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Research Approach of Sustainable Banking @ Stanford

Defining Sustainable Banking

We define Sustainable Banking to include the related fields of financial market making and insurance.

Sustainable” has three meanings simultaneously in our redesign thinking:

  1. Sustainability of the Bank Itself - Is the bank safe for itself and its customers?
  2. Sustainability of the Bank's Customers - Will customers dealing with the bank be safe and better off for doing so?  Can the customers' banking mean more and cost less?  Are banks still needed?
  3. Sustainability of the Bank's and Its Customers' Impacts - In a resource-constrained world, how are the impacts of the banks' transaction flows seen, priced, exchanged and rewarded?

Sustainable Banking and the tools and culture needed to create it rest on four research pillars.

Our research approach and research questions can be summarized in this matrix:

Pillar

Question

Specific Research Areas

New Tools

Impacts Transparency

Am I using my money/other people’s money to aim towards my ethical goals?

Impacts of Choices
Quantifying Choices amidst uncertainty of information
Corporate Transparency
Mapping Money to see impacts

Transparency Mirror

Driving Attention

When I pay attention to or act on my ethical goals, am I validated for doing so?

Compassion/Altruism Relevance of Money
External Validation – rewards points
Intrinsic/Internal Validation – how I see I feel better

Attention Rewards

What Matters Where

Are my ethical goals important in solving quality of life challenges for a place or a peoples that I care about?

Quality of Life metrics using lifecycle assessment methods
Tradeoff metrics regionally/locally
Investigating the role of complexity in reaching target sustainability outcomes.

What Matters Here Map

Safer Banking

When I live my values financially, do I make myself and my bank safer/less likely to fail?

Regulatory Safety of Banks singly & as a system – Basel/CAMELS/Tier 1 Capital
Bankruptcy risk of people/business/government
Probability of Increasing Supply of Capital for Sustainable Finance of Quality of Life-ensuring investments

Sanity Banking & Everyone a Co-Banker


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