Do What’s Right for People and Planet07.29.2020
Credit unions have long embraced cooperative principles to guide their actions. They are the philosophical blueprint credit unions use to serve members and to ensure they’re doing right by and being inclusive of their shareholders.
The for-profit world is coming to terms with “stakeholder capitalism,”—or ensuring operations are orientated to serve the interests of all customers, suppliers, employees, shareholders, and local communities—and environmental, social, and governance (ESG) issues. And credit unions have begun to make those issues a priority as well.
The components of ESG involve:
- Environmental: How an organization helps conserve the natural world.
- Social: An organization’s relationships with its people and communities.
- Governance: How an organization governs in a responsible way.
The 2006 United Nations’ Principles for Responsible Investment report first identified ESG issues. But the pace to commit to ESG has quickened as institutional investors, such as those representing pension funds and endowments, have become increasingly vocal in calling for adherence.
“To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society,” Larry Fink, CEO of BlackRock, the nation’s largest asset manager, wrote in his 2018 annual letter to CEOs.
United Nations Federal Credit Union (UNFCU) is pursuing an agenda to fight climate change, poverty, and inequality.
In its 2019 Impact Report, the $6.1 billion asset credit union in Long Island City, N.Y., notes “our actions, advocacy, and community engagement represent an extension of our mission of ‘serving the people who serve the world.’”
The credit union developed a five-year sustainability action plan in 2015, and by 2019 accomplished seven of its eight goals for 2020. Chief among these was continuing to maintain 100% climate neutrality, even as the credit union experienced record membership growth in 2019.
UNFCU also exceeded its goal of reducing paper use by 25%, with a 46% drop from 2015 to 2019. More than one-third of the conservation was driven by electronic voting for the board, resulting in a cumulative cost savings of $165,000 from 2015 to 2018.
Eighty-two percent of members now receive e-notices and statements.
“With a guiding principle of ‘people helping people,’ sustainability is in credit unions’ DNA. Financial cooperatives, therefore, have a unique opportunity to lead in this space, especially since we prioritize putting the needs of our members first,” says Pamela Agnone, senior vice president of retail services at UNFCU, co-executive sponsor of the UNFCU Global Sustainability Program, and president and director of the UNFCU Foundation.
“Sustainability is an extension of our service mission and another way we provide our members with peace of mind.”
(via CUNA News)