The Positive Impact of Key4Green

KeyBank

7. Affordable and Clean Energy 11. Sustainable Cities and Communities 12. Responsible Consumption and Production

Overview

Key4Green is a banking initiative, co-created by Andrew Watterson at KeyBank, which aims to aid businesses in investing into renewable energy. Key4Green advises both large and small businesses on renewable energy investments, and helps finance them. KeyBank’s Key4Green initiative allows the world to move towards more responsible production through affordable clean energy.

Authors

Jiro Batt

Jiro Batt

Timothy Rupnarain

Timothy Rupnarain

School

Case Western Reserve University - Weatherhead School of Management

Case Western Reserve University - Weatherhead School of Management

Professors

Chris Laszlo

Chris Laszlo

Gabriela Cuconato

Gabriela Cuconato

Innovation

Andrew Watterson, former Senior Vice President and Head of Sustainability at KeyBank, co-created the Key4Green initiative with the help of the banking team. The initiative served businesses in achieving higher energy efficiency through investments in clean, renewable energy. Watterson held an integral role in the creation of this initiative as there needed to be a way to maximize savings and profitability while also focusing on achieving higher energy efficiency and positive social impact. An emphasis of the initiative is to demonstrate to businesses how they can be energy efficient through prudent investment while also realizing the cost benefits and savings that could result. Key4Green has helped small businesses and large corporations alike with renewable energy equipment installations while also optimizing cash flow. KeyBank provides trusted advisors to businesses to bring capital to the table while helping them move towards both energy efficient equipment like LEDS, or energy creating equipment such as roof solar panels and wind turbines.

Additionally, this initiative also has a hand in providing low-income housing. KeyBank is the third largest lender in the United States in financing affordable housing in low income areas. Key4Green aims to aid investment in on-site renewables and energy efficiency for affordable housing developers.

Another area of focus for KeyBank’s initiative was in private banks, creating ESG (economic, social governance) funds to help focus investments in companies with a high ESG score. According to Watterson, “KeyBank would help in screening [high ESG score] companies to make sure they are doing good from a environmental and social perspective.” Thus, KeyBank not only aided the investment in renewable energy, but also investment in low-income housing and socially responsible companies.

The Positive Impact of Key4Green

Inspiration

As a person who's passionate about the environment and sustainability, Andrew Watterson was always interested in environmentally beneficial policies and business practices. From his time as a student, he believed that businesses should pursue both “positive economic returns as well as a positive impact on society and the planet.” After witnessing the acute, accidental repercussions of well-intentioned projects in Nepal, Watterson knew that he wanted to work to repair and restore the environment. After working for the city of Cleveland as the chief of sustainability, Watterson wanted to drive change from the private sector at KeyBank.

Andrew Watterson co-created the Key4Green initiative with a colleague whom he had been discussing with as a way for KeyBank to use lending practices to accelerate a shift to renewable energy. The idea spawned from a fascinating intuition. Once this idea had been discussed for some time within the bank, Watterson realized that an initiative was needed which “optimized the intersection between the banks and businesses.” This initiative was needed as businesses would be willing to invest into renewable energy, but the organization of businesses often hampered efforts. The main advocate for renewable energy within a company is typically the Chief of Sustainability, who reports to the Chief Executive Officer. However, the Chief Executive Officeroften does not have the budget to invest into renewable energy as the Chief Financial Officer creates budgets. As a result, companies missed out on prudent investments into renewable energy. To optimize the intersection of banking, CFOs and sustainability efforts, KeyBank advocated for investing into renewable energy with the help of sustainability officers. Through this integral realization, KeyBank was able to create the Key4Green initiative to accelerate the shift towards renewable energy.

Overall impact

The overall impacts of this initiative are mainly reflected in social and economic changes to communities in the US as well as businesses. Key4Green has a focus to impact small businesses by helping them achieve higher energy efficiency while also bringing in more capital. KeyBank states a business can typically reduce its energy bill by 50-60% by making facility-wide enhancements (Key.com). KeyBank helps in advising business owners or non-profit managers in investing in the right type of renewable energy as well as realizing potential savings. This is an important initiative that creates positive social impact as KeyBank is helping companies that may not have a plan to be more energy efficient, realize the benefits and improve for the better. Thus, this initiative not only helps KeyBank and their clients become more profitable, but also improves society.

