This is the question I’d get most often from my friends and family when I told them the internship for the Economics for the Anthropocene project was with my local credit union. Anecdotally, it seems like the idea that service industries are virtually free of ecological impacts is widespread. With no disparagement intended, let’s call this the linear, siloed, a-physical understanding of the economy.
I get it. A bank is a bunch of people sitting in an office on their computers, meeting with clients, moving money around. Where would the environmental impact worthy of my internship occur? The confusion deepens when you consider that the credit union is governed by one-member-one-vote democratic rule, and they are a certified B Corp. This is a third-party certification that guarantees a business treats its employees, community, and environment well.
Let’s unpack some of these ideas.
First, Ecological Economics reminds us that all economic activity requires energy and material inputs from the environment, and produces wastes that must flow back into the environment. In the case of a credit union, these are flows of electricity, natural gas, transportation fuel, equipment and paper in, and flows of sewage, garbage, recycling, combustion exhaust, and stormwater off their properties out. All of these flows have ecological impacts, and while traditionally we’d assign most of the responsibility for these flows to other sectors, the credit union has agency in reducing them. I believe that creates responsibility.
Second, where the money goes in an economy matters, and banks, other financial institutions, and investors are the ones who make the majority of these decisions. Credit unions control relatively little money, but they can still choose to whom to provide a loan. It is also about creating a culture shift. Credit unions can change the factors they consider when evaluating credit-worthiness, and the conditions they attach to the loans they give.
Third, as we look to build a new just and Earth-friendly economy, we need to look deep for the real solutions. Credit unions and co-operatives are as diverse as their publicly-traded corporate counterparts in their behaviour. A review of the literature on co-operatives indicates there is potential for strong ecological performance in co-operatives, but no guarantee. The B Corp certification is similar. This credit union had a very high score in the B Corp certification, but a weak score in the environment category.
So here’s my vision for an Earth-friendly credit union. It starts with Goal Setting and Impact Reduction. It continues with Deep Employee Engagement and Product Integration. The last step is Moving Beyond Less Bad.
Goal Setting and Impact Reduction
This all begins with an inventory of ecological impacts, which can be surprising. For greenhouse gas emissions, while energy use for heating buildings was the largest chunk, reimbursed travel by employees by personal vehicle made up a quarter of the emissions, and the lifecycle emissions of the paper the credit union uses was at least 5% of total emissions. The emissions from employees commuting to work would have added another 50% to the emissions inventory.
An Earth-friendly credit union needs goals that address their ecological impacts to guide their decision making. In the tradition of Ecological Economics, these goals must be grounded in the scientific understanding of the problem at hand. For climate change, that means goals match the scale and speed of change required to mitigate climate change. Consider:
Become credit neutral in 5 years
Reduce actual emissions by 60% in 10 years
Become carbon free by 2040
The first relies on carbon offsets, an imperfect solution, to demonstrate a commitment. The second requires significant infrastructure investment in new heating systems and alternative transportation. The last acknowledges the need to eliminate fossil fuel use in the next couple of decades. Other goals on water consumption reduction, on-site stormwater management to improve water quality and reduce regional flooding risk, and waste reduction are also necessary.
Deep Employee Engagement and Product Integration
The transition to a just and Earth-friendly economy requires a culture shift. Employers can offer incentives to change behaviour, use the community of a workplace to spread ideas and encourage people to make different choices. Credit unions are also community hubs, places that people visit frequently. This can be leveraged to change member’s behaviour. Product integration is also key: offering free energy audits of a house when issuing a mortgage provided action is taken to reduce energy use, or connecting members with a diverse set of investment opportunities that aren’t reliant on Canada’s natural resource and energy sector.
Moving Beyond Less Bad
Moving Beyond Less Bad is the hardest, but most important part. This is about changing how we think about and relate to our ecosystems, understanding that we are a part of them, and have a responsibility to them. I think this could start with using landscape features around the credit union branches not just as sources of beauty, but as habitat for bees and butterflies. Ultimately this stage requires deep conversations with employees, community members, and representatives for the non-human members of local ecosystems to understand these relationships more deeply.
As the ecological challenges we are facing get more and more severe, let’s all take the time to understand our agency – as members of ecosystems, workplaces, communities, and political cultures – and use it to create change.