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A sustainable alternative to the financial meltdown

Although the global financial problems are causing trouble for investors now, they could lead to something better – for investors and the environment.

"To create a sustainable economy, we have to create social banks, social businesses," says Peter Blom, founder and president of Triodos Bank in the Netherlands, one of the first banks established to finance socially responsible businesses. "And then people can make a conscious decision to deal with money in a different way."

Of course, marrying social goals with for-profit models is tricky. A long-term view and a strong social mission don’t insulate a business or its investors from failure. Now, though, the difference is: Big money is interested in for-profit social enterprise, from venture capitalists investing in microfinance to multinationals buying organic dairies, and with that comes the possibility to reform whole economies, this time without another high-stakes bubble.

"Government and the non-profit sector are limited to addressing social and environmental challenges at scale," says Jay Coen Gilbert, a co-founder of B Lab, a non-profit developing standards for social entrepreneurs. "If you don’t figure out how businesses and financial institutions can create social value, then you’re just spitting in the wind."

Griswold had every right to be frustrated when his bank balked. His business was a success on many fronts, they were training more farmers every year; his employees got raises and liked their jobs; the company was preparing to open offices in Tanzania and Peru. And by traditional measures, too, the business was thriving: Demand was so strong that he needed more financing, not less. And the company was profitable, just not profitable enough for traditional banks.

Owners of socially responsible businesses are emphatic on this point: Making money is important. Companies need to be able to stay in business, pay their employees competitive wages, and grow, which can’t happen without a profitable business model. 'Just because I have greater interests than the bottom line, that doesn’t mean I’m willing to sacrifice the bottom line,' says Tim O’Shea, who runs CleanFish, a fish wholesaler in San Francisco. "We want to sell as much fish as possible."

As a business makes money and grows, the non-financial benefits compound. That means more organic coffee farming, more sustainable fishing, better labor practices, higher wages.

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