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Sustainable agricultural enterprises are just like other business ventures. Whether it’s opening an organic creamery or setting up a grass-based beef operation business and agricultural entrepreneurs have at least one thing in common: the need for capital. That’s where companies like the ShoreBank Corporation come in.

In a seminar sponsored by the Leopold Center’s Marketing and Food Systems Initiative, the presidents of two ShoreBank-affiliated lending institutions explained how their companies work and what each has done in their area. John Berdes, president of ShoreBank Pacific, and Dennis West, president of Northern Initiatives, spoke to a group of approximately 50 people on June 1 in Ames.

ShoreBank
Established in 1994, ShoreBank was the nation’s first commercial bank formed to support environmentally sustainable development. ShoreBank Pacific, based in Ilwaco, Washington, started as a joint non-profit project of the ShoreBank Corporation of Chicago and the environmental nonprofit organization, Ecotrust of Portland. Since that time, ShoreBank Pacific has invested more than $30 million in economic opportunities and environmental restoration and preservation in the Pacific Northwest.

Berdes elaborated on his institution’s mission and dedication to the “triple bottom-line.”

“Most businesses have a single bottom-line – maximizing shareholder return,” Berdes said. “‘Triple bottom-line’ companies typically manage to achieve three returns: profitability, social return and an environmental return.”

ShoreBank measures its bottom line by looking at three things: traditional financial performance, the dollars they invest in “priority communities” (communities whose median income and housing values are below the state or regional standards), and the dollars they loan to finance activities that contribute to a healthier environment, such as building renovations that reduce energy consumption.

One of the enterprises supported by ShoreBank Pacific through loans is an organic dairy/cranberry farm in southwest Washington. The farm is preserving farming traditions and lands and developing new products and markets. The farm emphasizes a “value proposition” for family farms.

ShoreBank has made loans to a shellfish farm that raises oysters. The Nisbet Oyster Farm in the Willapa Bay of southwest Washington employs numerous immigrants and pushes for high local water quality standards. The local water quality has a direct impact on the Nisbet bottom line; if water quality drops, oysters may become unfit for consumption.

Nisbet also promoted an effort to replace nearby septic systems, which were outdated, and Shorebank helped with funding. By replacing the septic systems, Shorebank was able to meet their “triple bottom-line” by helping to protect water quality. Local properties increased in value because of updated septic systems, oyster farms were able to increase profits due to a cleaner water source, and the environment was improved by removal of leaky septic systems.

Berdes described Shorebank’s partnerships with its clients as “a portfolio of relationships, not a portfolio of loans,” that serve as a guideline of how lending institutions should treat their customers.

Berdes summarized the key ingredients needed for rural entrepreneurs to succeed:

Northern Initiatives
Northern Initiatives is a ShoreBank partner located in Marquette, Michigan. It originated in 1985 as an academic department of Northern Michigan University. Dennis West, president since 1997, elaborated on the history.

“Northern Initiatives was established to find innovative ways to enhance the regional economy, simply as an academic department of NMU,” he said. “Then in 1992, the university entered into a partnership with ShoreBank.”

Northern Initiatives has been active in the northern peninsula of Michigan since 1994. It has loaned nearly $17 million to area businesses.

West points out that urban areas have several advantages over rural communities.

“Rural communities lack access to three things that can be found in an urban center,” he said. “Capital, information and larger markets. Northern Initiatives was therefore designed to fill capital gaps, improve access to world-class ideas and support small businesses to gain access to urban centers.”

“We are pushing our board to support both energy and environmental conservation,” West said. “The initiative will push us beyond economy and equity to the third ‘e,’ environment. We have a responsibility to lead in the protection of one of Earth’s most valued and precious resources.”