Just Money
Book

Just Money

Mission-Driven Banks and the Future of Finance

Katrin Käufer and Lillian Steponaitis
MIT Press, 2021
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Money matters: The way people spend and invest money doesn’t just affect them but also the rest of humanity. To secure a stable and thriving future for the world, critical innovations in financial institutions’ missions and products are essential, say sustainability experts Katrin Käufer and Lillian Steponaitis in this forward-looking work. They advise banks to adopt an “ecosystem perspective” in assessing their investments’ broader impacts on people, communities and the planet. This book’s power rests in its lucid guidance to financial professionals on operating a “mission-driven bank.”

Summary

Financial institutions can help forge the future.

Investments influence what people do, where and how they live, and how they respond to crises. Climate change, economic inequality and the COVID-19 pandemic make it clear that humanity faces daunting challenges. And financial institutions, as investment intermediaries, have a significant role in building a sustainable world.

Who can get a loan and for what purpose partly determines how a society evolves. Indeed, banks decide whether and to what degree an individual or a business can fully participate in the economy. The review process for loan applications needs to extend beyond profit as the singular criterion and include evaluations of businesses’ profit-generating activities for their social and environmental impacts. For example, a loan to convert an industrial building to solar energy would raise a company’s profit by reducing its operating costs. On the other hand, a bank could deny the loan if company executives use the gains to expand an activity that damages the environment, such as the production...

About the Authors

Katrin Kaufer is the director of Just Money at the MIT Community Innovators Lab at MIT. Lillian Steponaitis is a research affiliate in the MIT Community Innovators Lab and a special projects manager at the Self-Help Federal Credit Union.

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