25.3.2019 Miika Koskela

One of our favorite banks is a B Corporation

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WHEN TALKING about sustainable financial business, some might think setting up solar panels at the headquarters or buying electric cars for executives.

Minimizing the impact on the environment is something that everyone should work on. Above all, sustainability in the financial industry should be about the way of doing business.

LOMBARD ODIER is one of the largest private banks in Switzerland and Europe. It has offered wealth and asset management services to private individuals, families, and entrepreneurs since 1796. The company has helped many of its customers live through 40 financial crises.

What is the secret behind Lombard Odier’s success?

SINCE INCEPTION, the owners of Lombard Odier has run the company. As a privately owned bank, the managers are free from the pressure of external shareholders looking for short term gains. Instead, the company can focus on providing their customers with the best long-term solutions.

Moreover, originally Lombard Odier was an unlimited liability partnership, meaning that the owners assumed liability for all losses with no limit. To this day, the owners commit all their personal assets to the bank. In our view, this is a strong incentive to make sure all the managers think long-term.

Lombard Odier ensures survival through economic cycles by having a recession buffer. A sustainable financial company doesn’t call government (i.e. taxpayers) to rescue during recessions but makes sure to have enough cash at all times. It’s as simple as that.

IN MARCH this year, Lombard Odier received the prestigious B Corporation certification for its environmental and social performance and governance. They are the first global bank to meet the rigorous standards of B Corp.

For Lombard Odier the certification is a natural milestone on their path of making sustainable business. The company has operated with the same healthy principles already decades before the whole ESG discourse had ever emerged.

WE AT HCP, warmly welcome Lombard Odier joining the global family of B Corps. Almost exactly two years ago, we obtained the same certificate.

All our permanent employees at HCP are owners of the company and are thus committed to doing business with long-term goals. Moreover, to maintain our independence we have not diluted our ownership. Like Lombard Odier, we have also saved a recession buffer to make sure we have cash when the economic cycle turns down.

With 40 recessions under their belt (and CHF 259 billion assets under management) Lombard Odier is in its own league. We are still small and yet to face our first recession. But we are confident that we are on the right track.

We analysed Facebook’s sustainability shortcomings and decided to keep investing
Ethical investments – the trend and analysis, Part 1
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