KeyBank also has an auditing process for evaluating a company's ESG score, indicating to private banks if the company is a worthy investment when it comes to an environmental and social perspective. This overall benefits the community by ensuring that companies who remain responsible and earn a high ESG score have an advantage when it comes to seeking investments. KeyBank’s initiative has other social impacts as well, such as their emphasis on affordable housing. KeyBank provides on-site renewables and energy efficiency for affordable housing developers, taking an initiative to help out low-income communities. The Key4Green program serves as a model for other businesses to follow to create positive social and economic impact within their communities, allowing both KeyBank and the local communities to thrive.

Business benefit

The Key4Green initiative unlocked a myriad of benefits for KeyBank, both in terms of success and in terms of recognition. Since KeyBank had built relationships with businesses over years as a trusted partner, KeyBank could take advantage of existing relationships to implement the Key4Green initiative. Using these relationships, KeyBank was able to benefit both existing clients and themselves, as KeyBank would finance these investments into renewable energy. The Key4Green initiative also attracted new clients interested in investing in renewable energy, as Key4Green helped open up the renewable energy investment market.

These sizable investments into renewable energy also helped KeyBank gain media recognition as one of the largest investors in renewable energy. Through this recognition, KeyBank was able to garner positive media attention, allowing KeyBank to boost its brand image as a trusted bank. Through the Key4Green initiative, KeyBank has built a reputation as a top ESG advisor and community builder. On top of this, the Key4Green initiative reinforced their “mission to empower its clients, communities and employees to thrive,” as the Key4Green initiative empowered clients to create better communities, indirectly working towards all aspects of their mission statement. Thus, Key4Green allowed KeyBank to both boost revenues and brand image, all while helping clients.

Social and environmental benefit

The Key4Green initiative has a clear, logical positive impact on society. With an increase in financing and advising for renewable energy, investments in renewable energy will increase. With this subsequent increase in renewable energy, society will be benefitted as a whole as reliance on energy sources such as fossil fuels will decrease, and energy pricing will decrease. These benefits have already trickled down to society, which are observable on a local level. Motorcars Honda in Cleveland Heights was able to install solar panels on their showroom, in large part due to the role of KeyBank and the Key4Green initiative. The addition of solar panels means that Motorcars Honda will be able to use more efficient, cleaner energy rather than rely on fossil fuels.

Another local KeyBank project which has benefitted from Key4Green is Lake Erie Energy Development Corporation’s freshwater offshore wind farm project. Lake Erie Energy Development Corporation set about creating the first offshore freshwater wind farm in the United States. In this project, Lake Erie Energy Development Corporation consulted with advisors from KeyBank for aid. Though this ambitious project has not been completed yet, upon completion an offshore wind project near Cleveland would be able to provide ample amounts of clean energy for low prices. Stories such as this one reflect how the Key4Green initiative aids companies in creating projects which are socially beneficial and profitable for all involved. Through the Key4Green initiative, KeyBank works to make renewable energy more accessible and affordable for all.

Interview

Andrew Watterson, Former Head of Sustainability and Senior Vice President

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KeyBank

KeyBank

Cleveland, Worldwide

Business Website: https://www.key.com/personal/index.jsp

Year Founded: 1994

Number of Employees: 10000+

KeyBank is a multinational bank, servicing mainly the northeast and northwest United States. KeyBank has its roots in the Commercial Bank of Albany 1825, and through a series of mergers, acquisitions, and expansion, KeyBank was officially formed in 1994 when KeyCorp and Society Corp merged to form KeyBank. Headquartered in Cleveland, OH, KeyBank has since grown into a top 25 largest bank in the United States. KeyBank offers a multitude of banking-based financial services to both individuals and businesses alike.