When I incorporated Capital Good Fund on February 10, 2009, I was working on a master’s degree in environmental studies. It should not be surprising, then, that our initial mission statement was “to create a poverty-free, inclusive green economy.” After all, not only was my expertise in the area of environmental sustainability, but the link between poverty and environment, even then, was clear. The environmental justice movement is based on this link: rising energy costs and seas, crop failures, floods, and other consequences of climate change disproportionately impact marginalized groups around the world–indigenous communities, people of color, the poor, women, refugees, and so on.
However, after a few years we decided to tighten the mission statement, focusing it entirely on the issue of poverty; it then became, “to create pathways out of poverty through equitable financial services.” We did this because we felt that, at such an early stage of our organizational growth, with so much going on and so much work to do just to clarify our business model, it was overly ambitious to try to tackle both poverty and environmental degradation. So why did our Board of Directors and Executive Team just vote to update our mission statement? Let’s take a look.
First, the new mission statement is “to create pathways out of poverty and advance a green economy through inclusive financial services.” Pithy-yet-ambitious!
Several factors have played a role in the update:
- Climate change has gotten worse. In 2019, massive fires raged in Australia, the Amazon, California, and elsewhere. Temperature records keep getting set, including in Antarctica, where it recently was over 65 degrees fahrenheit. The concentration of carbon dioxide in the atmosphere is increasing rapidly. And even as the pace of the crisis is moving faster than the worst-case scenarios forecasted by the scientific community, almost no serious action is being taken to combat the crisis. We have to do something.
- Energy-efficiency loans (which we call the “DoubleGreen Loan“) have become an increasingly important part of our business model, impact approach, and loan portfolio. Of the roughly 4,700 loans for $10 million that we have financed, 27% have been DoubleGreen–375 loans for $2.7 million. They are also the strongest-performing product, with a default rate of just .59%, and, partly as a result, the loan that generates the most revenue.
- DoubleGreen is crucial for our scaling plans. As we work toward our 2024 goal of generating 100% of our revenue from interest income, DoubleGreen loans, and the revenue they generate, are a critical part of our earned-income strategy.
- Funders and investors love the product. For all the reasons mentioned above, not only are we fans of the DoubleGreen loan, but many of our funders and investors are attracted to us in part because we have an energy-efficiency loan portfolio.
- The loans have myriad social impacts. In addition to saving homeowners roughly $400 per year on utilities, DoubleGreen loans also create so-called “green jobs”; improve the health and safety of the home; increase property values; and reduce greenhouse gas emissions by 2.5 metric tons of carbon dioxide-equivalent emissions per year.
I am thankful to have engaged with our staff and board members on this important adjustment to our mission statement. The new mission more closely aligns with our values, the needs of the community and the planet, our revenue goals, our business model, the interest of our funders and investors, and our passion for, and deep concern about, the future of the planet we call home.