Days before Climate First Bank opened, Ken LaRoe already had $75 million worth of loans in the pipeline. That’s a good start, one that led him to believe people are buying into what the company is selling.
But he also couldn’t help feeling a little nervous.
“We’ve got a lot of customers wanting to get involved that are sitting there saying, “Okay, I’m opening my account the first day you’re open,’” he said. “We’re saying, ‘Uh, give us a week, please, so we can make sure everything works.’”
The early enthusiasm has a lot to do with Climate First’s mission. As the name suggests, the St. Petersburg bank aims to put climate change and sustainability first — not just in its own business practices, but through the investments it makes and the clients it chooses.
“In short, we won’t back evil,” said LaRoe, the company’s founder and CEO.
Climate First Bank has used its message of eco-friendliness to raise $37 million in capital. That’s well above LaRoe’s initial goal of $25 million; he expected the tally could near $42 million by the time the bank’s doors opened Tuesday at 5301 Central Ave.
Some of that has come from shareholders from LaRoe’s old banks; some has come from bank investors in general. About $1 million came from LaRoe himself.
But some has also come from what are known as ESG (environmental, social and governance) funds, which back companies that adhere to select social values and missions. And some came from people who heard about Climate First online or through the press, and invested because “they want to make a difference in the climate crisis,” LaRoe said.
How Climate First Bank will do that will involve some trial and error, LaRoe said. The company can offset its own environmental footprint by using solar power and purchasing carbon credits. It can require its software vendors to hit certain sustainability benchmarks. It can offer better loan terms or interest rates to persuade developers to incorporate LEED-friendly elements.
As clients start coming through the door, Climate First will have harder choices, LaRoe said. Will the bank do business with the small business owner who operates several franchises of a global corporation like McDonald’s? Will it loan to a manufacturer whose chemical disposal methods they can’t efficiently track?
“It all goes back to that customer coming in and saying, ‘Wait a minute, I thought I knew where my money was sleeping at night, and now I find out that you bank Joe Bob’s Auto Repair, and I saw him dumping dirty oil down the storm drain the other day,’” he said. “You can see the conundrum for us.”
With all the required regulatory reporting behind them, and a queue of customers ready to open accounts, LaRoe believes Climate First is in a good starting position. He intends one day to take Climate First Bank public — “I want to build the bank to last and be the acquirer, not the acquired,” he said — but its success will largely be tied to how closely it manages to stick to its founding principles.
“The stuff we can do right up front, we’re going to do,” he said. “The last thing we want to have happen is somebody say we’re greenwashing. I eat, sleep and breathe this stuff. This is my reason for being.”