U.S. Department of the Treasury

Summary: Convening on Climate-Focused

Community Finance

May 10, 2023

Washington, DC
Event Purpose and Themes

On May 10, 2023, the U.S. Department of the Treasury’s Office of Community and Economic

Development (OCED) and the Community Development Financial Institutions (CDFI) Fund

hosted a convening on climate-focused community finance. Participants primarily included

stakeholders from CDFIs, their partners and investors, and researchers.

Community finance, sometimes called impact investing or socially motivated finance, broadly

refers to investment flows that are intentionally targeted to benefit geographic areas and

demographic populations that are lower income and/or financially underserved. This

convening cast a spotlight on an emerging segment of the broader field of community finance

that focuses on achieving environmental benefits, potentially including reduced carbon

emissions, environmental remediation, climate resilience, decreased energy burdens, and

improved health outcomes, with a focus on lower income and/or financially underserved

communities. 

Federal resources have become available for climate-focused community finance at

unprecedented levels, most notably through the Inflation Reduction Act (IRA). These

resources are acting as a catalyst for both public and private sector efforts to better define

climate-focused community finance, clarify how to measure impact in this space, and identify

best practices. This convening provided an opportunity for federal policy makers to

communicate about their progress in implementing new federal climate-focused community

finance initiatives, and offered practitioners, especially leaders of CDFIs, an opportunity to

provide input to federal policy makers and to engage one another.

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023)

“Through President Biden’s Investing

In America agenda, we are investing

in the people, places, and projects to

build a robust and resilient – clean

energy economy. Organizations that

invest in community-level finance,

like Community Development

Financial Institutions, play a critical

role in making sure that the benefits

of growing a clean energy economy

reach every zip code in America."

Ali Zaidi

National Climate Advisor,

White House

"Financially underserved

communities are disproportionately

impacted by climate change,

including exposures to floods, fires,

hurricanes, and rising sea levels.

CDFIs are an important part of our

financial services system, delivering

financing for clean energy and

climate resiliency projects that help

to address these challenges."

Graham Steele

Assistant Secretary for Financial

Institutions, Treasury Department

2
Noel Poyo, Deputy Assistant Secretary for Community and Economic Development,

Treasury Department

Ali Zaidi, National Climate Advisor, White House

Graham Steele, Assistant Secretary for Financial Institutions, Treasury Department

Seth Hanlon, Deputy Assistant Secretary for Tax and Climate Policy, Treasury

Department

Laurel Blatchford, Chief Implementation Officer for IRA, Treasury Department

Ethan Handelman, Deputy Assistant Secretary for Office of Multifamily Housing,

Department of Housing and Urban Development (HUD)

Dr. Taresa Lawrence , Director of State, Local, and Tribal Policy, Department of

Energy (DOE)

Jahi Wise, Acting Director for the Greenhouse Gas Reduction Fund, Environmental

Protection Agency (EPA)

Ellen Lurie Hoffman, Acting Director of the Office of Community and Economic

Development, Treasury Department

Building an Ecosystem for Climate-Focused Community Finance

Best Practices in Deploying Renewable Energy in Underserved Communities

Developing Data and Benchmarks for Climate-Focused Community Investments

Event Agenda

Wednesday, May 10, 2023

Welcome Remarks

Panel: IRA Climate-Focused Resources for Community Finance

Presentation, Fireside Chat, and Listening Session: Greenhouse Gas Reduction Fund

Remarks from Marcia Sigal, Acting Director, CDFI Fund

Breakout Sessions

The event took place from 8:30 a.m.-12:00 p.m. at Main Treasury in Washington, DC and was

livestreamed until the breakout sessions at 11:00 a.m.

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023) 3
The IRA modified or created more than 20 different tax incentives to support the development of the

American clean energy economy, while lowering costs for families.

The direct pay and transferability provisions expand the reach of many of these incentives to

state, local, and tribal governments, tax-exempt organizations, and other entities that cannot

ordinarily benefit from tax credits.

