Community Builders of Color Coalition comment on implementation of EPA’s Greenhouse Gas Reduction Fund and propose that minority led CDFIs can meet the demand for green energy funds
Nine BIPOC organizations of the Community Builders of Color Coalition (The Coalition) urge the U.S. Environmental Protection Agency (EPA) to ensure that minority communities can benefit equally from the Greenhouse Gas Reduction Fund (GHGRF) as authorized by the Inflation Reduction Act. The Coalition advocates for equity in all aspects of the GHGRF implementation, and that at least 40% of awarded capital goes to community financial institutions such as CDFIs, MDIs and credit unions.
The Coalition, a group of nine organizations led by the African American Alliance of CDFI CEOs (The Alliance), provides comments in response to EPA’s request for information regarding implementation of the GHGRF. The Coalition urges that effective implementation of GHGRF requires a thorough understanding of underserved communities and the types of clean energy projects they will find most beneficial.
“Climate and environmental effects are not an intangible threat to the U.S. Latino population. A 2021 study cited that 71% of U.S. Hispanic adults say climate change is affecting their local community (vs. 54% of non-Hispanic adults). In considering how EPA Greenhouse Gas Reduction Funds are allocated, there must be a concerted effort to tap organizations that are entrenched in brown and black communities. These organizations are uniquely and best positioned to reach the very populations that are most negatively affected by environmentally detrimental offenses.” – Marla Bilonick President and CEO, National Association for Latino Community Asset Builders.
With their success in deploying critical capital to disadvantaged communities, minority-led Community Development Financial Institutions (CDFIs) are well-positioned to operationalize GHGRF funds for developing green energy projects in communities typically overlooked for climate investments. The GHGRF provides CDFIs with the opportunity to diversify their lending portfolios and meet the demand for clean energy solutions in low-income and disadvantaged communities.
“Minority and underserved communities are often more vulnerable to the harmful impact of climate change. Our banks serve communities that are 77% a minority, providing financial support and access to much-needed resources. As we create a more equitable future, it’s long overdue that financial backing goes to deeply-rooted organizations that have historically served minority communities.” – Nicole Elam Esq., President and CEO of the National Bankers Association.
Additionally, the Coalition strongly recommends that the EPA explicitly make all certified CDFIs, FDIC-insured Minority Depository Institutions (MDIs), and credit union MDIs eligible participants and that the EPA uses an equity lens in implementing GHGRF and prioritize those applications where all members of the coalition are committed to projects that both reduce CO2 emissions and are committed to equity goals. Finally, the funding should be allocated to multiple community financial institutions such as CDFIs, MDIs and credit unions.
“We firmly believe that the best strategy to effectively confront racial inequities and climate change in our country is to ensure local, community-based organizations led by people of color in partnership with organizations such as those represented by this coalition lead the implementation and deployment of the historic levels of capital and federal resources. Collectively, we have the relationship and social infrastructure in place that are necessary to successfully achieve the program goals,” – Seema Agnani, Executive Director, National CAPACD.
The Coalition is comprised of nine member organizations below:
- African American Alliance of CDFI CEOs
- The Chisholm Legacy Project
- National Bankers Association
- Native CDFI Network
- National CAPACD
- National Association for Latino Community Asset Builders
- Oweesta Corporation
- Prosperity Now
“This alliance of Black and Brown led CDFI organizations, collectively serving underrepresented African American, Latino, Native and AAPI entrepreneurs, has not only demonstrated that we are able to come together and work together, but by doing so we are communally best positioned to mitigate outcomes for the communities most impacted by environmental catastrophe caused by greenhouse gases.”- Gary Cunningham, President and CEO, Prosperity Now.
“Green energy solutions are often out of reach for Black communities. The Alliance seeks to level the playing field by working with a coalition that understands the Greenhouse Gas Reduction Fund’s potential to scale climate investments in Black and Brown disadvantaged communities. The Coalition is eager to use its unique expertise to help ensure that the GHGRF will have the greatest possible impact in low-income and disadvantaged communities and ensure it is implemented equitably.” – Lenwood V. Long, Sr., President and CEO, The Alliance.
“As financial cooperatives, CDFI and MDI credit unions design solutions to be responsive to their local economies and to meet the needs of people who have been excluded from the mainstream financial system. Equitable solutions to reduce greenhouse gas emissions must be grounded in scaling local solutions at the national level.” – Cathie Mahon, President and CEO, Inclusiv.
“As place-based peoples, Native communities are on the front lines of climate change, disproportionately feeling its effects more broadly and severely than most other Americans. From California to Louisiana to Arizona to Alaska, increased wildfires, pervasive drought, flooding, ocean acidification, and sea level rise already are devastating tribal economies and ways of life, impacting Native agriculture, hunting and gathering, fisheries, forestry, energy, recreation, and tourism enterprises. It is imperative that EPA’s Greenhouse Gas Reduction Funds allocate adequate funds to tribal governments and Native organizations that are proportional to the vast geographic extent of tribal lands and the gravity of the climate challenges Native communities face.” – Pete Upton, Interim CEO, Native CDFI Network.
About The African American Alliance of CDFI CEOs
The African American Alliance of CDFI CEOs (The Alliance) is a coalition of more than 70 CEOs of Black-led Community Development Financial Institutions (CDFIs), comprising loan funds, credit unions, venture capital firms, and non-profit developers. Since 2018, The Alliance has represented all 50 states and the District of Columbia. As a result, members are uniquely positioned to address issues related to housing and access to capital for African American populations and communities. Learn more about The Alliance and its programs at http://www.aaacdfi.org.