Sustainability Report 2009 - The Co-operative

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Chief Executive’s overview 2009 at a glance Sustainable Development Policy Sustainability management About this Report Mergers and acquisition Commentary Sustainability management Indicators Sustainability governance and management systems Awards and recognition Targets 2009 Ensure that The Co-operative’s sustainability accounting and reporting systems are recognised as being at the leading edge of best practice in the retail and/or financial sectors in 2009 (page 12). Continue to contribute to the development of global standards for business accountability (page 13). target achieved on track Targets 2010 close to target behind schedule target not achieved • Ensure that The Co-operative’s sustainability accounting and reporting systems are recognised as being at the leading edge of best practice in the retail and/or financial sectors in 2010. • Commence development of an Ethical Strategy for The Co-operative Funeralcare. Background The Co-operative aligns its sustainability management and reporting with the three principles of the AA1000 AccountAbility Principles Standard (2008) 1 : materiality, inclusivity and responsiveness. The term ‘social accountability’ has gained increased currency amongst businesses; however, its scope is usually restricted, at best, to stakeholders having a say in what issues a business measures and reports on (ie, the ‘materiality’ of the issues). This is good and proper, and an approach The Co-operative Financial Services (CFS) pioneered for over a decade, and for which it has received more than a dozen awards. At the same time, members are firmly embedded in governance (both in general, and in sustainability governance specifically) and policy formulation (pages 10–11). As such, whilst engagement with stakeholders continues to be central to The Co-operative’s approach, there is an increased focus on how strategies, policies and performance respond to stakeholder concerns via its democratic structures (ie, the ‘responsiveness’ of the business). Materiality and strategy The Co-operative identifies and focuses activity on those issues that are of greatest relevance and significance to its stakeholders and to the business. The diagram on page 9 details those factors that influence materiality decisions. This Report is structured around the issues that have been identified as being most material, and each section of the Report details how materiality has been determined in each of these areas. The Co-operative’s vision is to be the best co-operative business in the world. In pursuit of this, commercial success, competitive advantage and social goals have been identified as strategic imperatives, as set out in a balanced scorecard. The Co-operative balanced scorecard COMMERCIAL SUCCESS Growing business Growing & engaging Membership Growing customer loyalty Growing profit Growing corporate reputation COMPETITIVE ADVANTAGE Growing colleague engagement While the Trading Group and CFS have a common set of strategic priorities, the methodology for measuring these differs slightly in most cases, reflecting the differing nature of their respective markets and operations. In accordance with the Business Review requirements of the Company Act 2006, the key performance indicators underpinning strategy, together with progress, are now reported on for both the Trading Group and CFS 2 . In 2006, a Social Goals Strategy was developed for the business. This was considered, refined and approved by the Executives of CFS and the Trading Group, and subsequently the Values & Principles (V&P) Committee (page 10). The strategy acknowledges that no business can lead on every aspect of sustainable development, and that issues need to be prioritised and resources focused. The strategy has been further refined over time and now sets out the aim to progress and lead on: ‘openness and honesty’, particularly in respect of sustainability accounting, auditing and reporting; ‘stakeholder accountability and engagement’, particularly in respect of customer and member involvement in policy development; ‘ecological sustainability’, with a particular focus on combating climate change, followed by waste and biodiversity; ‘international development’, with a focus on tackling global poverty initiatives; and ‘community investment and campaigns’, with an emphasis on positive public policy engagement. In 2009, it was agreed that ‘water’ would be added to the list of ecological priorities, and a consultation on the Community Plan (which is a subset of the Social Goals Strategy) added ‘inspiring young people’ SOCIAL GOALS 8 The Co-operative Group Sustainability Report 2009
Mechanisms that influence materiality decisions Member views/ democratic participation Other stakeholder views Business strategy • Food Ethical Policy consultation (page 11) • Issues raised at AGM/half-yearly meetings (page 90) • Issues raised via regional boards and area committees (pages 89–90) • Issues raised via elected committees (eg, V&P Committee) (page 10) • Membership Engagement Strategy (page 91). External reporting standards and benchmarks • Customer participation in The Co-operative Bank Ethical Policy review (page 11) • Customer participation in The Co-operative Asset Management Ethical Engagement Policy review (page 42) • Employee surveys (page 100) • Customer Satisfaction Trackers (page 108) • Corporate Reputation Index (page 109) • Bank, insurance and food customer panels (page 111) • Customer Chip and Pin InSight surveys (page 111). Decision-making on material issues Co-operative approach to business • Balanced scorecard (page 8) • Direct financial impacts as referenced throughout the Report • Sustainable Development Policy (page 6) • Social Goals Strategy (page 8) • Business-specific strategies (eg, The Co-operativeTravel Ethical Strategy (page 11)) • Issue-specific policies and codes referenced throughout the Report (eg, Health and Safety Policy (page 11), Sound Sourcing Code of Conduct (page 21)) • Community Plan (page 15). Societal norms and emerging issues Chief Executive’s overview 2009 at a glance • Global Reporting Initiative (pages 12 and 119–120) • Co-operatives UK social reporting indicators (page 94) • Social performance and reporting benchmarks (eg, Business in the Community’s Corporate Responsibility Index (page 11), Tomorrow’s Value Rating (page 12)) • Issue-specific benchmarks as referenced throughout the Report (eg, HSE accident rates (page 105), Ethical Trading Initiative returns (page 21)). to the community priorities of combating climate change and tackling global poverty (page 15). These two issues are reported on for the first time in 2009, in the online version of this Report , and stakeholder feedback