Environment, people and community at First Green Bank

Putting environmental and socially responsible causes ahead of profit or shareholder value is gaining currency in the business world but still probably would not be considered “in the mainstream.” That’s okay with Ken LaRoe, because neither he nor his business, First Green Bank, could ever be called typical.

LaRoe is the founder and CEO of a bank that is, at once, both first and last. Based in Mount Dora with branches in Clermont, Orlando, Ormond Beach and Winter Park, First Green is the last bank in Florida to have filed for and received a charter. However, LaRoe also believes it’s the first to adhere to a comprehensive, values-based business model that puts environment, people and community ahead of all else, including shareholders.

As a result of all these efforts, LaRoe was recently honored by Ernst & Young (EY) as the 2015 Entrepreneur of the Year for Florida in the Financial Services category.

“Doing business on a values-based proposition is considered by many to be anathema to banking,” he said. He notes that a bank’s scope of community responsibilities is often limited to local civic organizations. “But I believe in true, hands-on involvement and am convinced that banking can be a powerful force for change.”

A lifelong environmentalist, LaRoe could have retired after the sale of a previous bank in 2006. But after reading the book, Let My People Go Surfing by Yvon Chouinard, the founder of Patagonia Inc., he was inspired to put his expertise―and his principles―back to work.

He met with both to learn how a bank could also be an agent for the environment and socially responsible. “I saw first-hand what they were accomplishing and that’s what started my journey to create the first values-based bank on the East Coast.”

With its gung-ho business climate and development landscape, Central Florida is ripe for capitalism, and perhaps an unlikely place to start a values-based business of any kind, let alone a bank. “Kat Taylor, the co-founder and co-CEO of Beneficial State Bank in California, joked that I was like a missionary in a jungle,” said LaRoe. “But I believe that you shouldn’t run and hide. Instead, try to create change right where you live.”

This approach is not without challenges. Adherence to values can put limitations on how and with whom you’re able to conduct business. “In order to be true to a socially responsible position, you cannot be financing an enterprise that doesn’t share the same values,” he said. He admits this stance has led to several difficult board room discussions.

First Green is also faced with the same obstacles that any small bank must face in today’s regulatory environment.

“For one thing, the de novo period (when new banks are subject to tight restrictions and increased scrutiny) has been lengthened from three to seven years, which makes it difficult to develop a sensible business plan,” LaRoe said. Also, competition from the big banks, which now control 80 percent of the nation’s total capital, is fierce.

Still, he and First Green Bank have persevered and forged a new path since opening in February 2009. The bank offers lower interest rates for commercial projects that meet green building certification defined by the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards. “We appeal to values-aligned businesses who value ecology and integrity over short-term goals.”

To be economically viable for the bank, the number of businesses that share these values must grow. LaRoe talked about how to really make this work, they must influence and educate.

To start with, First Green Bank leads by example. Its headquarters is LEED-platinum-certified, only the second such privately owned building in the state. The Winter Park branch is housed in an existing building converted to LEED-EB gold certification and is now net-zero for electricity and actually produces more than it uses.

Meanwhile, the Ormond Beach branch is being retrofitted to Green Globe standards. “And by beta-testing Green Globe, we’ll be better able to educate a builder, developer or owner on how much additional time and money is needed per square foot to conform,” LaRoe said.

First Green is also planning a new, living-building facility in Clermont that could become the first of its kind. “Much like the Bullitt Center in Seattle, it’s regenerative,” he said. The building would handle all waste on site, use no more water than it collects in runoff and generate more energy than it uses.

The bank values its people as much as the environment. In 2014, LaRoe implemented a living wage standard. Employees are now guaranteed a minimum $30,000 annual salary. He was stunned by the amount of attention this single change received, especially from the media.

“It’s amazing how something so simple captivated everyone. The timing was totally unintentional.”

First Green also encourages staff purchases of energy-efficient vehicles by offering zero- interest loans and by leasing advertising space on those cars to defray the cost of ownership.

Electric car recharging stations will soon be at every branch. “The four at our main office are frequently in use and, since they’re solar powered, are free of charge to anyone on our staff or in the community,” said LaRoe.

On a global scale, First Green Bank has partnered with local nonprofit, Clean the World, to bring awareness to the health issues facing communities around the world.

What does the future hold for values-based enterprises? “I think they’ll continue to grow because millennials expect it. Many will only choose to patronize a business that’s value-aligned,” he said.