New report finds half of all credit union industry assets at risk from climate change

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May 11, 2022, 16:34 ET

BOSTON, May 11, 2022 /PRNewswire/ -- Ceres and the Filene Research Institute have released a new report that finds thousands of U.S credit unions have significant unaddressed risk arising from the climate crisis. This first-of-its-kind analysis provides insights on how credit unions can respond to the climate crisis, mitigate their risks, and become part of a system-wide solution.

The report, The Changing Climate for Credit Unions, finds that more than 60% of all credit unions—and at least $1.2 trillion in credit union assets—are at physical risk from climate change. They face growing risks from extreme weather events including fires, floods, hurricanes, and increased transition risk, such as changes in regulation, technology, as well as legal and reputational risks. The report argues that it is incredibly risky for credit unions to ignore the 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 evolving due to climate change.

There are almost five thousand credit unions throughout the country, serving more than 130 million people and representing over $2 trillion in assets. Credit unions represent a diverse cross-section of U.S. households, and as not-for-profit financial cooperatives, they seek to balance growth with their mission of serving and supporting 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 offers 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, their members, and other stakeholders about climate-related risks and opportunities facing their organizations.
Begin collecting climate-relevant data for their organization.
Adopt the recommendations of the Financial Stability Board's Task Force on Climate-Related Financial Disclosures (TCFD).
Conduct climate scenario analysis of their loan portfolios.
Invest in their organizations while leveraging partnerships and building system-wide resources.
Foster proactive communication among 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 leaders to further discuss the findings and recommendations of the report. Registration is open.

Media Contact: Barbara Grady, [email protected]

Related Link: Original Publication

SOURCE Ceres