What this means:

A Sustainability Strategy need not be complicated, in fact it may well be counter-productive to over engineer it. Sustainability for Credit Unions will be an area where a relatively small number of key decisions and actions will have an outsized impact.

These key actions and decisions should be aimed at preparing for and responding to the risks and opportunities that the credit union is presented with. In many cases these will be unique to each credit union. Some credit unions may be threatened by coastal flooding, others by job losses locally from the closure of carbon heavy enterprises. However, each challenge may also present opportunity, and credit unions who are best prepared to help their members adapt to climate change may be well rewarded. The first step will be to identify the risks and opportunities unique to your credit union and then to determine the initiatives that will allow you to take action on them.

Having identified the most impactful initiatives and established the key actions required to bring them about, the goal ultimately should be the ability to condense the Sustainability Strategy into a one-page, visual document so that it may be readily understood and adopted by all within the organisation.

In embarking on the development of a Sustainability Strategy, a helpful resource comes from the organisation Simply Sustainable (link in resources below), who describe 7 hallmarks of a robust Sustainability Strategy;

Worked example of a strategy on a page:

A Sustainability Strategy should first clearly describe the ambition of the Credit Union. In 2019, CUDA proposed a common purpose for Irish Credit Unions;

“To promote the financial, social and environmental wellbeing of Credit Union Members and their communities.”

We believe this proposed common purpose remains relevant and would be a good example of an ambition statement for a Sustainability Strategy. We will adopt this for the example below, however, credit unions may wish to adopt any ambition statement which is right for them.

The ambition statement set out above gives us 3 pillars;

1. Financial
2. Social
3. Environmental

These pillars will be the main structure upon which the strategy should be built and for each, the strategy should set out;

• The Targets
• Initiatives complete or underway
• Initiatives to come

So at a very high-level, an example of a Sustainability Strategy for a Credit Union would be;

Did you know?

Sustainability reduces costs and can affect operating profits by up to 60%, according to McKinsey & Company.

Steps that won’t take much effort:

• Appoint a Sustainability Officer who will have overall responsibility for sustainability initiatives within the Credit Union.
• Establish a Sustainability Committee with representatives from the Board and Senior Management to oversee the formulation and implementation of the Sustainability Strategy.
• Discuss the Sustainability Strategy with stakeholders – staff, volunteers, members, during its development to ascertain what they believe will be important to include.

Steps that will have a big impact:

• Consider an ambition statement for the Credit Union that is realistic for the resourcing available. Very ambitious goals like a commitment to Net Zero would be a significant undertaking in terms of initial baseline measuring and then monitoring on an ongoing basis.
• Consider the issues that the Credit Union would like to work on, those that best position the credit union to respond to the risks and opportunities identified. These should then be prioritised based on a materiality assessment. In the early days, focus on issues that will have the biggest impact. Once issues are identified and targets set, set out an action plan to ensure they are achieved.
• Integrate the Sustainability Strategy with the overall business strategy, both must be aligned. Monitoring the achievement of KPIs, oversight of implementation of initiatives and ongoing review should be treated just as they would with the main business strategy.

Watch outs:

When conducting a materiality assessment, consider employing a ‘Double Materiality Assessment’, this will consider both;

1. The Credit Unions impact on the issue (Outward Impact); and
2. The impact of the issue on the Credit Union (Inward Impact).

For example, having an attractive green home improvement loan that facilitates more Members in retrofitting their homes will have a strong outward impact. A government policy change that restricts the sale of diesel cars where these account for a large portion of the car lending portfolio would be a risk that would have a high inward impact.

Resources:

Taskforce on Climate-related Financial Disclosures – Strategy Workshop –

https://assets.bbhub.io/company/sites/60/2022/02/TCFD-Strategy-Workshop.pdf

Simply Sustainable – The Hallmarks of a Robust Sustainability Strategy –

https://simplysustainable.com/insights/the-hallmarks-of-a-robust-sustainability-strategy