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It would appear that the general press has only recently heard of global warming, and as a result we even have reality TV shows emerging along the sustainability theme.

It is hard in this current climate not to be skeptical that political undertones are creeping, especially so close to an election, however the term “greenwashing” does come to this consumer’s and voters mind.

Because we have been in denial and so slow off the mark, we have sacrificed and tarnished the brand of 'Australia'. Unfortunately it is the case of 'too little and far too late'.

We will need real leadership and a green revolution to claw back and earn global respect that we are not takers but contribute and add to the global economy both ethically and environmentally. Predictably there will be even more greenwashing  immediately prior to the federal election, probably during the advertising embargo; lots of sustainable research from Federal Government Departments will be released - data that has been collated over the years and has been left to get dusty and forgotten, much to the disgust of our scientific community.

Australia’s society has been fiscally managed without the appropriate due diligence to our social or ecological capital. If we ran our businesses like that we would of eroded profits through compliance requirements, businesses are imposed with regulations and still have to perform, so the question has to be asked when will compliance and performance measurers will be applied to the different levels of government.

We are the shareholders, is government managing our investment into this country ethically and sustainability for future generations?

Businesses have identified a need to think about intergeneration and there is rising public concern about what we are leaving for them. Is it equitable to deplete all of their resources for our own purposes? Investors are not only voting with their feet about global warming but are voting with their money … they are choosing ethically responsible firms to look after their investments.

Corporate social responsibility; eco friendly; building social equity: these are all part of the new sustainable language vocabulary. Only recently the concept of sustainability had been brandished into the mainstream of our corporate working lives. Regional Businesses have been dealing with the triple bottom line for generations, so it is of no surprise that some regional firms have conceptualised the bigger picture and are building sustainable business models and profiting from being socially responsible.

Historically these ethical choices of investments originated in the 19th century from the Methodist and Quaker religious movements, and then gained popularity in the 1970’s with consumers choosing not to be associated with firms that benefited from the Vietnam War.

In 1999 the Dow Jones Sustainability Index was launched, in 2006 out of the 18 sub sectors Australia had two companies who were leaders within the banking and financial services market sectors being Westpac and the Investa Property Group respectively for each sector.

Other Australian companies who are on the Index include BHP, Rio Tinto, Coles Group, TABCorp Holdings, WestFarmers, AMP, ANZ, CFS Retail Property Trust, Commonwealth Property Office Fund, GPT Group, Insurance Australia Group, Lend Lease Corp, National Bank, Brambles. Transuburban Group and AGL Energy.
In Australia ethical investments have increased by 41 per cent since 2003, although it is still a small amount of the total investments there is an estimated $21.5 billion in ethical investments. The uptake in the UK has been growing steadily with ethical investments now totaling 11 per cent of the overall investment market.

Locally we see Bendigo Bank acting on a global philanthropic level with the relationship developed with Oxfam. Accountholders can nominate to forgo interest and for the interest to be paid to Oxfam. Over a 6 year period over $3million dollars has been contributed to Oxfam. This is a prime example of the corporate philosophy of Bendigo Bank and also how collectively we can make a change on a global scale.

This month we will have a look at two regionally based businesses who have adopted this ethical investment philosophy, Bendigo Bank on a global philanthropic level and RivWest Finance who are building and increasing our own regional capacity.

RivWest Finance’s tagline details their mission … “Keeping the capital in the country”.  RivWest Finance was formed in 1996 to increase the level of  economic opportunity in country NSW. The original shareholders were mainly based in Wagga Wagga and Western NSW, thus the name Riv (Riverina) and West - RivWest Finance Limited was created.

They have now grown into a public company with over 60 shareholders and representation in Wagga Wagga, Griffith, Temora, West Wyalong, Wollongong, Mittagong, Bega and their head office in Dubbo. Finance is provided for commercial purposes only. This shows a long term commitment and capacity building attitude to regional businesses.

Robert Elliot is the current Chair of RivWest Finance and Bob spoke to Regional Business about why he invests in regional Australia and some of the opportunities that he sees for Regional Businesses.

