Post on 11-Feb-2022
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 25
© 2006 ShoreBank Enterprise Cascadia. Reprinted with permission. All rights reserved.Published online in Wiley InterScience (www.interscience.wiley.com).DOI: 10.1002/tqem.20129
A Vision for theFuture
ShoreBank En-
terprise Cascadia
(SBEC), a certified
nonprofit commu-
nity development fi-
nancial institution
(CDFI) headquartered in Ilwaco, Washington,
was created in 1995 by ShoreBank Corporation
and Ecotrust; it originally operated under the
name ShoreBank Enterprise Pacific. See Exhibit1 for a photo of SBEC’s headquarters.
ShoreBank Corporation, based in Chicago, is
America’s first and leading community develop-
ment and environmental banking corporation. It
was established in 1973 and has banks and affili-
ate nonprofits in Chicago, Detroit, Cleveland,
northern Michigan, and the Pacific Northwest.
ShoreBank Corporation also works internation-
ally in Africa, Asia, eastern Europe, and Central
America, supporting community development
and microenterprise strategies in developing na-
tions.
Ecotrust, located in Portland, Oregon, was
formed in 1991 to focus on conservation efforts
in the coastal temperate rainforest of America’s
West Coast. Ecotrust specializes in community-
based strategies that support environmental and
economic integrity.
One of its most
critical initiatives,
“Salmon Nation,” is
an effort to revital-
ize salmon runs in
the Pacific North-
west, Canada, and
Alaska.
These two prominent organizations found a
common vision for the future that embraced
both the well-being of the natural environment
and the people who call the West Coast’s abun-
dant coastal landscape home.
ShoreBank Enterprise CascadiaFrom its inception, ShoreBank Enterprise Cas-
cadia’s mission has been to assist natural re-
source–dependent communities by integrating
economic, social, and environmental goals. SBEC
has done this by supporting the emergence of new
business, civic, and conservation strategies that
deliver both community prosperity and healthy
ecosystems. Thus, SBEC has had at its core the in-
tegration of environmental goals into the tradi-
tional social equity lending practices of CDFIs.
Cate Gable
Measure What Matters:ShoreBank EnterpriseCascadia’s Commitment toTriple-Bottom-Line Metrics
“Connecting the dots” with
specific quantitative measures
Cate Gable26 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
SBEC’s activities and services include techni-
cal assistance for organizations (strategic plan-
ning, operational audits, and capacity building),
along with capital investment and community
lending products (loans for real estate develop-
ment, child care facilities, small businesses, septic
system improvements, a vehicle guarantee pro-
gram for a local Hispanic community, and a fed-
eral New Market Tax Credits program, among
others). These services and products are provided
in close coordination with community leaders,
innovative entrepreneurs, local municipalities,
other nongovernmental organizations, and ser-
vice organizations.
In January 2007, the former ShoreBank Enter-
prise Pacific merged with Cascadia Revolving
Fund, a CDFI based in Seattle, thereby doubling
its territory and asset base. This merger allows the
newly renamed ShoreBank Enterprise Cascadia to
leverage the resources and opportunities of rural
and urban communities to synergistically address
the needs of both environments.
Why Environmental Issues Are Critical toSBEC’s Work
As stated in the World Resources 2005 Report:
The Wealth of the Poor, “The link between the en-
vironment and poverty reduction is strong. Since
the Rio Earth Summit in 1992, the importance of
a sound environment to sustainable livelihoods
has been widely acknowledged, particularly for
the rural poor. . . . “1
This report goes on to quantify the vital role
of natural resources for rural populations in the
developing world, particularly in Africa, Asia, and
Latin America. The same argument can be made
for regions of rural America where poverty per-
sists, as well as for the un- or underemployed and
underserved populations struggling in our inner
cities.
Many practitioners in the CDFI industry be-
lieve that chronic poverty—economic insecu-
rity—is directly tied to ecological degradation.
Those who work within distressed communities
understand that poverty trumps the environ-
ment: People struggling for solvency make deci-
sions that solve the crisis at hand. Thus, environ-
mental quality and economic vitality must be
built upon a baseline condition of economic se-
curity.
An honest long-term commitment to the
triple bottom line demands an institutional com-
mitment to delivering economic opportunity
that follows directly from environmental well-
being. CDFIs, which were formed in response to
the crisis of limited investment engines for dis-
tressed communities, have a natural role to play
in addressing structural environmental issues
that threaten economic security.
The Concerns of SBEC Constituencies Some of the most pressing environmental is-
sues for SBEC constituencies, underserved by tra-
ditional financial services providers, are the fol-
lowing:
• changes in patterns of rural land ownership;
• habitat impacts and loss of open space;
• ownership and use of natural resources, and
the related impacts on traditional, place-
based industries;
Exhibit 1. ShoreBank Enterprise CascadiaHeadquarters in Ilwaco, Washington
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 27ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
As fisheries decline, markets and product de-
livery systems break down, and the livelihood for
fishermen becomes less viable. On both coasts,
many working waterfronts and harbors have
been lost due to either economic degradation or
condominium development and the building of
second homes.
The Effects of Global WarmingGlobal warming also affects water systems by
changing precipitation patterns. Either less rain
falls or rain falls in deluges that result in toxic
runoff when soils become oversaturated.
