Vancity Announces 2025 Financed Emissions Reduction Targets
Vancity is the first financial institution in Canada to set real estate emission reductions targets
Wednesday, June 29, 2022, Territories of Musqueam, Squamish and Tsleil-Waututh Nations/Vancouver B.C. – Vancity today took an important next step on its commitment to becoming net-zero by 2040 by releasing the emissions reductions it plans to make between now and the end of 2025.
Vancity is the first Canadian financial institution to set reduction targets for financed emissions in commercial and residential real estate under the target setting guidelines of the UN Net Zero Banking Alliance (NZBA) and is taking a rigorous approach to climate science-aligned target-setting. The credit union’s 2025 target is five years ahead of requirements from the NZBA for banking institutions to set absolute and/or sector specific emissions intensity scenario-based intermediate targets.
The credit union has measured and disclosed the emissions in its loan and investment portfolio for the past two years using the Partnership for Carbon Accounting Financials’ (PCAF) robust methodology, to inform its approach to achieving net-zero by 2040.
Vancity does not lend to or invest in oil or gas or to many of the carbon-intensive industries that are the focus of efforts by others in setting interim climate targets. The credit union’s 2025 absolute-reduction targets cover the two main sources of financed emissions in its lending portfolio: residential buildings, and commercial service buildings. The credit union has also set an engagement target for operational business loans. The targets are as follows:
-
Real Estate Targets
For residential and commercial buildings, which cover 81% of the lending on Vancity’s balance sheet, the credit union is targeting the following by 2025:
- 1. A 17 per cent reduction in absolute financed emissions for residential buildings by 2025 from a 2019 base year.
- 2. A 27 per cent reduction in absolute financed emissions for commercial real estate service buildings by 2025 from a 2019 base year.
-
Operational Business Loan Targets
Action on Vancity’s operational business loans, which account for a sizeable portion of its financed emissions, is also needed. But given the relatively small size of this portion of its portfolio, and the limited and often low-quality data currently available, Vancity determined that an engagement target is more suitable than an absolute emissions reduction target for operational business loans at this time. The credit union has therefore set the following engagement target for its operational business loan portfolio:
Over the next year Vancity will engage with its business members that have lending to support them to reduce their emissions, specifically:
- 1. By the end of June 2023, Vancity will proactively connect with a majority of business members in five high emitting sectors to provide resources to measure and disclose their emissions.
- 2. Businesses in high-emitting sectors seeking new loans over $750K will need to provide data on their emissions. Those with significant actual emissions will be supported to develop a Climate Transition Plan.
- 3. By the end of June 2023, Vancity will also have engaged with at least 15 members with existing lending and high emissions to develop a Climate Transition Plan.
Vancity’s interim targets are focused on absolute emissions reductions that decrease the total quantity of GHGs emitted into the atmosphere. The aim of these targets is to drive overall emissions reductions and enable the credit union to grow in a way that aligns with its net-zero goal and commitment to finance a just transition.
“The climate crisis is one of the defining issues of our time and will impact all of our members and communities,” said Jonathan Fowlie, Vancity’s Chief External Relations Officer who oversees the credit union’s impact and climate areas. “Our interim targets are ambitious, but this is the pace of change we think is required to address the current climate emergency.”
Vancity’s strategy for delivering on its 2025 interim and 2040 net-zero targets will require a combination of the following:
- Engaging with Vancity members to support the emissions reductions they want to achieve in their lives and businesses.
- Engaging with officials and policymakers at every level of government to share learnings and advance policies critical to achieving emissions reductions in ways that are affordable, equitable, and improve the well-being of people and communities.
- Growing Vancity’s lending in lower-emitting assets and businesses.
Vancity’s work on climate action is focused on 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.
“As imperative as it is to take urgent action to address the climate emergency and transition to a net-zero economy, how we get there and who’s included in the journey is just as important,” said Anita Braha, Chair, Vancity Board of Directors. “Our path to net-zero is driven by our people-centred values. Our targets won’t be easy to reach, but together with our members, we can create a better world that works for more people.”
More information on how Vancity set these targets and its financed emissions-accounting methodology can be found online at: https://rethink.vancity.com/climate-action/net-zero-interim-targets
Supporting Information
- Vancity offers Planet-Wise Renovation Solutions to encourage energy‑efficient and climate‑friendly retrofits at incentivized rates for Vancity members.
- Vancity’s Non-Profit Housing Retrofit Program provides grants of up to $80,000 for non-profit housing providers across BC to help them improve the energy efficiency, reduce carbon emissions, and boost the overall sustainability of the province’s affordable housing stock.
- The Planet-Wise Climate Business Guide for Climate Action supports small businesses in transitioning to a low-carbon economy.
- Vancity’s free Home Energy Advice service provides personalized guidance to help its members navigate all aspects of home energy upgrades.
- In April 2021, Vancity became the first Canadian financial institution to join the Net-Zero Banking Alliance.
- Vancity set a commitment to be net-zero by 2040 across all mortgages and loans.
- In 2019, the credit union signed the Global Alliance for Banking on Values’ Climate Change Commitment and joined the Partnership for Carbon Accounting Financials (PCAF), committing to measure and disclose the climate impact of its loans and investments. It has disclosed emissions for 2020 and 2021.
- Vancity is a signatory to the United Nations Environment Programme Finance Initiative’s (UNEP FI) Collective Commitment to Climate Action, which requires signatories to set and publish targets for aligning their portfolios to strive for a 1.5 degree Celsius trajectory, based on scientifically established climate scenarios.
- Vancity’s President and CEO, Christine Bergeron, represents North America on the UNEP FI’s Banking Board.
About Vancity
Vancity is a values-based financial co-operative serving the needs of its more than 560,000 member-owners and their communities, with offices and 54 branches located in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay, within the territories of the Coast Salish and Kwakwaka’wakw people. With $33 billion in assets plus assets under administration, Vancity is Canada’s largest community credit union. Vancity uses its assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.
For more information, please visit https://rethink.vancity.com/climate-action/net-zero-interim-targets