on their content is invited. The need for the business to develop in a more sustainable manner 3 is central to The Co-operative’s strategy as set out in the Sustainable Development Policy (page 6). Underpinning this pursuit of sustainable development is a system of governance, management, accounting and internal control that is considered to be increasingly robust, together with a commitment to provide leading-edge openness and honesty. Inclusivity Six classes of stakeholder have been identified, upon whom its continued success is, to varying degrees, dependent, and engagement with key stakeholders remains an important ongoing activity in achieving an accountable and strategic response to sustainability. Examples of such engagement range from employee surveys (page 100), supplier training events (page 23) and customer surveys (pages 108–111) – typical of the approaches undertaken by many businesses of The Co-operative’s size – to consultations on the direction of ethical policies (page 11) and • Co-operative Values (inside front cover) • Co-operative Principles (inside front cover). • Emerging legislation/regulation/ voluntary compliance relevant to co-operative, social, ethical or environmental matters • Research (eg, The Co-operative Bank Ethical Consumerism Report) • Issue-specific forums • Media. member democratic participation (page 90). These latter examples of embedded engagement reflect the co-operative Values and Principles and have wide-reaching impacts on business strategy. Democratic participation is an important element of The Co-operative’s approach to inclusivity. Elected area committees 4 and regional boards, which are drawn from the Membership, consider issues as diverse as store performance, developments and closures, and the allocation of Community Fund donations. Working in parallel with the democratic governance structure, the business also operates more traditional governance structures, which include mechanisms to manage and oversee the approach to sustainability 5 . During 2009, members participated in a consultation that led to a new Membership Engagement Strategy being agreed in September (page 91). Customers were also consulted on a range of subjects, including sustainability-related issues via weekly InSight surveys carried out in-store (page 111). Other examples of engagement and stakeholder views arising are presented in relevant sections of this Report. Commentary Sustainable Development Policy Mergers and acquisition About this Report Sustainability management The Co-operative Group Sustainability Report 2009 9
Page 1 and 2: Sustainability Report 2009 Focus on
Page 3 and 4: The Co-operative Group Sustainabili
Page 5 and 6: prioritising community investment a
Page 7 and 8: “There is a tide in the affairs o
Page 9: About this Report Target attainment
Page 13 and 14: distinct team within The Co-operati
Page 15 and 16: • the organisation includes the p
Page 17 and 18: Community investment Indicators Com
Page 19 and 20: Employee volunteering 14 Number of
Page 21 and 22: International development and human
Page 23 and 24: 000 400000 500000 The Co-operative
Page 25 and 26: Completion of improvement actions i
Page 27 and 28: One Big Idea competition In Novembe
Page 29 and 30: employed from the local population.
Page 31 and 32: Read more in this Report • The Co
Page 33 and 34: Independent third-party auditors ar
Page 35 and 36: Beef production All own-brand fresh
Page 37 and 38: The Co-operative Asset Management o
Page 39 and 40: Achievements 1986 In the absence of
Page 41 and 42: Community involvement Food educatio
Page 43 and 44: to be considered in the provision o
Page 45 and 46: Ethical and sustainability engageme
Page 47 and 48: Ethics and sustainability overseas
Page 49 and 50: Social inclusion Indicators Access
Page 51 and 52: intended to enable UK consumers to
Page 53 and 54: Diversity Indicators Gender Ethnici
Page 55 and 56: The Trading Group and CFS are holde
Page 57 and 58: The Co-operative Asset Management -
Page 59 and 60: Climate change Indicators Energy: c
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Total net CO 2 emissions from energ
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Decrease 2006-2009: 40% Decrease Th
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Carbon footprinting In 2007/08, The
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Bank finance for renewable energy I
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Oil sands consist of oil trapped in
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Waste and packaging Indicators Wast
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2007 2008 2009 140,766 r 134,798 r
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• 212 tonnes of tyres, oil and pa
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Biodiversity Indicators MSC-certifi
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Total percentage of own-brand fores
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Tillington Hills apple crush, part
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Yes 88% No 12% InSight customer fee
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Examples of decisions taken on chem
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The Co-operative Farms’ use of ch
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Focus on delivering value Contents
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Member economic involvement Share o
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Activism Democratically active memb
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The Co-operative Enterprise Hub: fi
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2,057.3 2,057.3 1,271.5 1,271.5 57.
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British sourced, traditional Hampsh
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Employees Indicators Employee engag
Page 103 and 104:
were in perceptions that: colleague
Page 105 and 106:
CFS has developed, delivered or sup
Page 107 and 108:
esult of greater awareness of the e
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8 2006 figure comprises The Co-oper
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A range of drivers impact on custom
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Complaints received by other custom
Page 115 and 116:
Public policy ‘influence and acti
Page 117 and 118:
Trade and business association memb
Page 119 and 120:
Independent assurance statement Sco
Page 121 and 122:
Reporting in accordance with the GR
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Recognition Social responsibility
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Sustainability Report 2009 - The Co-operative

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