Rainwater that falls on pavement, rather than
filtering through soil, must be processed in waste-
water treatment plants and cannot replenish
below-surface aquifers. Many of our nation’s
aquifers are already stressed because of water re-
moval that is not matched by this “refresh” cycle.
These pressures on ecosystems adversely affect
water quality and watershed health.
Urban Environments and Brownfields Urban environments are feeling similar envi-
ronmental pressures, and are seeking solutions.
Reusing materials, which has long been a practice
of the conservation movement, is now playing a
role in the revitalization of inner cities.
• natural resource extraction industries and
their effects on natural systems;
• impacts of globalization in terms of labor,
benefits, price competition, and employment;
• issues involving efficient use of resources, par-
ticularly in the energy sector;
• cost of energy, or what some call the “house-
hold energy burden”;
• water quality and watershed health; and
• global warming issues and related macrosys-
tem failures.
Natural Resource Extraction IssuesIn places where natural resources are care-
lessly extracted—whether from land, water, or
underground—people’s livelihoods (and, there-
fore, the economic networks that support com-
munities) are compromised.
In the Pacific Northwest, stands of timber
are degrading—if not by unsatisfactory forest
management, then by the stresses of climate
change. Aspens are mysteriously dying. Pon-
derosa across the West are plagued by pine bee-
tle infestations.
As healthy forests and forest lands shrink, the
livelihoods networked to timber harvesting, man-
ufacturing, and product sales decline. Whole
communities and livelihoods are endangered. See
Exhibit 2.Many fisheries are in decline, and the man-
agement of these fisheries is uncertain because of
the fishing industry’s volatility.2 On the West
Coast, Pacific salmon (which hatch in freshwater
streams, feed for several years in the deep ocean,
and then return to their places of birth to spawn
and die) are in danger from habitat degradation
and dams that block their return to spawning
grounds upriver.
Fisheries are further endangered by global
warming trends. Warmer winters and less snow-
pack mean less water in the summer months
when spawning salmon need it most.
Exhibit 2. Timber Harvest
Cate Gable28 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
Abandoned buildings can harbor unsavory ac-
tivities and, at the least, create urban “dead
zones” within communities. The renovation or
refurbishment of a building uses less material
than new construction and often saves a historic
monument from demolition. “Green building”
practices have many environmental and eco-
nomic benefits.
Another problem that can affect both rural
and urban communities is the presence of toxic
materials left over from postwar industrial ac-
tivities that were carried out before today’s en-
vironmental laws were put in place. These toxic
materials can create “brownfields,” often in
proximity to poorer communities. Such toxics
adversely affect both air and water quality and
can make the costs of rejuvenating a site pro-
hibitive.
Info-Tech ToxicsIt is well known that the high-tech revolution
in Silicon Valley and other sites on the West
Coast radically transformed late-twentieth-cen-
tury civilization. Less well known is the damage
that high-tech development can inflict on
human health and the environment.
Electronic computer equipment is a compli-
cated assembly of more than 1,000 materials,
many of them toxic. Toxic materials in computer
components include the following:
• lead and cadmium in computer circuit boards;
• lead oxide and barium in computer monitors’
cathode ray tubes;
• mercury in switches and flat screens; and
• brominated flame retardants on printed cir-
cuit boards, cables, and plastic casings.3
Information technology’s semiskilled produc-
tion jobs often involve hazardous chemical han-
dling and exposures. A majority of workers in
these jobs are people of color, mostly women.
Often, lower-income people of color work in
the most hazardous jobs and live in the most pol-
luted neighborhoods. In Silicon Valley, for in-
stance, Latinos and Asian/Pacific Islanders live
and work in the neighborhoods nearest to sites of
toxic leaks and spills from industry, resulting in a
“double exposure” to chemicals.
Responsibility for disposing of computer
“orphans”—older computers whose original
manufacturers no longer exist—often falls on
municipalities, which frequently manage their
own waste sites. The cost of handling these
toxic materials, in both dollars and health and
environmental degradation, is high. See Ex-hibit 3.
Suburban SprawlSprawl is another urban problem that cre-
ates adverse environmental effects. Sprawl gen-
erates both air and water pollution and
squeezes natural resource- and habitat-depend-
ent enterprises into smaller geographical spaces.
With real estate prices in inner cities escalating
and the costs of home ownership skyrocketing,
poor families must live further from city centers
and travel back to work, increasing their overall
cost of living.
Exhibit 3. Electronic Waste
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 29ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
estate, community facilities, affordable housing,
and related community development activities
with three criteria in mind:
• the economic feasibility or financial merits of
the project;
• the equity contribution the project will make
to individuals and families in the form of
good wages, local ownership of resources
(businesses or property), and asset-creating
opportunities; and
• the environmental benefits and effects result-
ing from the project’s operations, products,
services, supply chain, and related policies
and practices.
The nexus of these
three criteria is what
institutions in our in-
dustry refer to as a
“triple-bottom-line”
(TBL) investment op-
portunity.
For several decades, these three linked invest-
ment criteria have been gaining attention in
global, socially responsible, and corporate invest-
ment circles. In 1987, the United Nations’
Brundtland Commission opened the eyes of
many regarding the impact of global economic
development policies and practices that had little
regard for people’s welfare or stewardship of the
environment.4
Environmental problems combine to chal-
lenge private and public leaders on the impera-
tive for sustainable development policies and
practices. It is clear to lending practitioners that
poverty and the deterioration of the environment
are intrinsically linked.
