WASHINGTON–Cathie Mahon, president/CEO of Inclusiv, testified before the Senate Climate Change Task Force that CDCUs can play a key role in advancing climate solutions and equity by deploying Greenhouse Gas Reduction Fund resources to the underserved urban, rural, reservation-based, and historically redlined communities, which the Fund is intended to reach.
The $200-billion Greenhouse Gas Reduction Fund (GGRF), which is being overseen by the EPA, is aimed at delivering energy efficiency and solar access for households and small businesses in low-income communities, rural communities and communities of color.
Inclusiv noted that low-income and under-resourced communities have historically been excluded from mainstream climate finance “despite well-documented needs for energy-efficient home improvements, lower utility and fuel costs, and other clean energy solutions.”
‘Responsibility & Opportunity’
Ensuring GGRF funding reaches these communities by investing in CDCUs will not only advance equity but also accelerate greenhouse gas emissions reduction, Inclusiv added.
“Inclusiv was honored to join our allies in the Community Builders of Color Coalition to discuss the transformative potential of the Greenhouse Gas Reduction Fund and the ways community development credit unions can amplify the Fund’s impact,” said Mahon. “Community Development Credit Unions see both a responsibility and opportunity to make their communities greener and more resilient. They often serve the communities located on the frontlines of climate change that have the poorest air quality, highest energy burden and the most vulnerability to climate events like hurricanes, droughts, and wildfires. The Greenhouse Gas Reduction Fund is a critical opportunity to create more equitable environmental, energy and financial outcomes across the country.”
How to Create Desired Outcomes
To create those outcomes, Mahon said it must include an ecosystem:
- Where lenders work to ensure that investment in the clean energy economy is delivered equitably
- Where this network of community lenders connect to a growing marketplace of clean energy contractors, solar installers and community solar businesses by scaling lending platforms
- Where lenders can access capital necessary to grow their lending through GGRF and forge collaborations with state and local agencies
- Where the private sector in the form of corporate treasuries, mainstream financial institutions, mutual funds, asset fund managers and other social impact investors expand investment in the form of social impact deposits, long-term loans, equity and equity-like investments
300 CDCUs Already Making Loans
Mahon said more than 300 CDCUs offer dedicated green loan products, and a small sample of just 30 credit unions have reported a combined investment of almost $1 billion in green projects over the last three years, a figure that will grow significantly once the GGRF is implemented.
As an example, Inclusiv pointed to Tucson Old Pueblo Credit Union, which has provided $25 million in solar loans in just the past year.
“They are one of the largest solar lenders in Tucson and a Community Development Financial Institution, demonstrating credit unions can build a scalable business by financing clean energy projects for low- and moderate-income households,” Inclusiv said.
Mahon’s full testimony can be found here.
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