First look inward at your own operations, then look around.
Financial institutions have a vital role in expediting to play in the shift to a green economy. Credit unions, with their strong ties to members and local communities, are uniquely positioned to drive positive change and enhance their reputations as outstanding corporate citizens. Financial cooperatives can make an impact through three main avenues: assessing the environmental footprint of their operations, evaluating their investments and lending practices, and engaging with stakeholders.
Looking Inward: Operational Environmental Footprint
How do your operations and value chain support a green economy? Are there actions you are taking or could be taking to increase your positive impact? Start small, think big, and engage your employees in the process. Look for opportunities to:
- Reduce energy use or power your operations with renewable energy
- Reduce paper waste (digitization, recycling)
- Reduce water use
- Use sustainable cleaning products
- Manage electronic waste (recycling)
- Reduce energy use
- Build/Upgrade buildings to be more efficient
- Encourage employees to bike, walk or use public transit to commute to work
You Are What You Manage: Your Investments and Lending Activities
Money is powerful. We need innovation to transition to a green economy, and innovation takes resources. Financial institutions decide where to allocate funds, what types of projects they will support, and what lending criteria will be applied. Credit unions are uniquely positioned to help mobilize capital in support of such green and circular initiatives as:
- Technology/products: Technological advances will be a vital function in the transition to a clean economy, and credit unions can support companies that are bringing green these innovative products to market.
- Small and medium-sized businesses: SMEs are the heart and soul of local communities and can and should play a critical role in the transition to a green economy. The green economy will require numerous grassroots, local and community-based solutions, and credit unions are well-positioned to support this kind of action.
- Creating innovative financial instruments: Credit unions are already supporting their members in aligning their finances with sustainability goals, whether through innovative lending, responsible investing, or green savings accounts. Think outside the box. Think outside the bank. Think outside, period. Your brain works better out in nature! Examples:
- Vancity, a credit union with more than $30 billion in assets in Vancouver, British Columbia offers socially responsible mutual funds that screen for good environmental, social, and governance practices as well as avoid investments in six industries it considers harmful
- Much smaller in asset size, NBTA Credit Union, Fredericton, New Brunswick, offers greener home loans with preferred rates to those who are upgrading their homes using more efficient technology (e.g. insulation improvements, heat pumps, solar technology, high-efficiency appliances)
- At $5.4 billion Libro Credit Union, London, Ontario, all new mutual fund accounts will use exclusively responsible investments, through a partnership with Northwest and Ethical Investments.
- At Advance Savings Credit Union, Moncton, New Brunswick, the Keep-it-Green Checking account’s service charge is donated to a local environmental network.
Look Around: Relationships
As credit unions, you have deep roots and strong relationships in your communities, which enables you to foster the collaboration and partnerships needed to build a green economy. Through your ability to connect people and drive action, you can help make a positive impact on the environment. Opportunities for engaging stakeholders (both internal and external) include:
- Leading by example: Create good governance practices and model them for your employees and members. Help spread the word; talk about what you are doing and why it is important. Inspire others and create ripple effects by being a leader in the field.
- Educating stakeholders on risks and opportunities in the green economy: Invest in training and education (workshops, webinars, whitepapers, etc.) for your employees and members to give them the tools they need to identify risks and opportunities related to the green economy.
- Building action-oriented partnerships: Seek out opportunities for collaboration and engagement, such as the United in Sustainability Summit hosted by $7.5 billion United Nations Federal Credit Union, New York, or the Climate Action Working Group of the Canadian Credit Union Association. The latter was established to examine climate-related financial disclosure issues and raise awareness of climate risks, public policy implications, and leading frameworks for climate disclosure. Many credit unions and financial institutions worldwide have joined the Net Zero Banking Alliance, an industry-led, UN-convened initiative that brings together banks that are committed to aligning their lending and investment portfolios with net-zero emissions by 2050.
Given the diversity among credit unions and the complexity of the issues surrounding the transition to a green economy, there is no one-size-fits-all approach. Whatever actions you decide to take, be transparent. Looking for more guidance on where to start? There are lots of great resources to guide you, including:
- The Changing Climate for Credit Unions report from Ceres offers valuable insights for credit unions on how to respond to the climate crisis, mitigate risks, and become part of the solution
- UNEP FI provides a wealth of information and research that supports financial institutions in enabling the transition to a low-carbon, resource-efficient and socially inclusive economy.
- A guide to North American and International ESG and Climate Disclosure frameworks
- A framework with recommendations to help organizations effectively disclose climate-related risks and opportunities by the Task Force on Climate-related Financial Disclosure