Social enterprises, B Corps and businesses with a purpose are all shouting about corporate social responsibility – leaving co-ops increasingly aware of the danger of losing the battle of ideas.
The issue reared its head last December at the World Cooperative Congress, which explored the idea of deepening the co-operative identity.
“This is an issue that is always relevant,” says Jean-Louis Bancel, president of Coop France and Crédit Coopératif. A former president of Cooperatives Europe and board member of the International Cooperative Alliance, Mr Bancel presided over the ICA’s Principles Committee which developed the Guidance Notes on the Cooperative Identity, adopted by the ICA General Assembly in Antalya in 2015.
Since then, several co-operators expressed concerns about the movement’s ability to promote the narrative of the identity. “There was a risk of co-ops being seen as talking a lot and not doing much,” says Mr Bancel. “Banks want to save capitalism, their capitalism, with the idea of a moral, responsible capitalism.”
The movement should not only consider changing the wording of its principles, he thinks, but also aim to prove how these are applied.
The ideas put forward at last month’s Congress will be taken on board by a committee chaired by ICA board member Alexandra Wilson (Canada), who will gather views from the wider co-operative movement. The committee will look at how to ensure the public understands the difference between co-ops and other enterprises. This could take several years, warns Mr Bancel.
Co-ops should also lobby international organisations and national legislators to see that any changes to the values and principles are reflected in laws and recommendations concerning the sector. “We are not legislators so we need to lobby others who are,” he adds.
The ILO’s Recommendation 193 on the Promotion of Cooperatives includes the Statement on the Cooperative Identity in its current form, which makes many in the movement reluctant to change the statement.
“I think the co-op movement is capable of being an initiator,” says Mr Bancel. He explains that should the movement decide to add an eighth principle, it could then lobby the ILO to adopt a new recommendation. Co-operatives have a considerable advantage holding an observer status at the ILO.
But while Mr Bancel thinks issues such as demographic change, digital tech and the climate crisis could influence the future co-op identity, he does not believe working on the principles is as important as communicating what co-ops are.
There is also a danger of co-ops being seen as businesses that sound good on paper but do not work in practice, he fears, especially by young people. The Global Co-op Innovation Summit is one of the initiatives aiming to challenge this. After a series of online events, the Summit will host a hybrid online and in-person event in September 2022 in Paris.
“We aim to prove co-ops are not dinosaurs,” says Mr Bancel, who is helping to plan the event. “If we spend too much time self-examining, others might get ahead of us.”
In France, co-ops must periodically review their mode of operation with regard to respect for the principles, a requirement introduced as part of the Social and Solidarity Economy Law adopted in 2014.
“It is like having your car checked up on a regular basis even when the car works well,” explains Mr Bancel. The requirement was introduced at the suggestion of CoopFr, the national apex for co-ops, which worked with the then minister of the social economy, Benoît Hamon, to develop the new law.
Another way for co-ops to assert their distinctiveness is by using the co-op marque and web domain, says Mr Bancel – although these tools alone do not make an enterprise a co-op.
Legislation can also protect the co-operative identity. Mr Bancel points to countries where the co-operative name is not protected so that enterprises that are not co-ops can use it. “In France this is not possible, the legislation reserves the utilisation of co-operative name to a co-operative enterprise.”
In December, the European Commission (EC) put forward a Social Economy Action Plan, which provides for the first time a clear and inclusive definition of the social economy in Europe while mentioning co-ops and mutual benefit societies as types of social economy organisations.
Mr Bancel thinks this is a first step forward but has reservations regarding recognising the social economy without setting minimum standards. He says the plan should take into account different national contexts and legislations to ensure enterprises, associations and other social economy actors meet certain clearly defined requirements.
He is also concerned that should funding be allocated to the social economy via state aid, public procurement or taxation, false social economy enterprises could be set up to simply secure these benefits.
Nonetheless, he says co-ops must work with other social economy actors. “The co-operative world cannot but support the social economy idea – but not by dilution of the co-op principles. We need allies, we can’t stand alone saying we are the only one to hold the truth.”
He compares the social economy to Christianity, adding that just as there are Protestants, Orthodox and Catholics, there are associations, foundations, social enterprises and co-ops and mutuals. “The ICA is not the Vatican. I am not the Inquisition tribunal to say this is good, this is bad.”
The EU is also working on a taxonomy for sustainable activities, a classification system establishing a list of environmentally sustainable economic activities. But Mr Bancel fears co-ops could be left out if the focus is just on environmental impact, ignoring the social impact of enterprises. “It is very important today to understand that in this battle of ideas that we shouldn’t just respond to other’s concepts. When the SDGs were adopted we said, ‘SDGs are us’. Yes, maybe. We are in favour of the SDGs, everyone is, but how?” He thinks more needs to be done to show how co-ops are contributing to achieving the SDGs.
Another popular trend is the idea of enterprises with a mission. In 2019 France adopted the Pact Law, which created the label ‘company with a mission’ or ‘for purpose enterprise’ for private companies that set one or more social or environmental objectives. But French co-ops are skeptical as to how far shareholder companies can maintain a mission, and contribute to social and environmental objectives while focusing on maximising profit.
In light of all these ideas put forward by the corporate world, Mr Bancel believes the co-operative identity can be a key differentiator for the sector.
“If we don’t hold on to our co-operative identity, we lose ourselves,” he says.