By Mark P. Dangelo
The struggle or dissonance between what is right and what is easy could be written as the epitaph for the mortgage industry. However, I’m not prepared to go quietly – how about you? As our industry begins a rebirth with new ideals and new players, we are confronted with a contemporary set of principles of operations that cannot be ignored and are not necessarily simplistic or intuitive – the ideals of “going green.”
When I listen to the environmental leaders and Noble prize winners, I get passionate. I want to go tend my garden, plant a bush, convert my home to solar, and even hug that oak tree in the front yard. Yet, as I look at how the FSI and mortgage industry plans to “go green” I am confused and astounded.
Like a pilgrim in search of religious awaking, I began to ask questions on my journey to find the magical words or dispel the heresy. What is the real value chain within a FSI / mortgage green offering and how do all the pieces get assembled into a sustainable series of iterative offerings? Moreover, is it profitable beyond the seemingly shameless marketing promotion of “green” in an effort to rebrand a non-green product or poor process?
Hmmm. I needed to reach out and seek additional guidance.
I spoke with Cary Burch, founder of Green Score Network and CEO of LSSI, about his views of green FSI and mortgage products. “I believe there is a growing and necessary call to action for our industry. For too long our operations were mired in the automation of manual processes. We claimed success with green initiatives because we had standards, did imaging, and in general promoted ourselves as being ‘e’ compliant. However, we failed to understand the comprehensive nature of green for our industry and the implications of its adoption. We touted progress, but we had limited metrics, measures or independent scoring to provide an objective baseline. As of late, we have become all about data and technology, yet we are repeating the same ‘sins of the past’ without understanding their context and their usage.”
Adding focus and clarity for this column, I need to ask is “green” innovative, or by merely uttering the word “green” the magic happens? Yet do the ideals of green represented create an Innovative Dissonance™ where the adoption the green innovations require the disassembly and sun-setting of “accepted” operating beliefs? Is the pain of doing away with the old (e.g., process, relationships, technology, and personnel) too horrible to reconcile in the face of new realities?
So in the headwind of too many questions, even after talking with personnel within and outside of our industry, I reverted to my comfort zone to avoid my own dissonance – I began to draw. After several iterations, the result was something I was not intuitively anticipating.
The above model pointed to a “stack” of green cross-sections rooted in ideals that extend well beyond the influence of the mortgage industry. However, the stack is something we can control and extend into our operations to bear fruit. The harvest of our planting takes many forms and sizes – ‘e’ solutions, environmental products and services, investor demand, and profitability to name but a few. Each cross-sectional stack is interrelated and co-dependent upon the ones it touches all the while being influenced by external factors and resistance to change. The model, like the tree it represents, was meant to grow and change as part of a circle of renewal (e.g., see symbolism of the sun in the sky, the hawk, and the mouse, et al).
I showed Mr. Burch my model. He responded, “Our historical discussions on green were excellent starting points for the industry. We need to move beyond those embryonic ideals and recognize the growing complexity as we expand from these disjointed efforts into a series of streamlined green processes that promote environmental and operational success. I foresee a growing base of ideals that help organizations assess, rate, and improve their ‘green score’ over a period of time. If we recognize and embrace a comprehensive value chain of green ideals, we can achieve not only benefit for the environment, but also for sustainable bottom line results, investors, and yes, our customers. How we react as an industry and individual organizations will determine our operational survivability.”
All these discussions caused me to pause and reflect — “Most people are on the world, not in it - have no conscious sympathy or relationship to anything about them - undiffused, separate, and rigidly alone like marbles of polished stone, touching but separate.” When John Muir, the founder of the Sierra Club, made this statement in 1873, he could have never thought how true his words would resonate over the next 135 years. However, as we eagerly and necessarily embrace green ideals and operating principles within the FSI / mortgage industry, we must come to grips with what is marketing, what is easy, and indeed what is a necessity as part of the expanding “green” value proposition.
Here’s an interesting question as we mull over the future of green — out of the $24.3 trillion USD in outstanding household and small business debt, how much of it is related to “green” investments, products, assets, and securitizations? What percentage will be green in five years and how much of its market share will you influence? Will you be a player at all?
If you are looking for a different POV and the input from other industry leaders I spoke with during this last week, seek out my other article entitled “Green Identity.”