CFO Focus: Investing for environmental and social impact

FCUs’ portfolio choices are one way to show commitment to environmental and social causes.

Federal credit unions have an inherently strong, socially conscious business model. Demonstrating the many ways that they may positively impact society can address consumers’ growing interest in choosing a financial institution that aligns with their values.

A way that FCUs can demonstrate their positive impact on society is by highlighting the “impact investments” they can make. These investments are designed to support sustainable, environmental and/or social causes.

To promote the safety and soundness of the credit union industry, the National Credit Union Administration prohibits FCUs from readily investing in certain types of non-government securities for their core portfolios—and FCUs generally have a smaller suite of investment options than what is available to banks and state-chartered credit unions. Yet FCUs do still have options for investing in ways that support environmental and social causes. For example, they can also utilize two exceptions to core investment authorities where regulations permit an expansion into other types of investments, including those that support impact causes.


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