Q 1. Regionalbusiness.com.au What frustrates you about the cherry picking that occurs in Regional Australia in regards to finance?

It seems everyone from Sydney or Melbourne who sells a property for a silly price these days immediately does two things – they buy a farm and start a finance company to operate in the country where there is supposedly an unsophisticated market ready for development.

It will be interesting to see how many financiers are really only “fair weather friends”, when any future economic downturn occurs. There seems to be an over-supply of money at present and it’s looking for a home.

There are numerous examples of companies investigating regional NSW as a possible market

In the past few months our opinion has been sought by:

• A New Zealand company looking for markets to expand its finance operations for business electrical equipment.
• A market research company for a global agricultural manufacturer looking to expand into the financing of second hand equipment.
• Melbourne-based technology financiers wanting to expand
• Numerous Sydney based wholesale funders looking for retail outlets

I like to think our firm and similar country based firms have contributed to the improvement in finance availability in recent years for regional business and will stay around through droughts and economic downturns.

Q .2 Regionalbusiness.com.au You currently have your 6th prospectus available now, can you explain some more about what the money will be invested in?

We have around $13 million currently invested in our debentures. Added to that are Bank funds and our shareholders funds to total some $18 million which has been invested in Regional areas. The prospectus gives a breakdown of investments into geographical areas, industry types and security types. They include real estate, motor vehicles, plant and machinery over forty-odd industries.

On the subject of the prospectus, I would like to make two observations. Firstly, the amount of bureaucratic, inconsistent, expensive, red tape required to issue a prospectus is extraordinary, and must be a barrier to the attraction of capital to regional areas.

Secondly, the $13 million invested so far is all from country based business people, nearly all of whom who are personally known to our directors. One wonders why so called independent financial planners fail to analyse the prospectus but recommend investments with higher commission structures.

Q 3. Regionalbusiness.com.au Where do you see growth or opportunities in Regional Australia?

Short answer is – everywhere. From a RivWest point of view we will continue to expand our portfolio of investments in regional small businesses and where appropriate, obtain funding from other financiers for our customers if it means a better deal for them.

From a broader perspective I see a heavier emphasis on capital is needed. If we agree all economic activity requires both labour and capital, then the emphasis now is on labour. For example projects are all too often assessed on the number of jobs it will create. But we already have full employment; we need to concentrate on the type of jobs we wish to create.

Let me give you one example (there are maybe 20 more if you have the time). There have been new police stations, and ambulance stations and fire stations underway recently in Dubbo. Let’s say the people of Dubbo got together, formed a property trust and built the building and rented it back to the state government. What’s the result? A couple of million in rent stays in Dubbo.

Jobs created are architects, accountants, and environmental scientists etc who will breed and/or demand doctors, radiographers and the like, as well as sustain sporting, educational and cultural facilities.

Previously such opportunities failed for want of underwriters. We now have them in regional areas. All that’s needed is the political resolve to give preference for the lease of government premises to local landlords.

Q 4. Regionalbusiness.com.au What do you love about Regional Australia from an investment and risk aspect?

At the end of the day, we are lending and investing, to and from, country people. Not all, but most, country people are what I call honourable people. Their word is their bond. It’s a privilege to be able to assist and work with such people.

Q.5 Regionalbusiness.com.au What shifts have you seen occurring in regards to financing and regional businesses?

There are many changes since we started some ten years ago. Certainly the attitude and understanding of the major banks has increased substantially. The competitiveness of the industry has also increased, particularly with the number of retail consumer lenders. Along with them have come the home loan mortgage brokers.

I’m sure everyone is aware of the rise in the availability of credit. I heard the other day from one of our suppliers that 70 per cent of every transaction in Australia (both goods and services) over $2000 is financed. That’s a worry.

One thing I’ve noticed is that it will take more than the worst drought ever to take country people down. Prosperity will return to regional areas, but will we be smart enough to reap the benefits or will we export them to the cities again?

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Juliet Duffy is the Managing Director of Wireless Marketing Pty Ltd and can be contacted on (02) 6885 5361 or by email on juliet@wirelessmarketing.com.au