Guns and Fracking Strategies
According to this particular case study, banking can indirectly and directly support guns and fracking as part of their strategy. It is vital to note that environmentally-friendly premises are cost-effective and cheaper to maintain in the long run. Matt, whose intention is to put up a building for the sake of promoting environmental stewardship needs all the support he can get in terms of low-interest rates banks (Pasiouras et al., 2009). The incorporation of sustainability can be applied in line with two principles: combining eco-friendly and social obligations within a bank’s activities via ecological inventiveness such as recycling programs and upgrading energy effectiveness. Additionally, it would be a strategic move to fund and assist Matt achieve his vision by funding his plan and ideas. For instance, Matt plans to hire an architect who would make the building while incorporating environmental considerations such as solar-powered windows, wind-powered turbines, louvered roofs, and butterfly-shaped rooftops to direct the rainwater out of the roofs and into underground dug tunnels (Yamori et al., 2013). When banks support these ideas, they will come up with cost-effective ways of supporting environmentally friendly projects. These will save costs that would otherwise have gone into funding expensive projects which lack environmental considerations.
The banking sector must carefully consider everything before funding a project. Environmental projects provide a platform for minimizing risks and impacting society on a larger scale than other projects (Cetorelli, & Peristiani, 2012). From Matt's perspective, value-based approaches to banking would steadily and gradually grow the financial muscles of any financial institution as numerous people would seek its banking services due to the environmental policies which attract more deals and fairness within the society. In terms of disagreement on gym issues. Environmental friendly buildings have to accommodate and facilitate different ideas hence a gym within the building is a positive recommendation. Instead of seeking gyms services in a different location, one can exercise in one place and save money and finances (Peek, & Rosengren, 2010). In other words, environmental sustained building considers the utilization of space and flexibility to achieve multiple tasks under one roof. In other simpler terms, the ability to fund cost-effective projects, reduce environmental pollutions increase a company's shares, and grows a business much stronger.
As stated earlier, ethical banking practices concentrate on environmental conservation and sustainability hence Matt has to draft up regulations and rules which are eco-friendly to the natural surroundings. On the other hand, the use and production of guns may not be an environmental issue. However, it is still an ethical issue. Hence, the bank should not just state its position on environmental issues but holistically made its position on gun. Consequently, the bank should make it known its stand on guns since banks have a social responsibility for the society and it can affect various societies with its decisions. Therefore, loaning decisions might be quiet challenging and tasking to bankers (Niepmann et al., 2017). Even though Matt may not know it, his business will in the near future facilitate the issuing of guns either through supplying gun companies with loans or keeping accounts and records of gun holders. Either way, the bank will play a role in impacting gun usage and manufacturing and its impact on the surrounding will be determined by how banks handled its ethical obligations. When the gun issue cropped up on Matt's case, Matt argued that gun regulations are not necessary as his bank would only deal with business aligned to its environmental mission. In order for Matt to get a permit, he had to prove that his bank would be a nonprofit entity and its green banking objectives would take second place. This way, the bank would carry out its activities effectively without compromising the set gun regulations. Banks usually have a tendency to loosen their grip on their rich clients, with gun regulations banks will deny unscrupulous gun dealers loans which will facilitate unlawful production of guns. Approving loans application has various implications on the banking institutions. One of them is that the bank can lose its client or forced to reduce its loan rates hence forgoing profitability. Therefore, being an ethical bank comes with its consequences. The company relies on its objective before it can close any deals. If any deal is contrary to the company's mission, then the company foregoes the project. This is the reason the managers insisted that Matt's first objective is to building a non-profit organization before he can proceed to environmental conditions. It very important for companies to build in place flexibility measures while handling gun issues, for example, accepting loan applications from gun organizations that only issue guns meant for trapshooting or hunting expeditions (Ayadi et al., 2012). The interdependence between banking, the natural surrounding, and social obligation only occurs if the bank incorporates the item design, mission policies, and approaches based on all the three aspects so that all the entities can balance and bring the desired positive result. Time and again the bank has proved essential in regulating business activities and gun regulation.
References
Ayadi, R., Arbak, E., & Pieter De Groen, W. (2012). Regulation of European banks and business models: towards a new paradigm?. Centre for European Policy Studies, Forthcoming.
Cetorelli, N., & Peristiani, S. (2012). The role of banks in asset securitization. Federal Reserve Bank of New York Economic Policy Review, 18(2), 47-64.
Niepmann, F., & Schmidt-Eisenlohr, T. (2017). International trade, risk, and the role of banks. Journal of International Economics, 107, 111-126.
Pasiouras, F., Tanna, S., & Zopounidis, C. (2009). The impact of banking regulations on banks' cost and profit efficiency: Cross-country evidence. International review of financial analysis, 18(5), 294-302.
Peek, J., & Rosengren, E. S. (2010). The role of banks in the transmission of monetary policy (pp. 257-277). Oxford: Oxford University Press.
Yamori, N., Kondo, K., Tomimura, K., Shindo, Y., & Takaku, K. (2013). Japanese banking regulations and SME finance under the global financial crisis. Japanese Journal of Monetary and Financial Economics, 1(1), 59-90.
