The Changing Climate For Credit Unions

Seven steps to protect your credit union’s balance sheet and membership from increasing climate risks.


By Ceres


Credit unions are at the heart of U.S. communities. Serving more than 130 million people and representing over $2 trillion in assets, these non-profit financial cooperatives are built around the needs of their members. Which is why, as a systemically important part of the consumer finance system, so many credit unions operate in underserved and vulnerable communities. Unfortunately, these are the same communities that are more likely to be severely affected by climate disasters. And those risks are reflected in the balance sheets of the credit unions that serve those communities.  For example:  

  • More than 60% of all credit unions — representing at least $1.2 trillion in assets — are subject to physical risk from climate change.  
  • Federally chartered credit unions representing more than $141 billion in assets face a high degree of transition risk based on Field of Membership. 

Yet, it’s these very risks that represent immense opportunity for innovation and leadership, as well as responsibility.  

So, what steps can credit unions take to prepare and act on the risks of climate change and opportunities of the shift to a vibrant, net zero emissions economy? 

Earlier this year, I had the opportunity to partner with Filene Research Institute to write a first-of-its-kind report, The Changing Climate for Credit Unions, that outlines how credit unions can respond to climate risk, develop sustainability solutions, and differentiate themselves as leaders in the industry. The report offers seven practical and actionable steps credit unions can take to address climate risk: 

  • First, with the goal of mobilizing your employees, customers and other stakeholders, we respectfully recommend that credit unions publicly acknowledge that climate change poses a risk to their balance sheets and their members.    
  • Second, credit unions should start to conduct research so they can “move up the learning curve” quickly on this important and evolving topic.    
  • Third, similar to our research recommendation, you should start collecting climate-relevant data for your organization – after all, you can only manage what you can measure.    
  • Fourth, kickstart your climate-related strategic planning and disclosure efforts by leveraging publicly available, free standards and frameworks (such as the Taskforce on Climate-Related Financial Disclosure’s TCFD framework, which was developed by business for business and is becoming the gold standard that is being used by governments and banks around the world).   
  • Fifth, conduct climate-specific scenario analysis on your loan book to help you identify and protect against any “black swans” lurking in your asset portfolio.  
  • Sixth, invest in talent across your entire organization, to onboard as much climate-relevant expertise into your credit union.  
  • Seventh, make sure to leverage your state and federal regulators, and national association resources in the fight against climate risk. 
  • And last but not least, credit unions that take these steps and are "climate-risk prepared" will have a competitive advantage as green lending programs continue to experience strong demand. 

Credit unions are uniquely positioned to build resiliency in their communities across the country, and there are significant opportunities for credit unions to grow by investing in sustainability-based products and services for their membership. Take the first steps toward mitigating your risks and opening your doors to opportunity by downloading our report.

Interested in continuing the conversation? Feel free to reach out to me at with any thoughts, comments, or questions. 

Jim Scott is the Senior Advisor for Financial Institutions at the Ceres Accelerator for Sustainable Capital Markets at Ceres.



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Aug. 22, 2022



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