Key takeaways from a powerful conversation about green finance
CDFIs work at the intersection of environmental justice and social, economic, and racial justice. “Green finance,” defined by the UN as an alignment of financial flows to sustainable development priorities, is the CDFI industry’s key tool in the fight against climate change and for the low-income, low-wealth communities disproportionally impacted by its devastation.
At OFN’s 2022 Annual Conference, climate leaders took to the plenary stage. They explored the urgent need for green financing in underinvested communities and the role CDFIs can play leading the way.
Coastal Enterprises, Inc. President Keith Bisson moderated a discussion with Mindy Lubber, CEO and president of Ceres, and Jahi Wise, special assistant to the President for Climate Policy and Finance, White House Office of Domestic Climate Policy, about the role CDFIs play in creating an equitable sustainable future.
Here are some takeaways and highlights.
Green Finance isn’t new to many CDFIs, but the urgency for industrywide expansion is.
- Keith: While CDFIs are no stranger to green finance, current circumstances demand an accelerated response from everyone concerned about environmental justice and a warming planet. We can’t be naive about the challenges, but I’m confident that we have the power to change this trajectory.
- Mindy: If climate change moves at the pace it’s moving, our kids have no future. That means no jobs and no community. There’s no planet B. There’s no second set of human beings… If a bus was coming at our kids in our neighborhoods, we would jump in front of that bus. We’ve got that bus coming at our kids right now, and it’s time to come together to jump. We are one community, and we need to build and integrate sustainability, defined by the environment and social justice, into every part of our economic models as well as into humanity.
Climate change is a social, economic, and racial justice issue.
There is tremendous overlap between communities CDFIs serve and those most impacted by climate change. Climate change hurts low-income, low-wealth communities the most, and these communities must be centered in climate action.
- Mindy: Like so many things, lower-income communities and low-wealth communities just get the raw end of the deal…They get hit, they get imposed upon in ways that are unconscionable. And even when [communities] get resources to rebuild, like [with Hurricane] Katrina and others, it takes longer. The resources don’t come as quickly. And that needs to end, and it needs to end today.
What we need to do is stop separating the environment and justice… They are inextricably one issue. They’re not even tied together, they are one. So, we’ve got to think about them and consider them and act as if they’re one.
Planet-threatening changes need bold solutions.
With Mindy’s experience as a federal regulator and now as a climate advisor to global businesses and investors, and Jahi’s experience in the public sector, the two then took a deep dive into bold government action, including several key initiatives of the Biden-Harris Administration: the Justice40 initiative, Inflation Reduction Act, and Greenhouse Gas Reduction Fund.
- Mindy: … [The Inflation Reduction Act] is a game changer. It is enough money for us to build a green economy that could be about jobs in every community, that could bring greenhouse gas emissions down that are hitting lower-income communities…”
- Jahi: [President Biden]…was very clear that we wouldn’t be able to address climate change without addressing the economic, social, environmental inequality that has underpinned the fossil fuel economy of the last of the last several generations. As part of tackling that people side of the equation, we put in place a number of pieces of infrastructure, one is Justice40 [which sets the table for the Inflation Reduction Act], to make sure that as we tackle the crisis, we actually get the resources to the right places… The Justice40 framing was very intentional: 40% of the benefits of climate and clean energy investments in disadvantaged communities…
As community-based lenders, CDFIs are localized, specialized solutions to a global challenge that can bring green finance to low-income, low-wealth communities.
- Mindy: It’s not about one big coal fire power plant that’s killing our communities, it’s about rebuilding the economy, the health of our citizens, and the money is finally there… We need to be involved and engaged in making sure that 40% of the overall Inflation Reduction Act gets as quickly as possible to the human beings who deserve it… and [CDFIs] can make it happen.
- Jahi: Climate is a global problem. We have to solve for the emissions of our entire planet in order to keep it from warming to a point where it’s uninhabitable. [But local solutions] are the solar panel on someone’s roof… the electric vehicle in their driveway. It’s the quality of the water in their community. These are the ways that folks will actually experience climate. And that’s where I think CDFIs are just incredibly uniquely positioned to advance climate investment.
[CDFIs] know communities better, in many cases, than any other industry. You’ve been there, you’ve helped build, you’ve invested deeply. We need that expertise in the climate movement. We need that really local knowledge in the climate movement, especially at this moment where we have this massive inflow of resources and a mandate to make sure they get to the right communities.
These are just a few highlights from this powerful conversation. Watch the entire plenary to hear more bold ideas and calls to actions for every sector — including CDFIs — around investing in the most urgent issue of our time: justice for the planet and people living on it.