CDFIs in both rural regions and urban neigh-
borhoods in the United States—and their coun-
terparts throughout the world—are already ex-
perimenting with triple-bottom-line investment
Suburban land development generally in-
volves installation of more pavement. Paving pre-
vents water from filtering down through soils to
replenish deep aquifers, leading to urban water
shortages and water quality crises. Bulldozed wet-
lands cannot provide the ecological services of
storm mitigation and flood control.
Sprawl can also affect the surrounding farm-
lands that provide food for growing urban cen-
ters. Reductions in markets for traditionally pro-
duced crops or products, and the growth of
supply-chain “bullies,” can price small farmers
out of doing what they do best. These farmers
must either sell out to suburban developers or be
forced into service as part of industrialized, fac-
tory-style feedlots, where the sewage of chick-
ens, turkeys, and pigs further aggravates pollu-
tion problems.
In many urban areas, inefficient energy
practices can also lead to increased air and
water pollution from industrial coal-burning
plants. These plants often are sited near poorer
neighborhoods.
Sprawl coupled with higher energy costs can
place a larger “total household burden” on poor
families, who must travel long distances to
work or to find basic services—thereby using a
higher percentage of their income to support
energy needs.
The Impact on Poor Communities It is clear that when natural resources are
compromised or environmental practices are un-
sustainable, the lives of individuals in communi-
ties of low wealth suffer the most.
CDFIs and the Triple Bottom LineAs a result of growing awareness about these
ecological concerns, CDFIs are beginning to take
a new approach to their community develop-
ment lending practices. They are investing in di-
verse enterprises involving natural resources, real
Environmental problems combine tochallenge private and publicleaders on the imperative for
sustainable development policiesand practices.
Cate Gable30 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
to strategically address poverty and conservation
as related and interdependent issues.5
How Environmental Sustainability BenefitsSBEC Customers
SBEC’s experience combining environmental
practices with equity support and economic via-
bility makes it clear that environmental sustain-
ability benefits our customers and communities
in many ways:
• Customer Focus: Promoting improvements for
managing energy and
resource use results in
a stronger financial
position and improved
performance for small
business borrowers
and residential clients,
thus decreasing house-
hold and business op-
erating costs over the
long term.
• Community Focus: Communities with sustain-
ably managed natural resources have stronger
reserves of natural assets that can be em-
ployed to meet social and economic commu-
nity development goals.
• Economic Focus: Supporting our communities
and customers in tapping new, higher-risk
markets that focus on sustainable technology
will position them to create the innovative
products of the future.
• Environmental Focus: Reducing materials usage
and improving energy performance while
minimizing the environmental impacts of
buildings (both residential and commercial)
leads to lower operating costs and reduced
household burden, decreased municipal costs,
enhanced health and productivity for em-
ployees and residents, and better air, food,
and water quality.
Environmental and Sustainability MetricsSystems
SBEC believes that what gets measured gets
done: A triple-bottom-line metrics system must
include empirical data collection that measures
outcomes.
Sustainable development means many things
to many people. As a result, the terms “sustain-
ability” and “triple bottom line” often lack real
meaning. Metrics help define and bring discipline
to the field of sustainability.
CSR/SRI Metrics and Reporting A plethora of existing indices attempt to as-
sist businesses in measuring their environmen-
tal impacts. These metrics systems fall into sev-
eral categories.
The two most commonly used approaches are
corporate social responsibility (CSR) and social
responsibility investing (SRI).6 The CSR/SRI stan-
dards are newer efforts layered over earlier at-
tempts at developing multiple decision-branch-
ing measurement systems, such as data mining
and balanced scorecard approaches.
A growing number of organizations also issue
reports on their environmental and social per-
formance. As has been noted, “More than three
thousand corporations now issue a periodic envi-
ronmental or social responsibility report, and
over seven hundred and fifty voluntarily use the
reporting guidelines issued under the auspices of
the [Global Reporting Initiative, or GRI].”7
Despite the growing interest in environmen-
tal and social performance metrics and report-
ing, however, there is scarcely enough coher-
ence in the field to announce a predominant
standard as yet. In fact, there are over 25 major
standards organizations and/or reporting sys-
tems in use today.8
Even if one set of metrics were predominant
enough to allow for the creation of benchmarks
by industry, current CSR and SRI standards are
Supporting our communities andcustomers in tapping new, higher-risk markets that focus onsustainable technology will positionthem to create the innovativeproducts of the future.
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 31ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
tions in dollar terms, relative to the investment
required to create that impact and exclusive of its
financial return to investors.”10 The purpose of
the SROI index is to provide a standard evalua-
tive tool for assessing the effectiveness and social
impact of funds invested in different business
models.11
Inadequacy of Current Metrics SystemsIn summary, there are no accepted standard-
ized metrics systems for assessing—in hard data—
the triple-bottom-line impacts of businesses that
directly address the uniqueness of locale.
Even more challenging is creating a metrics
system that links meas-
urements for economy,
equity, and environ-
ment—acknowledging
that these terrains op-
erate as a system in
most communities.
A Focus on Place:Creating SBEC’s Metrics Methodology
SBEC decided to address the challenge of
making sustainability a tangible concept within
its region. The organization’s first step in this di-
rection was to enlist the services of a ShoreBank
colleague, Alan Okagaki.
