As a triple bottom
line company, ShoreBank
measures its success
by the amount it invests
to create economic
equity and a healthy
environment, as well
as by its financial
performance.
Some investments primarily
further our community
development goals;
others primarily address
conservation; and others
are profitable loans
with minimal mission
impact. Believing that
long-term community
prosperity is linked
to environmental well-being,
our long-term goal
is to increase significantly
the proportion of loans
that meet all three
"bottom lines.
CREATING
ECONOMIC EQUITY AND
A HEALTHY ENVIRONMENT
Because ShoreBank believes
that community prosperity
- and residents' prosperity
- is linked to environmental
health, our financial
and information services
are designed to revitalize
communities and promote
wealth creation in
ways that also protect
the environment.
In places like the
Pacific Northwest or
Michigan's Upper Peninsula,
the link between economic
well-being and environmental
health is clear. Communities
whose economies are
based on logging, fishing,
or mining decline when
the trees, fish and
minerals are depleted.
In communities such
as these - and in all
our locations - ShoreBank
fosters economic growth
by assisting businesses
that diversify the
local economy, provide
local jobs, and use
natural resources in
sustainable ways.
In urban locations,
the links between economic
equity and a healthy
environment are equally
strong but look very
different. Rehabbing
residential real estate
is one of ShoreBank's
key strategies for
achieving our community
development and environmental
mission. Renovated
properties change residents'
perceptions of their
communities, which
can lead them to demand
improved city services.
The value of the rehabbed
property increases,
as do the values of
adjoining properties,
increasing owners'
net worth. Newly renovated
buildings are free
of lead-based paint
and asbestos and have
more energy efficient
features, resulting
in cost savings.
But urban neighborhoods
are often host to abandoned
gas stations and manufacturing
sites that remain vacant
because of the prohibitive
cost of removing the
lingering chemical
waste. Not only do
these "brownfield"
sites fail to contribute
to the tax base, but
they pose health risks,
depress the value of
surrounding real estate
(reducing owners' net
worth) and add to the
perception of neighborhood
decline. ShoreBank
addresses these issues
by financing the decontamination
and redevelopment of
"brownfields"
into vibrant commercial
and residential areas.
Lending to faith-based
and other nonprofit
organizations also
strengthens communities
by supporting their
efforts to open community
and child-care centers,
create jobs and renovate
their own properties.
By financing physical
improvements that increase
energy efficiency,
ShoreBank helps organizations
reduce their utility
costs, creating savings
that can be reallocated
to their programs.
Home ownership is one
of the most effective
ways to build personal
wealth and to revitalize
communities. Therefore,
ShoreBank provides
financial fluency,
homeownership and home
conservation information
to residents, often
through partnerships
with faith-based organizations.
We provide home mortgages
at affordable rates,
and intentionally reach
out to borrowers who
may not have the best
credit.
By providing financial
and information services
to small businesses,
real estate owners,
faith-based institutions
and individuals, ShoreBank
provides the tools
to create economic
equity and a healthy
environment.
FINANCIAL INVESTMENTS
THAT PROMOTE ECONOMIC
EQUITY AND A HEALTHY
ENVIRONMENT
In 2002, ShoreBank 's non-profits, banks and other for-profit companies invested $207 million in priority communities, the second highest level of community development investment we ever achieved in a year. This amount is 2.40 times consolidated average capital, which significantly exceeds our internal standard of investing two times capital in priority communities each year.
Conservation lending increased to $56 million, a 33 percent increase over 2001. It should continue to increase dramatically as we further integrate conservation into all of our products and services.
The following charts
and tables show mission
investments over the
last five years. Residential
real estate lending
dominates our investments,
but faith-based and
small business lending
continue to be strong.
Conservation loans
are often located in
priority communities,
in which case we count
them in two categories
- as conservation loans,
and in the business
line they represent.
Therefore, the rows
in the charts below
are accurate, but do
not add up to the total.
The total is the amount
of mission-based investments
with no double-counting.
MISSION-ORIENTED
INFORMATION SERVICES
ShoreBank provides
information services
primarily through consulting
relationships and training
classes. ShoreBank
Advisory Services -
our consulting company
- is not alone in providing
consulting services;
the Pacific bank and
almost all the nonprofit
affiliates also provide
consulting services
to their customers.
ShoreBank Advisory
Services applies what
we are learning in
our domestic markets
to other communities
in the United States
and across the world;
likewise, it shares
what it is learning
in other communities
to improve ShoreBank's
effectiveness at home.
In 2002, ShoreBank
Advisory Services worked
in 17 countries and
served 50 clients in
the United States.
In the Pacific Northwest,
program officers and
the bank scientist
help business customers
achieve their financial,
conservation and job
creation goals. In
Cleveland, in addition
to providing business
assistance services
to clients, the nonprofit
affiliate is the lead
sponsor and fiscal
agent for Entrepreneurs
for Sustainability
that brings together
hundreds of entrepreneurs,
academics and civic
leaders interested
in environmental business
activities.
In Michigan's Upper
Peninsula, ShoreBank's
nonprofit affiliate
Northern Initiatives
consults with manufacturers
to streamline their
processes and reduce
waste. Northern Initiatives
is coordinating research
and development for
transforming wood and
fish waste into marketable
products and converting
an abandoned mine into
growing chambers for
bio-pharmaceutical
plants. It also provides
entrepreneurial training
and financing for startup
businesses.
In Chicago and Detroit,
most of the information
services are designed
to help individuals
build their own wealth
and to adopt conservation
principles into their
decision making. Some
participants go on
to establish Individual
Development Accounts,
which are matched savings
accounts they can use
later to purchase assets.
During 2002, ShoreBank
companies other than
ShoreBank Advisory
Services assisted over
200 businesses and
had 55 formal consulting
contracts. In addition,
individuals received
training in financial
fluency, home buying
and business startup
skills. At year-end,
customers had 181 active
Individual Savings
Accounts.
WALKING OUR TALK
Striving for economic
equity and a healthy
environment starts
at home; within ShoreBank,
we are constantly working
to improve our own
performance.
Our human resources
policies and practices
are consistent with
our mission: benefits
plans reduce the disparities
between higher and
lower paid employees;
training and educational
opportunities for employees
are plentiful; our
policy is to promote
from within; and everyone's
performance plans include
conservation and community
development goals.
ShoreBank promotes
educational opportunities
for community residents
through college scholarship
programs (16 scholarships
in 2002), partnerships
with local elementary
and high schools, and
by organizing programs
for employees to tutor
or mentor students.
We are also striving
to improve our own
conservation performance:
- Paper reduction initiatives have resulted in a significant reduction in consumption - 26 percent less in 2002 than in 2001, on top of the 18 percent reduction between 2000 and 2001.
- Paper and aluminum can recycling is the standard in all locations.
- Energy efficiency improvements are being made in properties we own.
- Affiliates are adopting "green" purchasing programs, including the largest affiliate, the Chicago/Detroit bank.
ShoreBank does not
create economic equity
or healthy environments
by itself - it invests
in employees and customers
who in turn undertake
individual projects
which - when added
together - create lasting
change in the world.