What Does An Environmental Engineer Do In Financial Services?

At Clearwater Credit Union, an unusual hire is forging new ground based on core values and the triple bottom line.

Top-Level Takeaways

  • Paul Herendeen’s background is in environmental engineering; he joined Clearwater Credit Union as its first director of impact market development.
  • Herendeen helps determine what products and services to offer based on triple bottom line principles and member demand.

Paul Herendeen is an environmental engineer who has found a new industry where he can put his training to good use: financial services.

For the past five years, Herendeen has been the first and only director of impact market development at Clearwater Credit Union ($921.0M, Missoula, MT). There, he’s responsible for leading efforts that build the progressive cooperative’s triple bottom line (TBL) of economic, social, and environmental impact.

Clearwater is one of two U.S. credit unions – along with Vermont State Employees Credit Union ($1.1B, Montpelier, VT) – accepted as members of the Global Alliance for Banking on Values, which provides the definition of TBL as a framework for delivering sustainable development in those three areas.

Herendeen reports directly to CEO Jack Lawson, who for the past few years has led the execution of the credit union’s strategic mission to “be a force for good in banking.” Herendeen supports that work by ensuring Clearwater adheres to its four core values of inclusion, empowerment, cooperative ownership, and impact.

“Everyone in the credit union builds their work around this mission and these values,” Herendeen says. “But we needed someone with the time to dig into the question of how to broaden our impact — to read, research, meet people, and, ultimately, help develop products and services that advance our mission.”

Green Lending Research

That someone turned out to be Herendeen, an environmental scientist and engineer with no banking background. Herendeen joined Clearwater from a consultancy where his work included dam design and groundwater chemistry. Before that, he did bioenergy systems work at Colorado State University and spent a few years as a research coordinator with the U.S. Forest Service at its Pacific Northwest Research Station.

During the past several years, Herendeen says, he has honed his research and quantitative skills as well as developed an appreciation for the critical nature of collaboration.

These attributes made him a promising candidate for the position at Clearwater. But something else made him stand out, too.

“I know if I’m confused by something, it’s because that something is confusing, not because I’m not capable,” he says. “That’s a subtle but important point to remember when venturing into new intellectual territory. It helps to have the confidence to say: ‘I didn’t quite follow that, can you explain it again?’”

Herendeen puts his curious and collaborative nature to work every day as he conducts the research and outreach that lays the foundation for Clearwater lenders to build their own relationships.

“Our business lines – consumer, commercial, and real estate lending – are good at what they do and are very busy,” Herendeen says. “The point of my position is to have the time and bandwidth to get out into the community, make connections, do the research, and then work with the business lines to develop products and services to serve unmet needs. I research, then I work closely with the lenders on implementation.”

I know if I’m confused by something, it’s because that something is confusing, not because I’m not capable. It helps to have the confidence to say: ‘I didn’t quite follow that, can you explain it again?’

Paul Herendeen, Director of Impact Market Development, Clearwater Credit Union

Endless Opportunities In Big Sky Country

In Big Sky Country, mining and ranching are being joined by tourists and new permanent residents drawn to the region’s natural attributes. Standing up a green lending business here should be no trouble for Herendeen, who, along with having extensive fieldwork, holds a master’s degree in biological and agricultural engineering from Cornell University. To make matters even better, Herendeen has support at the credit union, too.

“The opportunities are nearly endless,” Herendeen says. “Our board and management completely support our mission, and I have free rein to pursue things that align with it. The challenge is that we’re working on big, long-standing problem. There aren’t any quick fixes.”

That’s not to say the credit union isn’t trying. Three areas of particular focus for Herendeen and Clearwater are energy efficiency, affordable housing, and local food and agriculture. Loans made in connection with the first two already have helped Clearwater book $223 million of TBL loans. Initial steps in food and agriculture work are still underway.

“This is a good example of this kind of impact work,” Herendeen says. “Food and agriculture is an area in which we’re just starting to build experience, and we’ve had a hard time identifying an unmet financial need. We’re reaching out and meeting people, learning the landscape, and trying to find ways to have an impact.”

Clearwater Credit Union is growing rapidly by embracing values-based banking and characteristics of life unique to Big Sky Country. Learn more in “Banking On Values In A Crowded Montana Market.”

Herendeen says he feels lucky to be working on things he finds interesting but believes many people could do his job well, each bringing their own approaches and strengths. However, anyone would need a few core competencies to succeed.

“There are some key elements,” Herendeen says. “First is strong research and analysis skills. These are complicated issues, there’s a lot of information out there – of varying quality – and you need to be able to assess the problem and potential solutions. The ability to think critically, independently, and quantitatively is important.

“Second, you need to be able to communicate clearly,” Herendeen continues. “Good communication to me means the ability to listen to and understand what other people are telling you and distill a complicated topic into an understandable message.

“Finally, you need to be able to work productively with all kinds of people, inside and outside the organization.”

Social impact is difficult, if not impossible, to precisely define and measure. We aim for enough information to make decisions without spending too much energy chasing too much precision.

Paul Herendeen, Director of Impact Market Development, Clearwater Credit Union

Ecosystems Of People And Organizations

Working with all kinds of people, inside and outside the organization, is essential, Herendeen emphasizes. The areas on which he is focusing already have a well-developed ecosystem of people and organizations who have been doing this for years, if not decades

“They’re the real experts,” Herendeen says. “I go to a lot of conferences, buy a lot of coffees, and foster connections with local leaders.”

There’s no shortcut for that kind of relationship development. Herendeen wants people to get to know Clearwater and understand it is dedicated and serious about sustainable development. That’s how he’s helping those outside the credit union see Clearwater in a new light.

“They know we’re a resource for the financial perspective, not just for actual lending, but for ideas and answers to their questions,” Herendeen says.”We’re out in the community and happy to sit down and kick ideas around.”

Clearwater is serious about sustainable development, but determining and defining how much impact Herendeen and Clearwater are having can be elusive.

“On the one hand, it’s important to measure our impact and mission alignment,” he says. “On the other hand, social impact is difficult, if not impossible, to precisely define and measure. You run the risk that the measurement itself becomes the project. We aim for enough information to make decisions without spending too much energy chasing too much precision. It’s a work in progress, and something we’re always trying to improve.”

November 28, 2022

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