Illustration by Chanelle Nibbelink
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How credit unions are pushing a just energy transition

For financial cooperatives, aka credit unions, reaching young people remains a challenge – and a huge opportunity

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Julie Graham didn’t quit her bank in a huff. She had no complaints with the fees or service.

But the Cambridge, Ontario, resident is “constantly evaluating” all her family’s consumer choices, she says. They watch how they shop and invest, but it wasn’t until last year, while attending an online class with financial consultant and podcaster Tim Nash, that Graham started thinking about the environmental and social impacts of the money in her chequing account. “I have been interested in sustainable investing for over 10 years but had never really thought about the money that wasn’t invested,” she says.

Since banks and credit unions lend about 20 times more funds than they hold in deposits, where we choose to bank has ripple effects, like any other consumer choice. While big banks lend to fossil fuel companies and other “sin” industries, money lent by credit unions stays in communities, supporting neighbours and local businesses.

Credit unions are also greener than big banks, with smaller footprints and outsized sustainability initiatives. “Credit unions can utilize their influence to facilitate a just [green energy] transition by supporting their members and local businesses in reducing their emissions,” writes Helen Tooze, a researcher at the University of British Columbia, in a 2023 report. Several credit unions already do this by offering lower-interest-rate loans for energy-efficient home renovations. Other Canadian credit unions, such as Vancity, Coast Capital and southwestern Ontario’s Libro Credit Union, have achieved B Corp certification – a designation that for-profit companies can attain if they meet high social and environmental standards, which no major Canadian consumer bank has attained.

The last time North American credit unions saw a major influx of new customers was on November 5, 2011, when about 40,000 people in the United States reportedly fled their banks to protest a monthly debit card fee at Bank of America. But no mass movement to credit unions exists today, with growth in Canada stagnating despite committing to positive environmental, social and governance practices. The big banks dominate about 90% of financial services in Canada.

It’s usually not that they’re eager to run to a credit union. It’s usually that they are eager to run away from their bank.

—Tim Nash, founder, Good Investing

For the past decade, observers and the industry itself have warned that the main body of credit union members is aging, and the next generation isn’t filling their place at the same rate. When younger people make the switch, it’s because big banks have financial links that don’t reflect their values, such as to fossil fuels, weapons manufacturing and the war in Gaza. “It’s usually not that they’re eager to run to a credit union,” Nash says. “It’s usually that they are eager to run away from their bank.”

A BDO Canada survey of 35 executives and other managers at Canadian credit unions reported expanding their member base as the second top challenge after “optimizing customer experience.”

Some industry publications suggest that the way to attract younger members is with flashy tech and modernization, but others say an analog, feelings-focused message could have a bigger effect. As a group of McKinsey financial services consultants put it in 2024, the trick might be highlighting the “credit unions’ history of commitment to social impact” and tying this to values consumers are trying to live by.

Making the connection

The first North American credit union opened in 1900 and was pioneered by Alphonse Desjardins, a Quebec journalist and stenographer. He wanted to offer working-class families affordable access to credit, combatting rapacious interest rates flogged by other lenders.

Today there are about 400 credit unions in Canada, ranging from large, full-service organizations with flashy marketing and dozens of branches to single outlets with a handful of employees. But in a noisy market full of traditional banks and emerging fintech companies like Wealthsimple, there’s more competition than ever.

“Credit unions do talk about their ESG bona fides,” says Chris Atchison of Shockwave Strategic Communications, a firm that frequently works on accounting and finance ad campaigns. “But they just don’t have the same marketing machines behind them that the big banks do.” The mission for shareholder-owned banks is to earn profit, he points out, so the marketing push is more aggressive than at credit unions, where cooperative-based sustainable growth is the priority. 

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Another challenge is inertia. Most Canadians with traditional banks say they are satisfied with their banks, but Nilesh Kavia of Saskatoon-headquartered Affinity Credit Union says credit union members have higher satisfaction rates. A recent Canadian Credit Union Association survey found that 84% of credit union members rate their financial well-being as good or very good, compared to 78% of non-members. 

Kavia says that family is a key factor influencing the youth market: young people frequently stick with the bank their parents choose for them. And new immigrants, who tend to skew younger, have a “familiarity gap” with the concept of a credit union, he says.

Maria Phillips, marketing director at London, Ontario–headquartered Libro Credit Union, says the bank knows that younger generations want to see themselves reflected in the brands they trust. “That’s why we’ve shifted to featuring real Libro members in our marketing – showcasing the individuals and communities we serve,” she says. 

Success through social purpose

“Credit unions tend to attract an older crowd and – similar to churches – have struggled to redefine their value proposition to a younger generation as our membership ages,” says Sam Herscovitch of Coast Capital, a British Columbia credit union with 52 branches. Coast Capital launched a plan in 2020 to refresh the credit union, which included an additional focus on attracting new millennial and Gen Z members. To achieve this, the financial cooperative shifted to what it calls a “social purpose” business model, which focuses on helping members grow their incomes and financial opportunities. This includes financial education tailored to young clients and offering discounted or free services for students and members under 25. It also includes investing in community employment programs for female newcomers and young people with disabilities. Herscovitch says the efforts are paying off. “In 2024, 52% of new members were under the age of 35.”

For her part, Julie Graham closed her accounts at two other banks and opened a new one at a nearby regional credit union branch. She considers it low-hanging fruit compared to other consumer decisions she tried to align with her family’s values. “It seemed to be a very easy decision to make.” Next up? Setting up accounts for her husband and eventually her daughter, and enjoying the peace of mind that she’s putting her money where her values are.

Rob Csernyik is a freelance journalist specializing in business and investigative reporting, as well as long-form features.

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