May 10 2022
The Changing Climate for Credit Unions
Climate change is one of the most important—if not the most important—challenges of the twenty-first century. Transformational change is necessary to confront and adapt to the increasingly severe impacts of climate change. Credit unions are in unique position to aid in this transformation.
Credit unions are an integral part of the U.S. consumer finance system, offering an important alternative to commercial banks and nonbank financial service providers. As a result, credit unions have an essential role to play as financial system stakeholders mobilize to address climate change and the challenges it creates, and ultimately, as the United States undertakes a transition to a net-zero carbon emission economy.
This research report offers an overview of the implication of climate change for credit unions, and recommendations for more effective climate risk management. It describes the climate-related physical and transition risks facing credit unions, the potential impact of climate change on credit unions, the current state of credit union approaches to climate change, and the opportunities available for credit unions from climate adaptation finance. It also provides concrete recommended actions that individual credit unions can take to begin to measure and mitigate the impacts of climate change on their organizations and the credit union system.
Why It Matters—A Credit Union Perspective
Climate changes affects all of us. As climate-related events accelerate, we can expect outsize impact on our most vulnerable people and communities those that often lack the finances and supporting infrastructure to withstand and recover from these disasters.
"As climate-related events accelerate, we can expect outsize impact on our most vulnerable people and communities."
Now is the time for credit unions to double down on driving equitable financial services in our most vulnerable communities. Experience shows that credit unions most responsive to member needs during or immediately after climate crises are rewarded with member growth, visibility, and loyalty. Preparing now to cushion blows with flexible financing can be critical to the long-term sustainability of the institution and community.
This report offers an overview of the implications of climate change for credit unions, the risks facing credit unions, and the opportunities available for credit unions to adapt their strategies toward advancing climate solutions. Download the report and learn more about your credit union's role in combating climate change.
Filene thanks the following sponsors for helping make this important research possible.
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