Can Credit Unions Show Community Leadership Through ESG?

As the world struggles with how to react to Environmental, Social and Governance (ESG) risks, and the politics surrounding those risks, many leaders of financial services businesses debate exactly how to respond. Many quickly start to address the Environmental issues because they are tangible and can provide a pathway to near-term solutions.

Others are strengthening Governance practices at the behest of regulators and/or shareholders, especially the Board of Directors. Unfortunately, social issues like diversity, equity and inclusion (DEI) are not attracting the same degree of attention.

However, that is changing thanks to Credit Unions and Credit Union Leadership. Recently, the Northwest Credit Union Association and Northwest Credit Unions Foundation’s DEI Task Force released a report offering guidelines for Credit Unions in addressing Social issues.

Their recommendations include, but are not limited to, assessing current status of community involvement; defining and strategizing DEI initiatives; enhancing training and hiring practices and several more. Recognizing that DEI directly impacts reputation risks for Credit Unions and their management team, these guidelines represent a strong step forward in addressing this risk.

Consideration of the social risks impacting communities today provides Credit Unions with a unique opportunity to enhance community respect, staff moral and long term viability. More importantly, encouraging progress on dealing with the social risks of individual communities will only enhance the entire community experience. Congratulations to the Northwest Credit Union Association and all credit unions everywhere for bringing communities together, focusing on diversity and equality and making the credit union experience rewarding for all of us.

At ZHORSE we support Credit Unions for the entire risk universe including ESG and DEI risks. Visit our website at ZHORSE.net and check out some of our blogs and whitepapers.