Sustainability Report 2009 - The Co-operative

Chief Executive’s overview
2009 at a glance
Sustainable Development Policy
Sustainability management About this Report
Mergers and acquisition
Commentary
Stakeholders
Members Anyone who is aged 16 or over, who lives in the UK, shares
The Co-operative’s Values and Principles and agrees to invest at least £1
can become a member. At the end of 2009, The Co-operative had 3.3
million economically active members who received a dividend payment,
and 470,000 democratically active members (pages 90–91).
Customers Approximately 21 million customers visit The Co-operative
Food each week and CFS has approximately nine million.
Employees At the end of 2009, The Co-operative had 113,391 staff, of
whom 101,699 were employed by the Trading Group, and the remaining
11,692 were employed by CFS (page 100). Of these, 89,000 were
co-operative members.
Co-operative Movement There are over 800 million co-operators
across the world, and The Co-operative, as one of the largest co-operatives
worldwide, seeks to deliver value to the rest of the Co-operative Movement
in line with the sixth co-operative principle, ‘co-operation between
co-operatives’ (inside front cover).
Suppliers Relationships with The Co-operative’s suppliers range from
infrequent purchases to ongoing strategic partnerships across the different
business areas. In 2009, the number of suppliers of goods and services to
The Co-operative, with whom yearly spend exceeded £50,000, totalled 1,800.
Wider society Amongst other groups, ‘Wider society’ encompasses
the communities within which The Co-operative trades, local and national
governments, NGOs, industry organisations, multi-stakeholder groups,
charities and external expert organisations.
Governance
Throughout 2009, oversight of The Co-operative’s sustainability,
community and Membership engagement strategies was
undertaken by the V&P Committee. During 2009, the Terms
of Reference 6 , composition and method of election of the V&P
Committee changed. The Committee 7 has Co-operative Group
and Regional Board representation and is accountable to The
Co-operative Group Board. Since June 2009, the Committee has
comprised four Board directors and an elected representative
from each of The Co-operative’s seven regions. Two further
representatives were appointed by the Group Board in 2010,
representing, and having been nominated by, the Diversity
Working Group and Independent Society Members respectively.
That such authority should rest with a body made up almost
entirely of elected members is significant, and is almost certainly
unique among large businesses in the UK.
More broadly, the majority of Co-operative Group Board members
(15 of 20, or 75%) are elected by 46 area committees, which, in
turn, comprise individuals from the individual membership base
(page 89). The remaining five members are elected by, and from,
the corporate membership, who represent societies to whom the
business provides services. Formal sign-off of the Sustainability
Report is provided by The Co-operative Group Board.
Each region has a V&P Committee, which is tasked with ensuring
that co-operative principles and social goals are pursued at a
regional level. A region’s V&P Committee comprises members who
have been elected from and by area committees or the regional
board. It has the authority to escalate issues for the consideration of
the national V&P Committee.
Responsiveness
The Co-operative is responsive to relevant and important
stakeholder concerns, as detailed throughout this Report.
In addition, the Report itself forms part of The Co-operative’s
responsive approach, through which the business sets out targets
in relation to material issues, and strives to detail progress in an
open and honest manner. Members’ capacity to effect change
within the business includes, but is not restricted to, the area
of sustainability.
Risk management and internal control
The Co-operative operates a diverse range of businesses and is,
therefore, exposed to a complex array of risks (in this context,
risks are considered material only in so far as they have the ability
to impact the short- and/or long-term value of the business). In
2009, in accordance with the requirements of the Enhanced
Business Review regulations, the Annual Report and Accounts
of The Co-operative Group and CFS each provided a statement
on the principal risks and uncertainties being faced 8 .
Each business has a risk register that identifies the likelihood
and impact of risks occurring and the actions being taken to
manage them. Risk assessments are updated on a regular basis
by bespoke risk management committees and are regularly
reported to the Management Executive teams and the Board
through the Audit & Risk Committee 9 . Significant risks are
combined for the whole business and recorded in a Risk Register,
which is considered by the Risk Management Committee (this
includes representation from the Social Goals and Sustainability
department), which provides reports, four times a year, to the Audit
& Risk Committee. Damage to reputation or brand, including the
strength of The Co-operative’s ethical stance, is one of the risks
addressed. The Co-operative Group and CFS Boards each have
overall responsibility for risk management and for ensuring that
the process is aligned to business strategy and objectives.
On appointment, directors undertake an induction programme,
designed to develop their knowledge and understanding of The
Co-operative (page 91). Throughout their period in office, directors
are regularly updated on the business, its competitive and regulatory
environments, corporate social responsibility matters and other
changes affecting it and the industries in which it operates.
Throughout 2009, the Board received quarterly progress reports
on ethics and sustainability matters. In addition, the Trading Group
and CFS Executive teams received monthly updates on progress,
with an emphasis on matters arising and developments pending.
In July 2009, former CFS’ environmental management systems
were re-certified to the ISO 14001 standard at its annual audit
inspection and, in 2010, the certification will be extended across
the enlarged CFS business. CFS was the first financial services
organisation in the world to secure certification for all its
business activities 10 .
Management
Day-to-day management of the Social Goals Strategy is undertaken
by the ethics and sustainability (18 full-time equivalent staff) and
community and campaigns (17.5 full-time equivalent staff) teams
in the Social Goals and Sustainability department 11 . The Head of
Social Goals and Sustainability reports to the Marketing Director,
who is a member of the Trading Group Executive 12 . Following the
mergers and acquisition that took place during 2009 (page 6), the
team is responsible for managing the Social Goals Strategy across
the enlarged business.
Responsible investment activities are, additionally, supported by a
distinct team (six full-time equivalent staff) within The Co-operative
Asset Management function. Responsible retailing is managed by a
10
The Co-operative Group Sustainability Report 2009