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

Report highlights both the challenges and opportunities facing the U.S. credit union industry, and offers a set of clear action steps

MADISON, WI (May 10, 2022) — 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.

“Our report makes clear that thousands of credit unions, and the many underserved communities they serve, have significant and unaddressed risk arising from our rapidly changing climate,” said Steven M. Rothstein, Managing Director of the Ceres Accelerator for Sustainable Capital Markets at Ceres. “There are challenges and opportunities facing the credit union industry, both now and in the future. We hope that every credit union staff member, manager, director, and regulator will use this report and the recommendations we have outlined as a guide to inform their approach to addressing climate risk and protecting the financial savings of their members.”

“For it is only through immediate action that credit unions will become more prepared and benefit from the many growth opportunities in the markets for renewables, electric vehicle equipment, and other new and emerging sustainable technologies,” Rothstein added.

Offering an important alternative to commercial banks and non-bank financial services providers, credit unions are an integral part of the U.S. consumer finance system. There are almost five thousand credit unions throughout the country, serving more than 130 million people and representing over $2 trillion in assets. Furthermore, 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.

Unlike a bank that may have holdings across different industries and geographies, the report also points out that a credit union’s assets would be less diversified due to their field of membership, which is likely more geographically constrained.

“There is a wide range of perspectives among credit unions about how best to prepare for climate change, and climate change may not currently be at the top of the pile of strategic concerns at most credit unions. This report shows that it should be, because climate change poses great risks to credit union balance sheets and offers great opportunities for credit unions to differentiate, grow, and meet emerging consumer demands,” said Taylor Nelms, Senior Director of Research at Filene Research Institute.

“Some credit unions offer strong examples for their peers of how to adapt and turn risk into opportunity. Ultimately, however, the credit union system must tackle climate change together, with a coordinated and collaborative approach that includes developing shared strategies and shared resources so that credit unions of all stripes can meet the profound challenges posed by climate change,” Nelms added.

This report comes as the world’s leading scientists warn that the window to act on the climate crisis is closing. In April, the Intergovernmental Panel on Climate Change stated that we must utilize options in all sectors to cut global greenhouse gas (GHG) emissions by 2030 and limit average temperature rise to no more than 1.5 degrees Celsius. In 2021, the U.S. saw losses of $145 billion in damages and 688 lives last year from extreme weather events. It is estimated that more than 40% of U.S. residents live in counties hit by climate disasters in 2021, and more than 80% experienced a heat wave.

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 noon 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 now open.


About Filene Research Institute

Filene Research Institute strengthens organizations through innovative research and incubation to improve consumer financial well-being. As an independent cooperative finance think tank, Filene’s membership network connects a community of leaders and bright minds to change lives through innovation, truth and cooperation. In addition to delivering cutting-edge, actionable academic research, Filene also provides incubators to test and scale solutions, events to spark organizations into action and advisory services to help accelerate and implement innovation. For more information, visit and @fileneresearch.

About Ceres: Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. The Ceres Accelerator for Sustainable Capital Markets is a center of excellence within Ceres that aims to transform the practices and policies that govern capital markets to reduce the worst financial impacts of the climate crisis. It spurs action on climate change as a systemic financial risk—driving the large-scale behavior and systems change needed to achieve a net-zero emissions economy through key financial actors including investors, banks, and insurers. The Ceres Accelerator also works with corporate boards of directors on improving governance of climate change and other sustainability issues. For more information, visit and and follow @CeresNews.


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