Under Okagaki’s leadership, SBEC reviewed a
list of sustainability metrics drafted by the United
Nations in 1999 and set forth in connection with
its “Global Compact” initiative, which seeks to
promote worldwide environmental and social
standards.12 Okagaki then led a local multistake-
holder team that sorted through this list and se-
lected metrics for adoption. The team’s criteria for
selection centered on asking, “What natural sys-
tems are most critical to this special location
where we live and work?”
SBEC’s headquarters is in Pacific County, in
the southwest Washington harbor town of
still inadequate. These metrics systems tend to
ask questions about policy with a broad brush,
and are largely qualitative rather than quantita-
tive measures.9 Where hard data exist, they often
are neither audited nor auditable.
For instance, in Coca Cola’s 2005 Environmen-
tal Report, water use is computed in a ratio labeled
“liter/standard unit” by “using an internal mea-
sure known as ‘Standard Unit of Concentration.’”
This approach gives the reader no way to under-
stand or verify raw data about the volume of
water used.
Additionally, since most CSR/SRI systems
were devised for use by multiple industries, they
generally are ill suited to the specifics of unique
locations—an aspect of metrics effectiveness that
SBEC has discovered to be essential.
EMS and SMS Approaches Some metrics schemes, such as environmen-
tal management systems (EMSs) and sustainabil-
ity management systems (SMSs), do utilize quan-
tifiable, empirical data. Both of these approaches
grew out of the total quality management (TQM)
movement and were developed primarily to assist
manufacturing companies in reducing their en-
ergy and materials costs (sometimes called the
“environmental footprint”).
Unfortunately, however, EMSs rarely take into
consideration the cost of services provided by
Earth’s macrosystems, or the business’s impact on
those systems, except as such issues relate to the
company’s use of specific raw materials and its
management of waste. A bigger oversight is that
these effects are rarely integrated into the mission
impact of the enterprise.
SROI IndexThere is also a developing methodology
called social return on investment (SROI). This
set of calculations is intended to capture “the so-
cial impact of a business or nonprofit’s opera-
There are no accepted standardizedmetrics systems for assessing—inhard data—the triple-bottom-line
impacts of businesses that directlyaddress the uniqueness of locale.
Cate Gable32 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
Ilwaco, on a peninsula bordering the Willapa
Bay. As one of the nation’s top producers of oys-
ters—Willapa Bay produces nearly 20 percent of
the nation’s shellfish—the region is most criti-
cally impacted by watershed health and water
quality. See Exhibit 4. Reflecting this impor-
tance, two of the nine metrics chosen by SBEC
relate to water quality.
SBEC’s Metrics SetSBEC measures outcomes in three categories:
economic, environmental, and social equity—
hence, the triple bottom line (or, as it is some-
times known, “the 3Es”). The metrics data
points are customized to place and are relevant
to the coastal watersheds, rural communities,
and resource-dependent families of SBEC’s spe-
cific target areas.
SBEC measures the impact of its loans and
programs on a quarterly basis, focusing on the
categories shown in Exhibit 5. SBEC’s metrics
are defined as follows.
Economic Metrics• Jobs created and/or retained: New full-time
equivalent (FTE) jobs anticipated or projected,
and existing jobs retained.
• Leveraged investment: Additional investment
that SBEC’s loan attracts to the region (the
shorthand definition is “other people’s
money” brought into the deal).
• Value-added business: Using a raw resource
produced or harvested in the region to create
a “value-added” product. Examples might in-
clude a restaurant or fish market that uses
local fish or produce, or a furniture maker
that uses local wood products. Fostering the
“value-added” approach allows the upscale
market value of raw resources to stay within
the community economic network rather
than being shipped out to markets in an
urban center.
Environmental Metrics• Linear feet of riparian zone impacted: Num-
ber of linear feet along a river or near a
Exhibit 4. Oyster Harvest
Exhibit 5. SBEC Metrics Set*
Economic Outcomes Environmental Outcomes Social Equity Outcomes
Number of Full-Time Jobs Created Functioning Riparian Zone (feet) People of Color and Women and/or Retained (#) Entrepreneurs Assisted (#)
Leveraged Investment ($) Land in Sustainable Management Low-Income Families Assisted (#)(acres)
Number of Value-Added Businesses Gallons of Water Diverted from the Local Land Tenure ($ appraisal)(#) Waste Stream (gallons)
* Units of measurement are in parentheses.
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 33ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
work). These outcomes, over time, impact the
larger systems at play in the region.
Hitting as many metrics targets as possible
over time can “connect the dots” and result in it-
erative transactions that create positive change in
SBEC’s operating territory (see Exhibit 6).
In SBEC’s view, a loan is more than money
lent. A loan must deliver measurable results—
river/streambank that are either restored, re-
habilitated, or maintained as part of a healthy
ecosystem.
• Sustainable/certified organic land: Number of
acres of land retained or brought under certi-
fied organic or sustainable management.
• Water diverted from the waste stream: Ap-
proaches that contribute toward this goal
might include, for example, use of stormwater
catchment systems that allow rainwater to fil-
ter through the soil by means of onsite
bioswales, permeable parking surfaces or
walkways, or use of improved/engineered sep-
tic systems with drainfields.