Other provisions enhance the credits for investments in low-income communities and historic

energy communities.

The Green and Resilient Retrofit Program (GRRP) provides owners of HUD-assisted multifamily

housing with capital resources to reduce carbon emissions, undertake utility efficiency

improvements, incorporate renewable energy sources, and make properties more resilient against

the effects of climate hazards.

Elements awards will fund property owners to include climate resilience and utility efficiency

measures in projects already undergoing a recapitalization transaction.

Leading Edge awards will fund retrofit activities that will achieve an advanced green certification.

Comprehensive awards will fund properties with the highest need for climate resilience and

utility efficiency upgrades, regardless of prior development or environmental retrofit experience.

The Energy Savings Hub is an online one-stop shop for American consumers to access information on

how to save on energy costs.

The Home Efficiency Rebates Program provides formula grants to state energy offices to assist in

whole home upgrades that make it possible for more families to electrify home appliances and get

energy efficient retrofits.

The Home Electrification and Appliance Rebates Program provides formula grants to state energy

offices and grants to Indian Tribes to install efficient electric technologies in low- and moderateincome single family and multi-family homes.

Eligible households can benefit from rebate-funded energy upgrades that can reduce their energy

bills, improve indoor air quality, and heat and cool their homes more efficiently.

The Greenhouse Gas Reduction Fund (GGRF) was authorized to reduce emissions, deliver benefits to

low-income and disadvantaged communities, and mobilize financing and private capital to stimulate

additional deployment.

The GGRF competition structure will include:

A National Clean Investment Fund to catalyze clean technology projects;

A Clean Communities Investment Accelerator to rapidly build the clean financing capacity of

networks of community lenders to finance pollution-reducing projects; and

A Solar for All program to expand access to solar for low-income and disadvantaged

communities.

Presentation Highlights:

U.S. Department of the Treasury

U.S. Department of Housing and Urban Development

U.S. Department of Energy

U.S. Environmental Protection Agency

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023) 4
Building an Ecosystem for Climate-Focused Community Finance

Best Practices in Deploying Renewable Energy in Underserved Communities

Developing Data and Benchmarks for Climate-Focused Community Investments

Insights from Community Finance Practitioners and

Other Stakeholders

After the plenary presentations led by federal officials, participants broke out into three

sessions designed to gather input from stakeholders on the following topics.

The breakout sessions produced meaningful insights related to climate-focused community

finance. Stakeholder comments have been summarized below thematically.

CDFIs Need Greater Access to Capital to Meet the Climate Challenge

Given the scale of the climate challenge, stakeholders identified a need for significant capital

above and beyond what was made available through the IRA. Participants expressed that

Treasury and financial regulators should encourage large financial institutions to increase

access to capital for CDFIs and other mission-lenders. Treasury’s Emergency Capital

Improvement Program (ECIP) was identified as a good model. Stakeholders also emphasized

the need for liquidity solutions including securitization. Participants indicated that regulated

financial institutions and the Federal Home Loan Banks as well as hospitals and health systems

all have a role to play.

Low- and Moderate-Income (LMI) Households Face Disproportionate Energy Cost Burdens

and Experience Practical Challenges When Transitioning to Green Technologies

Participants noted that LMI households face disproportionate energy cost burdens and may

not have the disposable income to cover the upfront costs of infrastructure or energy

improvements. Stakeholders voiced concern that the financial cost of adopting “green”

solutions for LMI households can be a significant barrier and some expressed alarm about

predatory financing activity in this space. Participants recommended properly educating

lenders, LMI communities, and households on potential costs and benefits.

Stakeholders noted that poor infrastructure may be a barrier to the adoption of green

technologies. For example, the installation of solar panels requires that the home have a roof

that is in good condition. Participants noted that decarbonization technologies can actually

increase bills for property owners, especially in underserved areas, so it is important to

monitor costs post-transaction. Further, the ongoing cost of maintenance, such as replacing a

solar panel inverter, may be high and may trigger the need for an electrical inspection,

potentially identifying additional costs. Stakeholders identified the need for capital reserve

funds to help LMI households cover remedies to problems that emerge related to green

technologies.

