Member Perspectives on ESG: Through the Governance Lens

In today’s rapidly evolving sustainability landscape, the role of Environmental, Social, and Governance (ESG) principles in driving financial resilience has never been more vital. The impacts of climate change and socio-economic inequalities have underscored the need for institutions like Innovation Federal Credit Union to take decisive action. A 2023 World Economic Forum report estimates the global cost of climate-related damage will reach $1.7–$3.1 trillion annually by 2050.

ESG policies offer a path to mitigate these impacts by reducing costs associated with infrastructure damage, agricultural losses, and human health challenges. Financial institutions that embrace ESG principles stand to not only minimize risks but also increase profitability, reporting up to 19% higher revenue, lower cost of capital, and stronger member retention. ESG also drives long-term institutional success, making it an essential component of Innovation’s operational ethos.

With this in mind, we recently engaged members and the Saskatchewan general public to assess how ESG initiatives are viewed. The resulting survey and accompanied report shed light on several aspects of the general feeling towards Innovation’s commitment to these principles – and ESG in general. While there were many varying takeaways, one was unmistakably clear: Governance was the most supported and least divisive part for both members and the general public.   

Governance: The Foundation of ESG

Good governance has always been the cornerstone of ESG at Innovation. As a cooperative organization guided by a member-elected Board of Directors, Innovation ensures its Governance framework aligns with all legal, regulatory, and ethical standards. This commitment is further emphasized through alignment with initiatives like the Principles of Responsible Investing (PRI) and the Office of the Superintendent of Financial Institutions (OSFI)’s Climate Risk Management mandates.

Our focus on the importance of the “G” in ESG was corroborated by survey data from members and Saskatchewan residents, as they revealed strong support for governance policies, with 43% rating them as "very important." Respondents particularly highlighted trust, transparency, cybersecurity, and operating in members’ best interest as top priorities. Demographically, Governance policies were also less polarizing compared to Environmental and Social issues. This shared understanding presents an opportunity to foster trust and unify members around Innovation’s strategic goals. I personally believe that implementing ESG-centric governance strengthens organizations and contributes to the health of our planet.

Innovation’s Governance policies and broader ESG strategies are largely shaped by the input of members, with member feedback highlighting the importance of fostering financial literacy and addressing Governance gaps to build trust and confidence.

Member feedback is invaluable to us. It helps uncover needs, close financial literacy gaps, and align our strategies with member priorities. We look forward to continuing to engage our members to guide our efforts.

Governance and ESG: The Path Forward

To maintain a leadership position in sustainable financial services, Innovation is actively working towards further integrating ESG metrics into the cooperative’s financial reporting. This ongoing process of elevating ESG metric tracking from a peripheral consideration to a core component of our operational and strategic framework helps to ensure accountability at every level of the organization.

Furthermore, this approach not only satisfies evolving regulatory mandates but also enhances Innovation’s ability to adapt to the changing demands of sustainability and stakeholder expectations – and a robust Governance framework is central to making this possible. It also enables us to proactively identify and address risks, such as regulatory non-compliance or reputational challenges, strengthening the organization’s resilience in an increasingly complex financial landscape.

Innovation’s fully integrated ESG approach ensures that the benefits of sustainability are shared equitably across our membership and the broader community. We do so with ongoing initiatives to help improve not only Governance, but Environmental and Social metrics, in line with survey responses to specific questions. Members benefit from financial products and services that reflect modern values, such as green loans and investments, while communities gain from initiatives that address social challenges like financial literacy and economic inclusion.

Aligning operations with the most impactful ESG priorities – with Governance top of mind – helps to create a financial system that is not only secure but also equitable and future-focused, allowing Innovation to set a benchmark for responsible banking in the 21st century.

Read Innovation’s report detailing member perspectives on ESG.