Credit unions risk major climate-related losses

A report by the Filene Research Institute and Ceres Accelerator for Sustainable Capital Markets suggests more than 60% of credit unions risk climate-related losses. These credit unions represent over $1.2T in assets.

Why should we care?
Credit unions often function as a financial first responder for communities affected by natural disasters, offering loans with low interest rates, lines of credit, and other favorable services. To Jessica Johnson, Assistant Vice President of Risk Management at Numerica Credit Union in Spokane Valley, WA, credit unions have an obligation to create as resilient infrastructure as possible in the face of climate risks. Numerica has previously had to close branches to protect its employees from wildfires, which prevents disaster-impacted clients from getting help during those periods. "Our members have been impacted by losses of their homes or even losses of their crops or their businesses, and us ourselves," she said. She sees digitization as one way to mitigate climate risks, letting members access necessary services during the potential closure of a branch. Credit unions and other financial institutions can do much more than move online to minimize the damages of climate change: financing climate risk mitigation projects, for instance, or divesting from fossil-fuel projects. As climate change’s effects become increasingly acute, we should expect credit unions on the front lines, both damaged and leading finance’s response.