Equity Metrics• People of color/women owners assisted: A busi-
ness qualifies if 50 percent or more of the own-
ership interest is held by ethnic “minorities” or
women; or where the organization is a non-
profit, if a majority of seats on the board of di-
rectors are held by women or people of color.
• Low-income families assisted: “Low-income”
families are defined as those earning no more
than 80 percent of Pacific County’s median
annual salary (now $35,000) based on census
data for 2000. “Assistance” can refer to ser-
vices of any kind, including the loan itself.
• Local land tenure: This metric captures data
on local ownership of land using the ap-
praised value of the property, business, or
structures purchased by a resident borrower. It
helps keep ownership and management of
businesses or property in the hands of local
residents.
SBEC’s Theory of ChangeThe nine-point TBL metrics system works in
concert with SBEC’s theory of change—called
“connecting the dots.” SBEC’s products and pro-
grams (the outputs of its work) are designed to
produce specific results (the outcomes of its
Exhibit 6. SBEC's Operating Territory
Cate Gable34 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
restoration of a certain number of linear riparian
feet, for instance, or diversion of a certain
amount of water from the waste stream. These re-
sults support an intentional process of change.
(Exhibit 7 illustrates this theory of change,
using the example of a project that involves loans
to upgrade septic systems.)
Through its work, SBEC supplies important
resources: human talent, financial capital, risk
tolerance, and subsidies. Targeting these scarce re-
sources to defined, strategic locations helps de-
liver dense outcomes (dots) that can be con-
nected. The physical proximity of these outcomes
(and the ecological functions they often support)
helps the outcomes to amplify one another. The
dots adhere and connect themselves, or can be
connected by others.
SBEC’s economic, social, and environmental
outcomes combine and synergize with the coor-
dinated (and sometimes serendipitous) outcomes
of others who may be focusing on the same com-
plex, interrelated problems in the same place.
Over time, iterative and dense outputs from
coordinated action cause a tipping point to be
reached. Communities move away from isola-
tion, market dysfunction, environmental degra-
dation, and economic inequity. They move to-
ward regionalism, functioning markets,
environmental quality, and more widely dis-
persed economic opportunity. Over time, a criti-
cal mass of outcomes translates to “scale.”
SBEC finds that tipping points can be acceler-
ated when the risk appetite of civic and business
entrepreneurs is fueled by rational self-interest
and deep affection for place. SBEC capitalizes on
both self-interest and the power of place, deploy-
ing its risk tolerance and management capacities
to support entrepreneurship as a force for
progress.
As a financier, SBEC influences early business
decisions in a way that will enhance outcomes
over time. As a source of information about mar-
kets, business strategy, production processes, pol-
icy, and environmental stewardship, SBEC influ-
ences ongoing decisions. When appropriate,
SBEC can merge its roles and share in the risks of
innovations that offer the promise of changing
“business as usual” practices that frustrate
progress.
SBEC augments the outcomes delivered by en-
trepreneurs with outcomes delivered by others
who are focused on issues of broader concern,
such as policy and land-use issues, affordable
housing, workforce training, watershed restora-
tion, civil rights, and market development.
Whenever possible, SBEC delivers its products
in ways that directly support the outcome contri-
butions of its partners. Physical proximity of
combined outcomes allows them to become
dense and additive.
In rural locations, focusing on targets that
qualify as economic centers for surrounding areas
enables positive change to reverberate within the
commercial, social, and political networks that
emerge around these centers. Likewise, when tar-
geted rural locations reflect natural boundaries
Exhibit 7. SBEC’s Theory of Change: Outputs Lead to Impacts
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 35ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
deal consideration, and are included in presenta-
tions to the SBEC loan committee. When a loan
is approved and closes, the metrics information
associated with it becomes a permanent part of
SBEC’s triple-bottom-line data and benchmarking
goals for the year. Exhibit 8 shows SBEC’s TBL
metrics total for year-end 2004.
Riparian Protection“Linear feet of riparian zone impacted” is
among the most straightforward of SBEC’s envi-
ronmental metrics. As indicated above, the term
“riparian” relates to bodies of water, generally
rivers or streams. This metric measures loan prod-
ucts that support river health by documenting
both local control over riparian systems and
proper river stewardship along the banks of
streams or rivers.
The edges of rivers and streams are critically
important to watershed health. Trees on
stream/riverbanks provide shade to cool the wa-
ters and create a healthy habitat for riparian crea-
tures, particularly salmon.
Grazing and stream crossing by cattle can de-
stroy riverbanks, disturb spawning beds, and de-
posit animal waste that degrades water quality.
Since water quality is extremely important for
fisheries, shellfish, and agricultural industries in
our area, and since our region also supports dairies
as part of the agricultural and economic mix,
(e.g., watersheds), the environmental impacts of
change are amplified by natural function.
Emerging functionality in markets, leader-
ship, social networks, community capacity, and
relationships with the environment can help sus-
tain continued progress. Planted and well-tended
seeds grow and sustain themselves.
Once change is under way, SBEC can shift its
attention to fresh target opportunities—and
bring with it a growing portfolio of relationships
that can inspire the new target areas through the
success of others’ efforts in once-similar places.
Metrics that monitor results in hard data points
can both guide this process and monitor its suc-
cess.
Disciplined measurement maximizes the scale
of impact and allows SBEC to further refine its
lending and community development strategies.
