Sustainability report reveals the Co-operative Group’s approach to social responsibility

Last month the Co-operative Group published its annual sustainability report, which sets out the organisation’s approach to the key sustainability issues for the business in 2013. The report also...

Last month the Co-operative Group published its annual sustainability report, which sets out the organisation’s approach to the key sustainability issues for the business in 2013. The report also provides an insight into the business’ performance. Structured in three main parts, the document looks at the Co-operative’s take on social responsibility, protecting the environment and delivering value to its members.

Richard Pennycook, chief executive, said: “This report reflects a period of transition for us as we recover from the crisis of 2013 and begin to rebuild the Group’s reputation and commercial performance. Central to our recovery is our renewed commitment to place communities at the heart of our business approach.

“Our new Purpose – ‘Championing a better way of doing business for you and your communities’ – reflects that, for the Co-operative Group, how we run our business is more important than merely maximising our profits. It takes us back to our roots, and the very reason why we developed our co-operative approach.

“Our Purpose encapsulates our aims to be commercially successful while continuing to implement our commitment to ethical values and sourcing. As with other major businesses, we face a wide range of social and environmental issues, and this report presents an open and balanced review of how we continued throughout 2013 to respond to them.”

Social Responsibility

According to the report, in 2013, the Group invested £15.7m (£17.6m in 2012) in UK communities, including contributions by employees, customers, members and suppliers. The Co-operative Membership Community Fund had a reduced income to £1.8m in 2013, which the Group sees as the result of the fall in profits and the lack of a half-year member dividend payment in November 2013.

The Community Fund is made up of donations from members who donate part of their share of profit every year. It provides support to voluntary and self-help community organisations that can receive grants between £100 and £2,000. The year 2013 saw a decrease in the total amount donated which, in turn, determined a decrease in the total amount donated from £3.2m in 2012 to £2.8m in 2013 and the number of awards made from £2.709m in 2013 to £2.270m in 2013.

The report highlights that at least 10% of profits for distribution was made available for community investment in 2013.

“It is heartening that even amidst the negative publicity, the efforts of our colleagues and members continue to receive due recognition. Our award-winning Charity of the Year programme raised £6m for Carers Trust, benefiting over 20,000 young adult carers in the UK by 2016 and 1.5 million young people benefited from our Inspiring Young People programme,” commented Mr Pennycook.

Employees also played an important role in the Group’s community activities, having contributed the equivalent of 12,775 days, a donation of time worth £1.3m.

At international level, the Co-operative is involved with overseas communities through various initiatives as part of its Beyond Fairtrade programme. Last year, 17 co-operatives and producer organisations in Africa, Latin America and the Caribbean gained better access to markets and capacity to capture more value from their producers and access basic necessities through the Beyond Fairtrade programme. The Co-operative is the first UK supermarket for Fairtrade retail share relative to size.

The Group has helped develop a number of projects abroad in 2013, including helping to secure treadle pumps in India, energy-efficient stoves in Cambodia and water filters in Kenya. The partnership with CARE International UK continued throughout 2013, which enables Co-operative members to lend small sums of money directly to entrepreneurs in the developing world.

Added Mr Pennycook: “Our Fairbourne Springs bottled water, which supports humanitarian projects in Africa, was recognised at a reception at 10 Downing Street. The award, presented to our chair by Samantha Cameron, recognised the £5m that our customers and members have helped to raise since 2007.”

In terms of food origin, safety and quality, the Co-operative tries to meet an increased demand for seasonal and locally sourced products.

“Our responsible retailing commitments have been benefiting communities at home and abroad, as our leading position on Fairtrade products continued, with sales increasing slightly to £140m. Closer to home, we sourced all own-brand eggs, milk, fresh and frozen chicken, turkey, beef, pork and sausage from the UK in 2013,” said Mr Pennycook.

The Co-operative launched its own-brand healthier range in 2013, which are no more expensive than standard equivalent lines. Around 32% of their promotions in 2013 were for healthier products, and to encourage more members to increase their consumption of fruit and vegetables, they continued the smart coupon scheme.

The Group’s Insurance business also received an awarded last year from the Ethical Consumer Research Association, who awarded Best Buy status to its home and motor policies.

The Co-operative has received two recognitions for its initiatives aimed at championing equal opportunities and diversity. It has been named the Business of the Year at the Lesbian and Gay Foundation’s Homo Hero Awards 2013 and it was re-accredited as Two Ticks employer, which recognises its commitment to recruiting and developing people with a disability.

