|
January 09, 2002
Book Review: Sustainable Finance and Banking
by William Baue
New book methodically argues that finance and banking have a significant role to play in achieving
sustainability.
SocialFunds.com --
Sustainable Finance and Banking: The Financial Sector and the Future of the Planet, by
Marcel Jeucken, works almost as three different books bound in one cover. Divided into Parts I,
II, and III, the sections build upon one another to provide a convincing argument for involving
financial institutions in plans for sustainable development.
 Part I functions as a textbook, outlining basic economic
and environmental principles. Part II reads more like a dissertation, analyzing how economics and
environmentalism intersect in the practice of sustainable finance. And Part III sounds like a
manifesto, advancing a convincing argument for preventing environmental apocalypse through
sustainable business practices. This last section makes the book required reading for anyone
concerned about sustainability, and is applicable to mainstream and professional audiences alike.
"Although the process of writing this book started as a translation of a Dutch book called
Duurzaam Bankieren (Sustainable Banking, Jeucken, 1998), the process of rewriting
turned out to be so inspiring that in fact more of a new book has evolved," states Mr. Jeucken.
Mr. Jeucken is a senior economist at the Rabobank Group in The Netherlands and a doctoral
candidate in sustainability and banking at Erasmus University. While updating the material, he
excised sections that focused narrowly on the Netherlands and expanded the book's scope to
encompass a global perspective.
"[C]are for the environment and the concomitant need to
build a sustainable society is not a fad but an irreversible necessity," writes Mr. Jeucken. After
establishing the extent of the environmental crisis and the development of sustainable business as
a response, Mr. Jeucken spends the remainder of Part I explaining how banks mediate between
business and the environment. "The role of banks in achieving sustainable development is
significant considering the intermediary role that they play in society," he states.
The
book proposes a developmental model of banking that echoes Jean Piaget's developmental psychology
at times. Mr. Jeucken posits four stages, or "phases" as he calls them, in a kind of banking
maturation process: defensive banking, preventive banking, offensive banking, and, finally,
sustainable banking. However, Mr. Jeucken emphasizes that these phases may not apply to all
situations. Most importantly, he does not want to posit a static concept, but rather a dynamic
one. "Our understanding of sustainability will undergo continual enhancement," he writes.
Later, in Chapter 9 of Part III, he supports this developmental paradigm by analyzing the
degree of sustainability practiced at 34 international banks. He reports a tentative correlation
that banks in the sustainable phase tend to be more efficient, more global, and larger in terms of
assets. Defensive banks exhibit selfish, child-like characteristics while sustainable banks
exhibit more wisdom and foresight, according to this model.
Part II may prove the most
valuable to the financial and sustainability communities, but its technical depth may intimidate
more casual readers. Mr. Jeucken breaks up the material by including graphs, tables, and case
studies. For example, he quotes the Environmental Policy Statements from ten banks, allowing
readers to compare the relative opacity or transparency of their language. These charts and
examples illustrate his points effectively, helping lay readers to understand the more arcane
aspects of his argument.
The heavy language of Part II continues into the first chapter of
Part III, which is a case study of 34 international banks. However, Chapters 10 and 11 practically
soar off the page, as Mr. Jeucken reveals the philosophical and spiritual perspectives buried
beneath the technical jargon. He establishes Kuhn's famous notion of paradigm shifts, then
encapsulates the entire historical development of Western philosophic and economic thought.
Alongside his precise descriptions, vivid examples abound.
Mr. Jeucken includes a line
graph charting population growth, affluence, and use of natural resources. The line is almost flat
throughout human history until the Twentieth Century, when it begins to rise almost vertically. He
then shows graphically how different courses of action into the future are unsustainable or
sustainable.
Most persuasively, Mr. Jeucken retells a parable for the world environmental
dilemma: if the amount of water lilies in a pond doubles daily, filling the pond in 30 days, when
will the pond be half full? Mr. Jeucken does not focus on day 29 as the correct response, but
rather focuses on finding solutions to prevent day 30 from arriving. In this way, he transforms
what could be an alarmist text into an optimistic one.
Sustainable Finance and
Banking: The Financial Sector and the Future of the Planet, by Marcel Jeucken. Earthscan
Publications, Ltd, 2001.
Buy this book at Amazon.com
©
SRI World Group, Inc. All Rights Reserved.
Top
| 
