The devastating summer bushfires in Australia in 2020, following years of drought, floods and cyclones, have renewed efforts to tackle climate change at the grassroots.
Australia’s peak body for co-ops and mutuals, BCCM, says it has put this impetus into its strategy, and is urging members to shine a light on their efforts to address global warming and other environmental threats. It also calls on them to work together.
“Environment, social and governance (ESG) is literally baked into co-ops and mutuals in their legal documents,” said CEO Melina Morrison.
“Co-ops and mutuals have been among the leaders in climate positive action – our credit unions, like Community First Credit Union, were among the first to offer green loans (from 2009) to encourage customers to install solar and other renewable technology; and mutual banks like Teachers Mutual Bank have led in divesting from fossil fuel investments.
“Co-operatives and mutuals are the original ESG businesses because they were established to do something different from investor-owned firms. For them, capital is a tool to be deployed, rather than an end in itself.”
She added: “Co-operative and mutual members are also their owners, which represents a huge difference with other types of corporation. It changes how they approach sustainability and business impact.”
Ms Morrison points to ESG as the next mega-trend that will change business over the coming decades. BCCM held a live webcast to discuss the opportunities and the challenges for co-ops and mutuals in addressing climate issues as well as the other dimensions of ESG – especially social impact.
Speaking at the opening of the Global Mutual Leaders’ Symposium, Geoff Summerhayes, a former financial services regulator now working as a sustainability advisor at climate consultancy, Pollination Group, said mutuals and co-ops have a unique role to play in the transition to net zero because “they’re about aligning the purpose with members and communities and they’re most importantly about trust”.
As economies move to net zero, other behaviours – related to social and governance impact – will be under increasing scrutiny.
The decisions of investment funds will increasingly reflect this new order of priorities: consumers are already choosing who they want to do business with, on the basis of their impact.
In response, BCCM and global mutuals advisor Mutuo have developed an ESG project.
“We wanted to examine if the co-operative and mutual business purpose could be an advantage in delivering social and environmental impact and how we fit into the agenda of sustainability,” said Ms Morrison.
“Starting with firms in partnership in Australia, we are reaching out to co-operatives and mutuals across the globe to make the case for our type of business – to learn from one another and to present a more united front.
“Co-ops and mutuals have an interest in engaging with the global organisations developing these standards, in order to have the potential to influence, or at least comprehensively understand the way they are being developed and to position themselves as market leaders.”
The project kicks off in October and BCCM is inviting interest from co-ops and mutuals around the world.