Ken LaRoe is undaunted by the momentum of the current anti-ESG movement, especially among the politicians in his state, Florida.
LaRoe — an entrepreneur, attorney and environmentalist who founded Climate First Bank in St. Petersburg in 2020 — is making loans to Florida consumers who install solar panels. He is also turning a fintech the bank acquired into a nationwide solar lender and a provider of an app consumers can use to measure the carbon impact of all their purchases.
LaRoe has worked at three banks — two community banks in Florida and the former SouthTrust Bank — and has founded three: Florida Choice Bank, First Green Bancorp and Climate First. The most recent de novos have an environmental mission.
In an interview, Roe — who is Climate First's CEO — shared the progress his new bank has made so far and his plans to help consumers make financial decisions that align with their environmental, social and governance values.
You launched a new platform for solar lending a little over a year ago. Can you say anything about how that's going? How many loans have you made?
KEN LAROE: We launched it in May of last year. Since we launched, we have processed $134 million in applications. We've got $66 million on the books, 1,300 loans right now. We were doing well over $10 million a month in production when we started, and that's when rates were around 4%. They're now above 8%. It slowed down because just the raw economics are starting to get to where a consumer can't save money on their electricity today. It'll change when the rates go up again, which they will next year in every state. So it's at that point of break-even viability for the customer. And so it slowed down. We're trying to figure out how to amp it up because we not only want to make money on it, but we want to make a difference. My dream was that people would come into central Florida and go, my gosh, where's all this solar coming from? And somebody would say, well, there's this cool little bank that's doing it. So we're really pleased, really happy. And that is totally a technology play. We're really pleased with what we've been able to accomplish with our proprietary code.
Could you offer this nationally?
Yes. Our de novo business plan did not allow us to go out of Florida, but we're gearing up now to launch throughout the Southeast. We're also working on a partnership with a bank in South Carolina to help them. We would write the proprietary code to talk to their core and their document preparation system. And then we would help them with deal sourcing, setting up the installer network, everything we know how to do. So we may get into the South Carolina market indirectly really soon. And we're working on launching in Texas through our fintech, where we would fund the loans through our holding company and we would pass money down to the fintech in the form of a loan. They would turn around and loan it out to solar borrowers, and we would service those loans in the bank.
Which fintech are you working with?
It's our fintech, One Ethos. We formed it in December of 2021. We bought a fintech, Ecountabl, and then we immediately thereafter launched One Ethos and enrolled Ecountabl into One Ethos. But it's a subsidiary that's majority-owned by our holding company.
Is it going to be a lender itself, or is it going to partner with banks?
It would be a lender itself under this plan that we're working on. But it's also a technology provider. So we're going to be a technology provider for other banks as well as ourselves. We are writing our own code for it. And it's exceedingly multifaceted as you can imagine, because you have to look at the Scope 1, 2 and 3 emissions and what is it that we can impact. And in order to impact it, you've got to measure it. So we've been working to try to be able to — through automation — know, for instance, if a customer is values-aligned and how are they values-aligned. Are they values-aligned only in racial equity or financial inclusion or the values-aligned in environmental topics — that sort of thing. Because we need to be able to track what our impact is.
Ken LaRoe, whose First Green Bancorp was sold a few years ago, is seeking approval for a de novo called Climate First Bank that would cater to low-income communities hurt by climate change and favor ecology-minded tech vendors.
Ecountabl, the company we bought, had developed an app that allowed the consumer to go in and stipulate where their values lie. And again, you could pick environmental, LGBTQ, social equity, financial inclusion, and then it will scrape your financial data and tell you, for instance, if the company you just purchased something from aligns with your values or not. It was going to be able to track your carbon footprint based on your purchase. Our objective is that that will be part of our online banking, at both the desktop level or the mobile device level. As part of your online banking with us, you will be able to track your impact and actually get an impact score. And then we will have the data, whether it's anonymized or not, that will know the impact we're having through our consumers.
Is there anything in there that takes into account factory farming? As you know, factory farms are huge generators of carbon emissions, and they commit systemic animal cruelty on a really massive scale. Some ESG calculators take animal welfare into account. Is that something you would consider?
We would definitely consider it. I can tell you that ours right now does not take that into account. But one of my passion projects is food sanctity. It's an absolute abomination what's happened to our food system, and it's relatively recent, farming at an industrial scale, and absolutely nothing good comes out of it. Nothing good for the human organism. Nothing good for the planet.
