Vancouver, 14 June, 2023 – Credit unions have an essential role to play as financial system stakeholders mobilize to promote sustainability while mitigating the risks of climate change and extreme weather events. A new guide offers actionable steps and strategies for credit unions addressing climate risk and protecting the financial savings of their members.

Published by the Canada Climate Law Initiative (CCLI) and the Canadian Credit Union Association (CCUA), the guide offers much-needed direction to the boards of directors of credit unions.

The guide’s author, Helen Tooze, emphasizes the importance of credit unions developing resilience to climate-related risks. She suggests that credit unions should treat climate governance as a strategic concern within their operations. This involves actively involving their members in identifying, monitoring, and managing climate-related risks to remain financially and operationally robust and better support their members and communities through extreme weather events.

She provides frameworks and expertise to help boards manage climate-related risks and opportunities, and steer their credit unions in the right direction, one step at a time.

Credit unions can play a significant role in helping communities to mitigate and adapt to climate change. Their democratic approach to governance and closer community ties allows credit unions to be better placed than other financial institutions to champion climate governance initiatives.

At the same time, climate change has the potential to significantly impact the safety and soundness of Canada’s credit unions, the communities they serve, and the financial system more broadly.

While certain credit unions operate under federal regulation through the Bank Act, the majority are governed by provincial regulations. As a result, new federal regulations like the Office of the Superintendent of Financial Services’ Guideline B-15 on Climate-Related Risk Management do not generally apply to most credit unions. However, it is expected that provincial regulators will introduce their own guidance or regulations aligning with the OSFI’s Guideline going forward. Due to their size and resources compared to Canada’s banks, credit unions face unique challenges in implementing effective governance of climate risks.

Credit unions in Canada are moving in the right direction when it comes to combatting climate change. For example, Vancity, Canada’s largest credit union, began disclosing its financed emissions in 2020 and by the end of 2021, it reported emissions for 82% of its lending. Other climate-friendly initiatives include NBTA Credit Union in New Brunswick which provides favourable interest rates on loans to individuals who are enhancing their homes’ technology for energy efficiency.

“Canadian credit unions are committed to addressing climate change and creating a sustainable future for their members. We hope this guide will help credit unions of all sizes develop appropriate strategies to address climate risk and identify where there is a need for new skills and innovations when it comes to their operational climate impact, financed emissions, climate governance activities, and disclosure performance”, said Victoria Mainprize, Director, Legal, Policy and Compliance & Assistant General Counsel at CCUA.

Credit unions have numerous opportunities to capitalize on climate-related advancements by offering innovative products and services that assist their members in achieving sustainability objectives. Additionally, they can provide financial support to green initiatives and contribute to the financing of environmentally friendly projects.

Credit union boards that are proactive about climate risks and opportunities, and who are educated about best practices and regulatory compliance will be better positioned to navigate increasing climate risk regulation and champion climate initiatives.

Download the guide here: https://ccli.ubc.ca/wp-content/uploads/2023/06/Canadian-Credit-Unions-and-Effective-Climate-Governance.pdf

Media contact: ccli-info@allard.ubc.ca

About the Canada Climate Law Initiative

The Canada Climate Law Initiative (CCLI) provides businesses and regulators with climate governance guidance so they can make informed decisions toward a net-zero economy. Powered by the nation’s top expertise, we engage with boards of directors and trustees to ensure businesses understand their legal duties with respect to climate change. Our legal research allows us to stay one step ahead in a rapidly transforming policy landscape.

CCLI is supported financially by family foundations, and is established at the University of British Columbia Peter A. Allard School of Law and Osgoode Hall Law School, York University.

About the Canadian Credit Union Association

Canadian Credit Union Association is the national trade association for Canada’s credit unions and caisses populaires outside Quebec. Credit unions offer a full range of retail banking services to over 10 million Canadians. Collectively, Canada’s 207 credit unions are leaders in small business lending and have assets of over $295 billion. To learn more about the credit union difference and find a credit union near you, visit www.ccua.com.