Most important for SBEC is the underlying belief
that environmental issues support economic and
equity enhancement within communities.
Supporting and enhancing environmental
health and sustainability is not in conflict with
economic development. Rather, it supports a
community’s self-sufficiency and resilience.
SBEC’s Metrics Applied to Lending:Discussion and Portfolio Examples
SBEC’s nine metrics are gathered for every
loan as part of preliminary data collection for
Exhibit 8. ShoreBank Enterprise Cascadia’s TBL Results for Year-end 2004
Economic Outcomes Environmental Outcomes Social Equity Outcomes
Number of Full-Time Jobs Created Functioning Riparian Zone People of Color and Women and/or Retained 8,050 feet Entrepreneurs Assisted473 16
Leveraged Investment Land in Organic or Sustainable Number of Low-Income Families $11M Management Assisted
585 acres 2,544
Value-Added Business Gallons of Water Diverted from Local Land Tenure ($)17 Waste Stream $275M
480,600 gallons
Cate Gable36 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
monitoring riparian systems and keeping them
healthy is at the center of our mission impact.
In the SBEC loan portfolio, data on riparian
linear feet must be derived from real estate
boundaries and geographic information. These
data are gathered by the loan officer as part of the
loan application process.
Loans for which this metric category might be
used include projects with riverbank stewardship
or improvement components. For example:
• a dairy farm might use a portion of loan funds
to construct a fence that keeps bovines from
trampling river/streambanks or
• a land management loan might include funds
to be used for restoration and protection of ri-
parian areas by replanting of trees, or mitiga-
tion of invasive species along a waterway.
Elk River Land TrustSBEC’s Elk River Land Trust loan involved a
watershed located in Curry County on the south-
ern Oregon coast, approximately four miles from
the fishing village of Port Orford. This loan in-
volved an extremely creative partnering of a non-
profit organization, a private foundation, a state
water management agency, and enterprise collab-
oration in order to promote land stewardship and
conservation in the Elk River watershed.
The 40-mile-long Elk River flows to the north-
ern end of a coastal region known as the “Wild
Rivers Coast.” It is one of four rivers within the
Wild Rivers region that has a federal “wild and
scenic” designation. The Elk River also is among
the best salmon and steelhead fishing waterways.
The Elk River watershed encompasses the
Grassy Knob Wilderness, one of three federal
wilderness areas on the Oregon coast. The water-
shed is also home to significant populations of
endangered Marbled Murrelets.
SBEC’s loan supports restoration and protec-
tion of almost 2,700 feet of this remarkable
stretch of the Elk River, a prime riparian zone in
Oregon State. See Exhibit 9.
Quantitative Metrics and the SBEC Mission Although measurement clearly is valuable,
isolating particular quantitative metrics can cre-
ate a “transactional” view within a lending insti-
tution. It is important to remember that moving
toward triple-bottom-line impacts is a process,
not a transaction.
The reality in the lending world is that some
loans hit more strongly in one metric category
(economy, environment, or equity) than in oth-
ers. The goal, however, is always to understand
that the loan represents a process of improve-
ment that takes place over time. An ideal loan has
a dense scattering of “dots” that reflects a range
of values across all categories.
The nine metrics discussed here are not the
only indicators SBEC uses to measure the success
Exhibit 9. Elk River Land Trust: TBL Loan Metrics
Economic Outcomes Environmental Outcomes Social Equity Outcomes
Number of Full-Time Jobs Created Functioning Riparian Zone People of Color and Women and/or Retained 2,650 feet Entrepreneurs Assisted
Leveraged Investment Land in Organic or Sustainable Number of Low-Income Families $266,000 Management Assisted
163 acres 600
Value-Added Business Gallons of Water Diverted from Local Land Tenure Waste Stream
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 37ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
Native Americans and residents in this area of
southwest Washington.
Shoalwater Bay is Washington State’s third
smallest tribe, and one of its most remote. The
Shoalwater Reservation, created by President An-
drew Johnson in 1866, is located about 20 miles
east of U.S. Highway 101 near Raymond, Wash-
ington. It has a population of approximately 264
members.
Before 1994, Native Americans residing in Pa-
cific County were obliged to drive over 80 miles,
one-way, to seek medical care at the distant Quin-
ault Indian Reservation. Based on medical records
documenting high rates of prenatal and neonatal
of its loan portfolio (or its own financial health).
Any business, to be sustainable, must monitor its
economic well-being. These nine TBL measure-
ments do not replace traditional accounting
methods.
There are myriad state and federal reporting
requirements for financial institutions. SBEC uses
all the traditional measurements (such as loan
loss, borrower creditworthiness, loan fees, and
cost of funds), as well as other approaches, to
monitor its lending products.
The point is that SBEC’s nine metrics capture
a trend in the institution’s portfolio: How well are
we doing in finding and funding deals that sup-
port our integrated lending goals?
Shoalwater Bay Indian Tribe Wellness CenterAnother example of a loan that bridges the
range of SBEC mission impacts is the Shoalwater
Bay Indian Tribe Wellness Center loan.
