I had the honor to represent Coastal Enterprises (CEI) on the panel “Investing in Climate Solutions for the Environment and the Economy” at the Opportunity Finance Network (OFN) Conference, November 12, 2020. The other panelists were Trenton Allen, Managing Director and CEO, Sustainable Capital Advisors; and Cathie Mahon, President and CEO, Inclusiv, the federation of community development credit unions. Dana Lanza, CEO, Confluence Philanthropy joined us as moderator. OFN is the national association of Community Development Financial Institutions (CDFIs).
The panel sought to further climate positive finance to CDFIs. The premise was that a growing movement is pushing for a future-looking economy: one that takes the urgent challenges of a highly inequitable economy and a changing climate as a charge for audacious action.
“Climate positive investment is a powerful tool for addressing climate change and creating jobs, community resiliency, and energy affordability and reliability, especially for communities of color, Native communities and others that are under-resourced and left behind.”
My fellow panelists explained that climate is a top priority and that CDFIs have an important role. Dana moderated the panel and emphasized the important work of decarbonizing financial lending and convening investors and managers to highlight best practices and build momentum for net zero opportunities. Trenton provided an overview of the urgency of climate action and the various types of capital required. He described the important role of CDFIs as debt providers that can help make projects happen by filling gaps and connecting communities to resources and especially ensuring that climate action is taken equitably. Cathie described the work that Inclusiv undertakes to scale up clean energy investment by community finance institutions, including a collaboration funded by the US Department of Energy and led by the Carsey Institute at the University of New Hampshire, CEI and Inclusive Prosperity Capital. Inclusiv’s network is providing critical training and support, building collaborative infrastructure and building a clean energy and resilience movement.
This work is a priority for us in Maine. In 2018, Maine spent $4.4 billion on fossil fuels that came from out of state, mostly for transportation and home heating. That’s roughly half of the entire budget for the state of Maine. Maine is the most rural state in the country with a more dispersed population and notoriously cold winters. Rural Mainers don’t have a choice about whether or not to heat their homes or travel longer distances to their jobs. Volatile energy and fuel costs disproportionally affect rural residents and people with low incomes, who also bear the brunt of the negative impacts of climate change. Clean energy investments, while benefiting all Mainers, especially help the most vulnerable by reducing/stabilizing expenses and contributing to positive climate action, in addition to supporting the creation of good quality jobs, one of my organization’s strategic priorities.
CEI is developing solutions to support a clean energy economy that benefits people and communities with low incomes and helps us do our part to take climate action. CEI is a Maine-based CDFI that combines financing, business and industry expertise, and policy solutions to support the creation of good quality jobs, environmentally sustainable enterprises and more broadly shared prosperity. Our roots are in the Civil Rights movement and grew from there to organizing and supporting rural businesses, initially largely in Maine’s natural resource industries of farming, fishing and forestry. The rural people in these industries were often disconnected from markets and basic resources to start or
grow their businesses. It was clear early on that the future of these industries depended on sustainable use of Maine’s natural resources, and CEI has been on a journey ever since to determine how best to support these industries and their sustainability.
For example, CEI helped launch Maine’s aquaculture industry in the late 1970s. It’s an industry we’re still engaged with as an investor, lender and technical assistance provider, primarily with shellfish and sea vegetable growers and processors. An exciting element of this industry is that the science has shown there to be many climate and other environmental benefits of shellfish and sea vegetable aquaculture. Similar opportunities exist in agriculture, which can help mitigate greenhouse gas emissions.
During the panel, I shared CEI’s story about investing in climate positive projects in Maine, including an example of municipal solar array in rural Maine that will power all of the town’s municipal buildings and demonstrates the contagious nature of clean energy. I also shared CEI’s participation in the network that developed the Platform for Carbon Accounting Financials (PCAF), which will allow us to understand the carbon exposure of our loan portfolio. In tandem with our own greenhouse gas inventory, which we’ve completed for the past three years, we are identifying how we can have the greatest impact with the tools we have.
In closing, I shared a vision for funders to recognize the role and power of CDFIs. There are 1,100 CDFIs across the country, mostly place-based organizations who can tailor their services to the needs of their communities, especially frontline and low-income communities who would benefit the most. But many CDFIs have not yet engaged with what we think of as climate-positive finance and will need help and support. And we will need connections to funding, since our industry is not generally on the radar of foundations supporting climate change action, even though CDFIs support the people, businesses and projects that build greater resilience to the acute and chronic stresses that climate change induces.
In addition to building our field’s knowledge and capacity for climate-positive finance, we need to invest in policy advocacy to ensure that local solutions can be scaled up and have broader impact. If and when federal climate policy is developed, the voice of CDFIs needs to be at the table. One of my dreams is that, when the new presidential administration develops its climate action plan and determines how to make it equitable, one of their first calls is to Lisa Mensah, CEO of OFN, asking for our help.
The 2020 OFN Conference wrestled with the major challenges of our time in a way that few have—racial inequality, economic devastation, and the COVID-19 pandemic, as well as climate crisis. This year, OFN is offering access to all conference sessions and materials free of charge so that all may share in the insights, models, and debate and be inspired by the calls to action. The recorded plenary and breakout sessions and accompanying materials may be accessed through the Conference website.
This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. Historical performance is not indicative of any specific investment or future results.
- Keith Bison, President, Coastal Enterprises, Inc.
