Newground Joins Broad Coalition Celebrating MN "Green Bank" as a New National Model
Newground Social Investment has joined a broad coalition of financial reform, labor, democracy, and environmental justice organizations in support of the new Minnesota Climate Innovation Finance Authority (MNCIFA) – an innovative state-run “green bank” that could become a national model for how to finance the critical transition to a clean energy economy.
Below is the full text of the coalition's letter of support, which helped pave the way for Minnesota lawmakers to include this important new financing body in the 2023 state budget. The Climate Reality Project, which authored the letter, is still welcoming organizations to add their support. If your company or organization is interested in joining the coalition, you can sign on here.
Broad Coalition Supports MNCIFA as National Model
We, the undersigned organizations, write to express our strong support for the establishment of the Minnesota Climate Innovation Finance Authority (MNCIFA) – an innovative example of a state-run “green bank” which has positioned itself for substantial support from the Greenhouse Gas Reduction Fund (GGRF) created by the Inflation Reduction Act (IRA).
As the economy has recovered from the COVID-19 pandemic, major flaws have been revealed in the public’s ability to sustain sudden shocks, and supply chain fragility has been a dominant factor in fueling the high inflation experienced during the economic recovery. This has provoked a major shift in how scholars, political leaders, and the public have thought about strengthening our economy and infrastructure to be more resilient against shocks, including the growing hazards from climate change. In addition to the IRA, the 117th Congress also enacted two bipartisan infrastructure packages known as the Infrastructure Investment and Jobs Act (IIJA) and the CHIPS and Science Act. Together, the IIJA, CHIPS, and IRA packages have been hailed as a “rebirth” of industrial policy. How transformative these packages prove for climate and industrial policy largely hinges on how state governments implement certain provisions.
With the MNCIFA, Minnesota has provided an exemplary model of how to carry out climate and industrial policy in a manner that maximizes resources offered by the IRA. The MNCIFA appears likely to shape climate and industrial policy with state direction and input for many years to come, with features that are tailored to fit the industrial policy objectives of the IRA’s Greenhouse Gas Reduction Fund, including:
- Preference is given to projects that utilize project labor agreements.
- Preference is given to projects that maximize use of local workers, including displaced workers at facilities that have been retired, and workers from environmental justice communities.
- Preference is given to projects that utilize domestic manufacturing and technologies that have been produced through advanced manufacturing tax credits.
- Preference is given to projects that certify workers’ right to organize and collectively bargain.
- Projects above $100,000 are required to pay prevailing wage rates to all contractors and subcontractors.
- The statute defines the term “environmental justice community” and requires the MNCIFA to consider and prioritize its environmental justice impact.
- The MNCIFA is given a mandate to “ensure that no less than 40 percent of the direct benefits of authority activities flow to environmental justice communities,” and is held accountable to that mandate through its overall strategic plan.
- Before developing a financing program, the MNCIFA is required to conduct an analysis that ensures that the market is underserved and that the MNCIFA’s activities would advance its goals, including advancing environmental justice.
- Truth in Lending Act.
- Equal Credit Opportunity Act.
- Fair Credit Reporting Act.
- Fair Debt Collection Protection Act.
- A board is created to govern the MNCIFA with a high degree of public accountability. A majority of the board are appointed by the governor, with extensive requirements to consult with labor organizations and other stakeholders to choose members who reflect professional, geographic, and ethnic diversity.
- In order to foster multi-agency coordination, the remaining board members are representatives of state governmental agencies, including commerce, labor, economic development, pollution control, and Indian Affairs.
- To ensure that the MNCIFA is acting in a manner consistent with Minnesota’s long-term climate and economic development goals, the MNCIFA is required to produce an overall strategic plan, update it regularly and submit a comprehensive annual report and financial audit to the governor and legislature.
We applaud Minnesota lawmakers for conceiving of and advancing this transformative proposal. We encourage the Biden Administration, GGRF grant recipients, and other state governments to look to the MNCIFA as a key partner, as well as a model for green banks across the nation.
Americans for Financial Reform
Coalition for Green Capital
Democracy Policy Network
Natural Resources Defense Council
Newground Social Investment
SEIU Healthcare Minnesota & Iowa
The Climate Reality Project
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