“Making Good Money”, the Daily Challenging Business of #VANCITY

Extract of the interview with Ms. Andrea Harris, Manager Community Investment at VANCITY, Vancouver, met by the Project’s Team on March 11th, 2013

The beginning…

When Vancity was created in 1946, the founders chose to incorporate as a credit union in order to enshrine the organization’s commitment to community. “Vancity is a credit union, which is a member-owned financial co-operative. As a financial co-operative, we exist for the sole benefit of our members and their communities. We believe that we can only prosper as individuals if we are connected to a healthy, sustainable community. That’s why we help members meet their financial goals in a way that also strengthens their community” she explained to us. The Board is elected by the people who use the financial services (i.e. members) of the Credit Union. Around 70% of the activity deals with lending for individuals, the other 30% with lending for companies. This mandate is very different from banks who are publically traded companies and driven to maximize their profits and returns to shareholders, who may or may not use the services of the bank itself.

Some quick facts about co-operatives in Canada:

  • Vancity is one of 9,000 co-ops in Canada
  • Canadian co-ops provide products and services to 18 million members
  • 4 out of 10 Canadians are members of a co-op
  • Co-ops exist in virtually every sector of the economy, from agriculture, retail and financial services to housing, child care and renewable energy.

Since it’s inception, Vancity innovated in many areas. Among other initiatives, Vancity was the first to lend money to people wanting to buy homes in Vancouver’s east side, and the first to provide mortgages to women without a male co-signer, to women.

While the traditional banking model focuses on increasing short-term profits for the benefit of shareholders, our vision focuses on meeting the long-term needs of our members and their communities

In 1998, Vancity implemented an Ethical Policy designed to clarify which kinds of activities Vancity would not lend to for ethical reasons, a kind of “red line” to not cross. This is to ensure that their business activity is in line with their values and objectives. By 2005, a specialized team of 17 people on implementing a CSR strategy for the organization which included:

  • Publishing an accountability report outlining social and environmental performance;
  • Granting to local community projects for within specific areas (climate change, eco-innovation, etc). Implementation of a climate change strategy for the company, including a commitment to become the first North American based financial institution to become Carbon Neutral.
During our Meeting at Vancity Headquarters, Vancouver

During our Meeting at Vancity Headquarters, Vancouver

The change of vision and approach…

Early in 2009, Vancity adopted a new vision that embodied a new approach of CSR. They integrated CSR into the company’s core business activity and goals. “Our values shape everything we do at Vancity: how we use our resources, how we plan for the future, how we treat our members and how we hire employees”. Before 2009, they relied largely on the company’s profit to invest in social and environmental change. For the past four years, they have been working to integrate sustainability into how they conduct their core business activity, tapping into the larger potential of using their total asset base of $16 Billion to drive to positive change in community. Since then, they have focused more of their lending to invest in companies and projects that have the potential to create both positive financial returns as well as positive impacts on the environment and for the community. They want to support these “good” companies from sectors that are vital to create a sustainable development because :

  • they are in line to create a more socially just and environmentally sustainable future ;
  • they may face barriers in accessing the financing they need to grow;
  • Vancity is a community-based credit union and believes that their members (customers) appreciate that it is pro-actively investing in sustainable and ethical activities as well as businesses that benefit directly to the community.

For example, Vancity is supporting and lending money to non-profit initiatives, to local companies dealing with renewable energies, organic farming, eco-friendly transportation, etc. That is the meaning of “make good money by putting money to good”, used in the marketing to promote their approach.

Vancity believes in virtuous circle in taking care of the community. For example, it organizes workshops and training sessions for seniors, high school students and single parents to know how a VISA card is functioning and to help prevent them from taking on too much debt. Even if most of the banks would refuse that because customers’ debt is more profit for them, Vancity believes in the long-term positive effects.

Sustainable banking, viable alternative to the current financial system

Vancity is a member of the Global Alliance for Banking on Values (GABV), an independent network of banks using finance to deliver sustainable development for people, communities and the environment. “It is very important for us to work in a network and share the good practices” she added. This is a different approach of the market from the common banks: “This way of doing business differentiates us from traditional financial institutions. By redefining wealth, we are measuring our success in terms of the health and vitality of the community as a whole.” Also, « while the traditional banking model focuses on increasing short-term profits for the benefit of shareholders, our vision focuses on meeting the long-term needs of our members and their communities ». Financial literacy and community engagement is part of that long-term commitment. As part of their activity, they engage in projects align with their values and vision in order to preserve the natural and cultural heritage of the communities where they work.


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