

Tell me a little bit about Climate First Bank — why you started it and what makes it different from other banks.

This is the existential challenge of humanity. I felt like I had to try to do something to make a difference and make a bunch of people a bunch of money. I consider myself a rabid capitalist, but I’m also a rabid environmentalist, and I think the two have to go hand in hand.

So, the premise was, what can we do to actually make a difference? And when I thought about, well, our buildings are all going to be LEED certified, they’re going to be covered with solar, we’re going to be net-zero, right, we’re going to be paperless — big deal, that’s just a flea on the back of an elephant in the big scheme of making a difference.

So, I happened to be concurrently reading the book “Drawdown,” and the light bulb went off and it’s like, oh my God, this is it, there’s 100 initiatives in this book that can be done today. And what I need to do is go through those initiatives, figure out what a community bank can actually affect, and then design programs and services around those initiatives. And that’s what I did.

You’re from Central Florida and Climate First Bank is headquartered in St. Petersburg. What kind of climate related changes have you witnessed there, and what environmental issues are most concerning to you?

We had actually stopped lending to homeowners that want to purchase a home on the water, and there were a number of other lenders that did the same thing. And I think that’s going to continue to happen throughout the state of Florida.

But what I experienced in Central Florida, and I live right in the middle of the state, is just the oppressive heat that we never had before. And I live four miles from my 83-year-old dad. He lives in the house that he grew up in, that I grew up in, and our family has been here since the early ‘20s, and every year Dad says, “this is terrible. I’ve never, ever experienced anything like this in my life,” and the species change that I see going on around us, birds that I’ve never seen before, birds that used to be here that aren’t anymore, insects that I’ve never seen — you know, all that.

Banking probably isn’t the first industry that comes to mind for most people when they think of climate action and sustainability. How are they connected?

The really important thing is finance is an extremely powerful tool, and you can do extreme amounts of good and extreme amounts of bad. If the pressure would get ramped up on Bank of America and Chase and City to stop lending to dirty energy — and I’ve read opinions and articles that if you denied bank funding, then the market will backfill.

Private equity funds will flow in. Yeah, they’ll flow in at four times the interest rate. You know, it changes the economics instantly if banks don’t finance stuff. One of our mottos is “changing finance to finance change,” and it touches everything.

What changes are needed in the banking industry as we as a society try to combat the effects of climate change and sea-level rise?

Bankers need to wake up and stop financing evil, whether it’s for-profit prisons, industrial agriculture or dirty energy. The other thing that needs to happen is bankers, especially the community bank-level, need to stop saying that because they’re a member of the Rotary Club, they’re actually contributing to their community.

That is not contributing to their community, and that’s not putting their money where their mouth is. The other thing is political activism and the statusquo bankers supporting Republicans and right-wing causes has got to end. There needs to be a capitalist reformation, and banks can certainly take the lead in that.

How can consumers make their banking more climate-friendly?

Bank with us or a bank that’s a member of the Global Alliance for Banking on Values or even — most bankers would just shudder at this comment — bank with one of the neobanks. They aren’t really banks, and I need to point that out. They’re just aggregators, but I don’t view them as competition. I view them as collaborators, and there’s some really good code coming out of the neobanks, or challenger banks as they’re called in the U.S., but there’s good stuff coming out of there and those people, a lot of them, their heart’s in the right place.

And we’ve all heard of Aspiration, and there’s a new one, Atmos, that’s popping up in the Bay Area in San Francisco. They’re committed strictly to the climate crisis. Pretty much, you gotta stop banking with the big banks. They may be talking the talk, but they ain’t walking the walk.

LaRoe