In 2005 SBEC used a portion of a New Markets
Tax Credit allocation to invest $1.57 million in
the Wellness Center, which is located in Toke-
land, Washington. See Exhibit 10. The new
14,500-square-foot facility offers medical and
dental care, drug and alcohol counseling, and
mental health services to Shoalwater Bay tribal
members. See Exhibit 11. It also serves other
Exhibit 10. Shoalwater Bay Wellness Center in Tokeland, Washington
Exhibit 11. Dental Examination Room in theWellness Center
Cate Gable38 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
infant mortality, the Tribal Council declared a
health emergency on the Shoalwater Reservation
in 1992.
Investment in the Wellness Center is part of
SBEC’s place-based triple-bottom-line strategy for
the Lower Columbia Estuary region of Washing-
ton and Oregon. This strategy seeks to deliver
rural community and economic development
services to distressed communities in the region
(e.g., native tribes) through deploying appropri-
ately designed capital products.
The opportunity to engage in dialogue
about capital broadens the terms of engage-
ment and opens additional channels to discuss
TBL impacts. In the case of the Shoalwater Bay
investment, SBEC was able to deliver informa-
tion and assistance that resulted in “eco-
friendly” onsite water management systems,
thereby supporting one of its mission-critical
metrics. See Exhibit 12.The Wellness Center has six exam rooms to
facilitate patient flow, and allows for enhanced
services such as visiting specialists and an onsite
X-ray machine that will allow the clinic to avoid
sending clients to Willapa Harbor Hospital, a 40-
minute drive from Tokeland.
Many tribal members can walk to the clinic,
as it will be adjacent to the tribe’s primary resi-
dential housing area. Landscaping surrounding
the facility is designed to capture onsite surface-
water runoff from the roof and parking lot and
channel the water into bioswales. The swales,
planted with native wetland plants, act as filters
for water coming off the site, cleaning the water
as it filters into the ground.
SBEC’s TBL Practice Looks to the FutureOver time, ShoreBank Enterprise Cascadia has
come to recognize that an effective TBL metrics
system has the following features. Such a system:
• is based on what is important to place and
people,
• prioritizes competing opportunities,
• emphasizes the importance of productivity,
• provides a continual feedback loop for refin-
ing business strategy, and
• is auditable and trackable.
As SBEC integrates the products and services
offered by its newly enlarged entity (after the Cas-
cadia Revolving Fund merger), metrics formula-
tion will be taken up again. Refined metrics will
seek to reflect the new urban territories of Seattle,
Washington, and Portland, Oregon, and the
metro-corridor between them. New questions
also will need to be asked:
• How can we measure our success in an urban
environment?
Exhibit 12. Shoalwater Bay Indian Tribe Wellness Center: TBL Loan Metrics
Economic Outcomes Environmental Outcomes Social Equity Outcomes
Number of Full-Time Jobs Created Functioning Riparian Zone People of Color and Women and/or Retained Entrepreneurs Assisted30 1
Leveraged Investment Land in Organic or Sustainable Number of Low-Income Families $2.375M Management Assisted
600
Value-Added Business Gallons of Water Diverted from Local Land Tenure Waste Stream $251M340,000 gallons
Environmental Quality Management / DOI 10.1002/tqem / Spring 2007 / 39ShoreBank Enterprise Cascadia’s Commitment to Triple-Bottom-Line Metrics
new market opportunities—for green building, e-
waste recycling, renewable energy sources, energy
conservation, and lean manufacturing—and
opens new sources of capitalization. Additionally,
new terrain opens for creating nontraditional col-
laborative partnerships.
SBEC embraces a holistic theory of change
that features process, not transaction. We under-
stand the synergistic power that arises from den-
sity of outcome, and we appreciate the impor-
tance of focusing on and measuring the true
impact of our work.
ShoreBank Enterprise Cascadia invests in peo-
ple and their communities to create economic eq-
uity and a healthy environment. Continued ef-
forts to improve and refine a disciplined
approach to triple-bottom-line metrics are critical
to reaching these goals.
For More InformationFor further information about ShoreBank En-
terprise Cascadia, visit www.sbpac.com.
AcknowledgmentShoreBank Enterprise Cascadia would like to
acknowledge the work of our partner organiza-
tion, Coastal Enterprises, Inc., of Wiscasset,
Maine and the Ford Foundation for support of
the Triple Bottom Line Collaborative, a commu-
nity of practice working to advance the tools and
methodology for triple bottom line investing.
The article partially reflects the work of this group
and our report entitled “Building a Triple Bottom
Line Movement in the CDFI Industry.”
Notes1. World Resources Institute. (2005). World resources 2005:The wealth of the poor. Washington, DC: World Resources In-stitute; p. 12.
2. A recent report predicts that fisheries will collapse world-wide by 2048. See Worm, B., Barbier, E. B., Beaumont, N.,Duffy, J. E., Folke, C., Halpern, B. S., et al. (2006). Impacts ofbiodiversity loss on ocean ecosystem services. Science, 314,787–790. Available online at http://myweb.dal.ca/bworm/.
• How can rural and urban communities work
in a system of support that increases TBL ben-
efits for both?
• What metrics do we need to guide our lend-
ing strategies and target the possible synergies
of neighboring rural and urban landscapes?
Concluding Thoughts A disciplined approach to triple-bottom-line
investing is fertile ground, strategically, for fi-
nancial service providers. Even though environ-
mental challenges are now becoming clearer,
and advocates are appearing from all segments
of our society, the field of sustainability is still
in its infancy. TBL metrics theory, and formula-
tion of methodologies that can support sustain-
able practice, are even less developed. The
emerging opportunity requires clear and strate-
gic thinking.