Protecting the environment

In 2013 the Co-operative developed a number of initiatives aimed at protecting the environment, having saved £70.7m from energy efficiency in 2013. Throughout 2013 the retailer has sold compostable carrier bags, which can be used as a food waste caddy liner.

Said Mr Pennycook: “The report shows that we have continued to reduce our environmental impacts, with a 45% reduction in greenhouse gas emissions and an 18% reduction in transport miles since 2006. Our total waste arisings are down 40% since 2006, and we reused/recycled 72% of our waste in 2013 – with our award-winning programme to backhaul waste from all our food stores set to halve the waste bill from our Food business.”

The organisation received the 2013 IGD Environmental Sustainability Award for its Waste Backhauling initiative. Over 98% of the electricity used by the Cooperative in 2013 came from renewable sources and through the Co-operative Enterprise Hub, the Group has supported 22 renewable energy co-operatives since 2012.

The report also highlights that 98% of the Co-operative’s own-brand wood and paper products sold are certified by the Forest Stewardship Council. The proportion of their wild fish and seafood range from Marine Stewardship Council (MSC)-certified fisheries also increased to 62% in 2013. However, even though the retailer used 58,537 tonnes of soya meal in the production of their own brand products, none of this was certified as sustainable by the Roundtable on Responsible Soya (RTRS) or an equivalent standard. Likely to fail to achieve its 2015 target to source all soya used as animal feed responsibility by 2015, the Co-operative is working on setting a new target.

As part of its biodiversity initiatives, the Co-operative continued its Plan Bee campaign, which seeks to address the decline of pollinators. In 2013 it also used money raised through the Co-operative Food and Pharmacy stores from the Welsh carrier bag levy to support a range of environmental projects in Wales. Another water consumption campaign saw the Group reducing the amount of water used across the business by 7% since 2010.

Delivering stakeholder value

With 500,000 new members joining in 2013, the Group has now over 8.1m members, of whom 5.6m have an active trading status. The number of young members aged between 16 and 24 increased from 248,000 in 2012 to 291,000 in 2013.

However, the proportion of female elected members on the Group Board decreased from 25% to 20% in 2013. The number of targeted members voting also increased, but the proportion that voted decreased from 13% in 2012 to 9% in 2013.

Over 638,000 Group members received rewards by using their membership card, with a total value of £1.6m. This represents an increase from 2012, when around 592,000 members obtained rewards worth £1.355m.

The Group has also invested £2.6m in support of co-operative encouragement bodies 2013 and another £1.5m in the creation and growth of co-operative enterprises through the Co-operative Enterprise Hub.

The report reveals that the number of colleagues has decreased from 98,755 in 2012 to 86,953 in 2013. The Co-operative continued to provide training schemes for its employees, investing £120,000 (£180,000 in 2012) and providing 878 (1,078 in 2012) training places. The Group’s graduate programme, which with consists of 46 graduates, was ranked 74 in the Times Top 100 Graduate Employer list in 2013.

The report reveals that 13.5 million households shopped at the Co-operative Food in 2013. The Co-operative achieved a 7.4-point (out of 10) satisfaction score for the Co-operative Food, and customer service questionnaires also revealed that customers were very satisfied with the Co-operative Funeralcare, the score increasing from 93.3% in 2012 to 93,8% in 2013.

In 2013 the group contributed £2.1bn to national wealth, a decrease from 2012 (£2.2bn). However, due to a £2.5bn loss as reported in April 2014, the Co-operative had no profit to share with members.

Commenting on the Group’s sustainability report, Jonathon Porritt, Founding Director at Forum for the Future said: “Behind all the headlines, the day-to-day sustainability work was pursued through 2013 with undiminished enthusiasm, not just by the full-time sustainability staff, but by the thousands of Co-operative employees involved in different parts of the programme. In most areas, good progress has been made, which means that the level of investment back into the community (both here in the UK and overseas) remains hugely impressive – as does its continuing commitment to sustainable energy.

“98% of The Co-operative’s energy comes from renewable sources, and it remains committed to self-generating 25% of that total by 2017. Greenhouse gas emissions were down another 3% in 2013, making a total reduction of 45% since 2006. Its support for community energy has been outstanding and it has campaigned effectively to promote a more balanced, progressive energy strategy for the UK.”



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