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023) 5
Insights from Community Finance Practitioners and

Other Stakeholders (continued)

Inconsistent Regulations and Standards Can Complicate Investments

Participants noted that climate-focused investments are subject to widely divergent state

regulations as well as local restrictions from homeowner associations. Stakeholders called for

infrastructure system-wide standards or accreditation for contractors and vendors.

Need to Build Capacity and Information Technology Infrastructure to Support Climate

Investments

Stakeholders noted that building capacity for climate-focused investments through hiring and

cultivating expertise within a CDFI is necessary and often difficult. Participants identified the

need for CDFI early adopters of climate investing to share their experiences and best practices

and that Treasury and the CDFI Fund have a role in supporting capacity building and

highlighting best practices. Stakeholders stressed the importance of standardized technical

assistance resources across the CDFI industry, including for small businesses and contractors. 

Specifically, participants noted the critical need to address the scarcity of electricians in the

workforce. Stakeholders also noted that banks and lenders utilize information technology

systems that require significant investments of capital and time, and smaller financial

institutions, including many Minority Depository Institutions (MDIs), face challenges

implementing these systems at the same speed and scale as larger institutions. Some

indicated that larger institutions working on net zero commitments and transition financing

could extend capacity to smaller institutions, especially on climate-related finance issues.

Need to Standardize Data Collection and Reporting

Participants observed that data collection and benchmarking are important for measuring

impact and that clarity and consistency in data collection and reporting will benefit CDFIs.

Stakeholders identified the CDFI Fund’s annual reporting process as an important

opportunity for collecting and reporting data on climate investments. Participants also

expressed the need for standardization of definitions across the field. Some suggested that

there should be a focus on establishing suitable proxies, calculators or other tools for

measuring climate impact where transaction level data collection may be burdensome or

infeasible. Stakeholders also recommended leveraging technical resource manuals. It was

observed that CDFIs may be more willing to collect and report data if they understand how it

can ultimately support access to capital. Some highlighted the need to customize data

collection requirements depending on the capacity of the entity or the community they serve,

including Native CDFIs.

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023) 6
Resources

1. Inflation Reduction Act of 2022 | Internal Revenue Service (irs.gov)

2. Elective Pay and Transferability | Internal Revenue Service (irs.gov)

3. IRS, Treasury update Notice 2023-29 related to energy community bonus credit amounts

under the Inflation Reduction Act | Internal Revenue Service (irs.gov)

4. Clean Energy Tax Provisions in the Inflation Reduction Act | Clean Energy | The White House

5. August 16, 2022: Treasury Releases Initial Information on Electric Vehicle Tax Credit Under

Newly Enacted Inflation Reduction Act

6. February 13, 2023: Treasury, Energy Release Guidance on Inflation Reduction Act Programs

to Incentivize Investments in Underserved Communities, Hard-Hit Coal Communities

7. March 31, 2023: Treasury Releases Proposed Guidance on New Clean Vehicle Credit to

Lower Costs for Consumers, Build U.S. Industrial Base, Strengthen Supply Chains

8. April 4, 2023: Treasury Releases Guidance to Drive Investment to Coal Communities

9. EPA’s Implementation Framework for the Greenhouse Gas Reduction Fund

10. EPA Greenhouse Gas Reduction Fund: Implementation Framework Supporting

Presentation (May 2023)

11. HUD Green and Resilient Retrofit Program

12. HUD Green and Resilient Retrofit Program Overview

13. May 11, 2023: HUD Announces More than $837 Million from President Biden’s Investing in

America Agenda to Improve Housing Quality and Reduce Energy Costs for Underserved

Communities

U.S. Department of the Treasury - Summary: Convening on Climate-Focused Community Finance (2023) 7