Measure What Matters: ShoreBank Enterprise Cascadiaâ€™s

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


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


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.


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.


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.


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.


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


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


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


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


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


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


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


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


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


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


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 [email protected].

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