DBRS Morningstar Publishes Commentary "Assessing ESG Risks in the Canadian Credit Union Industry"

DBRS Limited (DBRS Morningstar) published a commentary titled “Assessing ESG Risks in the Canadian Credit Union Industry,” which highlights seven Environmental, Social, and Governance (ESG) factors related to the Canadian credit union industry.

Key highlights include

-- The co-operative structure of credit unions incentivizes a low-risk community banking model that has exhibited strong standards related to corporate governance and business ethics.
-- Credit unions have a positive social impact on local economies. They provide financial services in underbanked areas and contribute substantially to social causes.
-- With the exception of Desjardins Group, credit unions have not suffered from serious data privacy and cybersecurity issues.
-- Credit unions have a minimal carbon footprint with little or no direct exposure to the oil and gas industry.

“In DBRS Morningstar's assessment, credit union exposures to ESG risk factors are well managed,” says Sohail Ahmer, Vice President of the Global Financial Institutions Group. “Missteps in managing these factors could have negative implications for a credit union's franchise strength and risk profile, while more serious shortfalls could ultimately damage a credit union's liquidity and funding profile. Furthermore, large credit unions, which typically have stronger franchises, are better positioned to manage potential fallouts from ESG-related missteps.”

Notes:
The commentary is available at www.dbrsmorningstar.com.

For more information on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].

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