Vancity’s commitment to climate action
The COVID emergency has revealed and worsened many deep inequities that exist in our society. This underscores how a successful response to a global crisis requires rethinking our approach to the economy.
As countries around the world are fighting the pandemic and considering a recovery, a wider and more destructive emergency is building – one that is both human and environmental. Meeting the challenge of the climate crisis will require a transition to the clean and fair economy that Canadians want: an economy that creates prosperity, fights climate change, and leaves no one behind.
With the full endorsement of Vancity’s Board and Executive Leadership Team, Vancity is committing to do our part to help make this happen.
Getting the Climate Transition Right
A successful climate transition requires putting the needs of people and planet first, building community resilience by strengthening local economies, and addressing systemic inequities. And this means doing things differently – as people, as communities, and as societies.
Financial institutions have a critical role to play. This includes changing what they fund, transitioning from emissions-heavy industries in favor of cleaner jobs and industries, and factoring climate risks and social benefits into the assessment of loan requests and investment decisions.
But it starts with people and the options we make available to help them. Today, economic inequality severely impacts climate resilience. If you have financial means and security, you are likely less exposed to the coming climate risks, with better housing and mobility. And you are better positioned to take action to reduce your risks and improve your resilience – for example, climate-proofing your home, retraining if your industry is impacted, or adapting in other ways. You will shoulder less of the burden of the climate crisis, and will be better equipped to handle the impact that does come your way.
The reverse is true for the many people in our societies already on the wrong end of financial inequity. There is ample evidence today that lower-income people are more exposed to climate risks. As a result, if your financial means and security are more limited, you are likely to shoulder more of the burden of the climate crisis, while also being unable to afford to make changes that reduce your climate risks and improve your resilience.
This is how the climate crisis will magnify existing systemic inequities, creating barriers for some and advantages for others. If we allow this to happen, the effort to make a successful climate transition will fail. Everyone must be in a position to make a transition, and financial institutions must use loans, mortgages, investment options, and other products to help achieve this.
Few in Canada understand this better than Vancity. For 75 years we’ve used the tools of finance to reduce economic inequity, broaden access to capital, and build more resilient communities. And for several decades, we've been a leader in the Canadian financial sector, making our operations carbon-neutral, offering environmentally conscious products and socially responsible investment options, transparently reporting on environmental impacts, and supporting sustainability and climate action at the local level.
We have been able to do all this because we are a cooperative, owned and guided by our members. Our members empower us, and provide the pooled resources we need, to address systemic barriers to wellbeing and resilience, and to be a financial force for positive change on their behalf. That’s why putting people first has always been our compass, guiding us through our 75-year history. And it will see us through as we work to address the threat posed by climate change.
Empowering our Members to be a Force for Change
Achieving these commitments will depend on the actions of our members, working together to chart a new common course. Vancity’s primary role will be to enable and empower change through our products, services, resources and influence. By achieving these commitments, we will enable our members to take the actions they need and want to take as part of the climate transition, and will empower our members to be part of a bigger solution.
Bringing our loan portfolio to net-zero by 2040, 10 years ahead of the global target called for by the Intergovernmental Panel on Climate Change (IPCC), is where we can achieve the largest emissions reductions. That means the carbon emitted from anything we finance will be balanced by removing carbon elsewhere in our portfolio. With the bulk of our loan portfolio being mortgages, we will work to help our members to affordably reduce emissions from their homes and businesses. And we will need to work with partners and governments to make systemic changes, such as updates to building codes and zoning, that will enable members to take these actions.
Providing our members with financial solutions to empower their own transition to living more cleanly and sustainably is where we can have the most transformative impact for our members. This would remove economic barriers to climate action and counteract the ways that the climate crisis worsens existing inequities. It will ensure that all our members can do their part, and that no one is left behind, in the transition to a net-zero economy.
Offering our members only responsible investment options follows the same principle, enabling those who invest with us to jointly support the climate transition while safeguarding their own future. Our continued leadership on transparency and accountability will help our members share the journey we are taking together and will amplify our members’ impact by demonstrating to other financial institutions what is possible to achieve. And by ensuring that we live our values and walk our talk we will empower our employees to play a meaningful role in this journey as well.
Navigating in Uncharted Territory
In making these commitments, we are entering uncharted territory – again. When we pledged in 2005 to become climate neutral in our facilities and operations, we didn’t have all the details worked out on how we would do it. But we worked transparently to plan out how we get there, and in the process became the first North American based financial institution to achieve this goal.
We approach our new commitments in the same spirit. In the coming months, we will release the roadmap to meeting our commitments, and the targets for measuring and assessing our progress. We will continue to update members and the public as both planning and execution unfold and evolve. And we will be transparent about all of it, evaluating and reporting publicly.
This time, though, we’re not doing it alone. Governments, large businesses and financial institutions worldwide are finally committing to meaningful climate action because the challenge is so obvious. The evidence is very clear that the world must change course immediately. Plotting a new course will be a collective endeavor, and we will be joined by fellow travelers: some of those will be our teachers, others will follow our lead, and there will be those we can all push to do more.
The biggest asset we bring is our compass: putting people first. As with our COVID response, it guides our climate commitments. Our ultimate goal is to empower our members to make the changes needed so that they are not left behind in the climate transition. Our members’ success will determine ours.
Five years after the Paris Agreement, progress has been insufficient. Stronger action is needed now. Vancity is stepping up to the plate with the following commitments:
Net-zero by 2040
Our ambition is to make Vancity net-zero by 2040 across all our mortgages and loans. That means the carbon emitted from anything we finance will be eliminated or significantly reduced, with any remaining emissions being brought to net-zero. We’ll start this work by setting our first target for 2025.
Financing an equitable climate transition
Unaddressed, climate change – like the pandemic – will change how we work and live, and will drive further inequality. We will focus our work in financial and social inclusion to provide banking and other solutions to help people who are affected by the climate emergency, as well as those seeking support in transitioning to cleaner and more sustainable living.
Investing in a better future
We will help our members invest for the future we need by offering only responsible investment options that can demonstrate the integrity of their Environmental, Social, and Corporate Governance (ESG) screening and stewardship process.
Be transparent and accountable
We will encourage change within the financial services sector by accurately measuring and openly reporting on how our own actions are improving the well-being of people, communities and the environment. We aim to continue implementing, testing, and helping improve emerging international standards for climate and impact reporting.
Walk the talk in all we do
We will live our values in our daily decision-making in order to serve the diverse needs of our members, staff, and communities. We will do our part across our operations to contribute to a just climate transition.
In the wake of the COVID pandemic, it’s clear our lives will change, but will it be for the better? Or will we fail to address the looming climate emergency and allow inequality to deepen by reviving an economy that has been maximizing profit at the cost of both the planet and the people who live on it?