BOSTON, May 11, 2022 /PRNewswire/ — Ceres and the Filene Research Institute have released a new report that finds thousands of US credit unions are at significant unaddressed risk as a result of the climate crisis. This analysis, the first of its kind, provides insight into how credit unions can respond to the climate crisis, mitigate their risks and be part of a system-wide solution.
U.S. credit unions must take immediate action to adapt to climate change and turn climate-related risks into opportunities.
The report, The Changing Climate for Credit Unions, reveals that more than 60% of all credit unions, and at least $1.2 trillion in credit union assets — are physically at risk from climate change. They face increasing risks from extreme weather events, including fires, floods, hurricanes, and increased transition risk, such as changes in regulations, technology, as well as legal and reputational risks. The report argues that it is extremely risky for credit unions to ignore climate threats with 60% of U.S. credit unions physically located in vulnerable locations and with credit unions having $141 billion in assets from high-risk industries that are changing due to climate change.
There are nearly five thousand credit unions nationwide, serving more than 130 million people and representing more than 2 trillion dollars in assets. Credit unions represent a diverse cross-section of American households, and as nonprofit financial cooperatives, they seek to balance growth with their mission to serve and support local and regional communities across the country. Many of these communities are underserved and are already more likely to be severely affected by climate disasters.
The report proposes seven action steps for credit unions to address climate risk. They include:
- Publicly acknowledge that climate change poses a risk to their balance sheet and to their members.
- Conduct research and educate themselves and their members and other stakeholders about the climate-related risks and opportunities facing their organizations.
- Start collecting relevant climate data for their organization.
- Adopt the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) of the Financial Stability Board.
- Perform climate scenario analysis of their loan portfolios.
- Invest in their organizations while leveraging partnerships and building system-wide resources.
- Foster proactive communication between credit unions, national trade associations, state leagues, policymakers, and state and federal regulators.
On Thursday July 28, 12:00 p.m. ET, Ceres and the Filene Research Institute will host a virtual panel of credit union executives to further discuss the report’s findings and recommendations. Registration is open.
Media Contact: Barbara Gradi[email protected]
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