SBEC seeks to forward the dialogue on what
TBL investing is (and what it is not). Our hope
is that, with new language and tools, efforts to
refine TBL metrics can bring tangible discipline
to the terms “sustainable development” and
“triple-bottom-line investing.” Our goal is to
help stakeholders in our industry, and others,
sort the “fluff” from the hard empirical evi-
dence, and filter out data that have no connec-
tion to business mission.
SBEC strongly believes that traditional
strategic goals gain power by being combined
with environmental improvement. Our cus-
tomers’ lives are improved when environmental
amelioration is treated as central to the tradi-
tional CDFI lending mission of social equity and
economic development. In effect, SBEC is at-
tempting to move the CDFI industry from two
Es to three Es by integrating environmental in-
dicators into the practice.
Our approach includes an element of self-in-
terest. SBEC has found that incorporating envi-
ronmental goals into lending strategies creates
Cate Gable40 / Spring 2007 / Environmental Quality Management / DOI 10.1002/tqem
3. Data from the Silicon Valley Toxics Coalition can be foundat http://svtc.etoxics.org/.
4. In its report entitled “Our Common Future,” the Brundt-land Commission (known formally as the World Commissionon Environment and Development) noted that economic de-velopment often leads to deterioration, not improvement, inthe quality of people’s lives. The Commission called for “sus-tainable development” that would, in the words of the report,meet “the needs of the present without compromising theability of future generations to meet their own needs.”
5. Microlending institutions, which specialize in small loansto borrowers in developing nations, also understand the needfor a triple-bottom-line approach to lending. The 2006 NobelPeace Prize was awarded to Muhammad Yunus, founder ofGrameen Bank, a pioneering microlender.
6. These terms have gained traction with corporate executivesin the post-Enron marketplace. The terms “triple bottom line”and “sustainability” are more often the vocabulary usedwithin the activist or advocacy communities.
7. Savitz, A. W. (with Weber, K.) (2006). The triple bottomline. San Francisco: Jossey-Bass; p. 211.
8. The list of organizations and standards includes the GlobalReporting Initiative (GRI); Future 500: Global Citizenship 360;New York Stock Exchange (NYSE) (Section 303A, corporategovernance standards); Goldman Sachs (best practices recom-mendations); Malcolm Baldrige National Quality Award Pro-gram; Social Accountability 8000 (SA 8000); Center for Cor-porate Citizenship at Boston College; International Chamberof Commerce (ICC); World Business Council for SustainableDevelopment (Development and Corporate Governance Prin-ciples); Dow Jones Sustainability Index; FTSE4Good Index Se-ries; Global Sullivan Principles; Domini Social Investments;Calvert Group; UN Global Compact; Coalition of Environ-mentally Responsible Economies (CERES); Caux Round Table;and Smart Growth Network. Other indices and organizationsinclude the AA1000 Framework, Business in the Community(BITC), the Interfaith Center on Corporate Responsibility
(ICCR), the Organisation for Economic Co-operation and De-velopment (OECD), and Innovest.
9. Savitz and Weber note, “Roughly half the GRI indicators arequantitative and can be answered with a number; half arequalitative, requiring a description of policies, procedures, orimpacts.” Savitz (with Weber), op. cit. at p. 214. These authorsgo on to add that “quantitative indicators present technicalhurdles, such as defining, gathering, and checking the dataand making sure that information drawn from facilities, divi-sions, and departments in various geographical areas can berolled up into one number . . . .” Ibid. at p. 215.
10. This definition and the underlying methodology for cal-culating SROI were developed by REDF (formerly known asthe Roberts Enterprise Development Fund). See www.redf.org.Although SROI is an attempt to apply financial accountingprinciples to social purposes, its methodology is experimentaland highly subjective. Its strictly dollar-based calculations in-clude no established standard for determining the appropriatediscount rate of funds, for example. In most cases, the dis-count rate used in an SROI calculation is provided by the prin-cipals of the business, since SROI has been most often used forventure capital pitches and fund raising.
11. A related discipline is being promoted by practitionerswho seek to address implementation issues affecting the cred-ibility and standardization of the SROI social impact analyses.Groups in this category include, among others, the SocialVenture Technology Group (www.svtconsulting.com) and thesponsors of a business-plan and SROI competition adminis-tered by the University of California Berkeley Haas Schoolcalled Global Social Venture Competition (GSVC)(www.haas.berkeley.edu). Some participants advocate abenchmarking practice called the Standard for Social Returnon Investment Analysis (SSROI), which is a by-industry in-dexing of SROI in order to compare social and environmentalimpacts across companies within like industries so that man-agers and investors can design, guide, and fund investmentsto maximize both financial and social returns.
12. See http://www.unglobalcompact.org/.
Cate Gable, who specializes in triple-bottom-line metrics, serves as manager of special projects at ShoreBank EnterpriseCascadia. She is the author of Strategic Action Planning NOW! (St. Lucie Press). Ms. Gable teaches strategic planning atboth Bainbridge Graduate Institute (which offers a sustainability-based MBA) and Hautes Etudes Commerciales, the topbusiness college in Paris. She can be reached at 360-642-4265 or by e-mail at cgable@sbpac.com.