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 Performance benchmark 1999 The Co-operative Bank Partnership Report named Best Social Report at the ACCA UK Sustainability Reporting Awards and receives special commendation for Stakeholder Reporting in the European Environmental Reporting Awards. 2000 The Co-operative Bank Partnership Report named Best Social Report and Best Environmental Report at the ACCA UK Sustainability Reporting Awards. 2001 The Co-operative Bank Partnership Report named Best Sustainability Report and The Co-operative Insurance awarded Best Social Report at the ACCA UK Sustainability Reporting Awards. 2002 The Co-operative Bank Partnership Report named Best Sustainability Report at the ACCA UK Sustainability Reporting Awards and at the European Sustainability Reporting Awards. Also ranked first in the biennial global survey of the world’s leading sustainability reports carried out by the United Nations Environment Programme/SustainAbility. 2003 The Co-operative Bank’s Partnership Report named Best Sustainability Report and The Co-operative Insurance Social Accountability Report awarded Best Social Report (joint winner) at the ACCA UK Sustainability Reporting Awards. 2004 The Co-operative Financial Services Sustainability Report awarded Best Sustainability Report at the ACCA UK Sustainability Reporting Awards and ranked first in the biennial global survey of the world’s leading sustainability reports carried out by the United Nations Environment Programme (UNEP)/ SustainAbility. 2006 CFS’ Sustainability Report runner-up at the ACCA UK Sustainability Reporting Awards; the Report also ranked second by UNEP in its biennial global survey of the world’s leading sustainability reports. 2008 The Co-operative Group’s Sustainability Report 2006/07 achieved the highest AccountAbility Rating of any report undertaken to date. The Sustainability Report 2006/07 runner-up in the Best Sustainability Reporting category at the ACCA UK Sustainability Reporting Awards. 2009 The Co-operative Group Sustainability Report 2007/08 named the most ‘Open and Honest’ Report at the global CR Reporting Awards 2008. The Sustainability Report 2007/08 outperformed all the G100 companies in the AccountAbility Rating. 2010 The Co-operative Group Sustainability Report 2008/09 runner-up in the ‘Best Report’ category at the global CR Reporting Awards 2009, and outperformed all companies assessed, as at February 2010, in the Tomorrow’s Value Rating. Performance benchmark The Co-operative’s approach to sustainability was assessed using The Tomorrow’s Value Rating (TVR) 18 . Assessment was based on disclosure in the 2008/09 Sustainability Report, and focused on five domains: strategy, governance, engagement, value chain, and innovation and leadership. The Co-operative was benchmarked against the leaders in five sectors that had been assessed, as at February 2010 19 , and ranked first, with an overall score of 87%; greatly outperforming the five sector leaders, who scored between 55% and 64%. The Co-operative’s score is more than twice the TVR average (36%) of all companies assessed between February 2009 and February 2010. The development and maintenance of accounting systems across a business as large and complex as The Co-operative can, at times, be challenging, and requires that resources are focused on measuring those things that are most important to the business and its stakeholders. This prioritisation continues to inform the information reported herein. Additionally, content of this Report is informed by the Global Reporting Initiative’s G3 Sustainability Reporting Guidelines. This Report has been checked by GRI and found to be consistent with a GRI G3 application level of A+ 20 . A summary index detailing reporting against the G3 indicators is provided on pages 119–120, with a more detailed account provided in the online version of this Report . Performance benchmark The Global Reporting Initiative’s (GRI) G3 Sustainability Reporting Guidelines provide a globally recognised framework for reporting on an organisation’s economic, social and environmental performance. The Co-operative Group Sustainability Report 2008/09 was also checked by GRI and found to be consistent with a GRI G3 application level of A+. The Co-operative believes that in 2008 and 2009 no other UK company from the food retail, bank or insurance sectors produced a sustainability report to an A+ level 21 . Audit and assurance The Co-operative is committed to the AA1000 Assurance Standard (AS) 22 and, as previously described, considers its sustainability management and reporting to be aligned with the AA1000 Assurance Principles Standard (APS). The AA1000AS was revised and relaunched in 2008, and The Co-operative’s 2009 Report is its second to report in line with the new standard. The AA1000AS (2008) sets out the core elements of credible public assurance statements, and the requirements of the assurance provider in relation to their independence and competencies. In undertaking an assurance assignment based upon AA1000AS (2008), the auditor assesses the degree to which: 12 The Co-operative Group Sustainability Report 2009
• the organisation includes the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability – inclusivity; • reporting contains the information that is relevant and important to stakeholders, as well as the reporting organisation – materiality; and • the reporting organisation has coherently responded to relevant and important stakeholder concerns – responsiveness. The Co-operative appointed Two Tomorrows to provide assurance, primarily on the basis of the high standing in which the principal auditors are held 23 . Given the generally low levels of trust in business, it is vital that those providing sustainability audit and assurance are viewed as being not just professional, but also challenging and sensitive to the aims of sustainable development. The scope and depth of the third-party independent assurance extends to the verification of all key performance data and claims made within this Report, unless otherwise stated in the assurance statement, along with an evaluation of adherence to the AA1000 principles (type 2 assurance) 24 (pages 117–118). The assurance providers were contracted to provide a moderate level of assurance 25 for the majority of the Report content, including information presented in the online version of the Report, and a high level of assurance 26 over the bank’s Ethical Policy implementation. Historic (2006–2008) data relating to former Somerfield waste and energy consumption has been included within this Report for the first time for comparative purposes and this data has not been audited. The internal audit programme reviews sustainability-related processes as appropriate, to support the business and external assurance process. Influence and action For more than a decade, The Co-operative has been active in shaping sustainability accounting and reporting standards, at both a national and international level. During 2009, The Co-operative supported the revision of the AccountAbility Stakeholder Engagement Standard (AA1000SES) 27 . Read more in this Report • Details of democratic structure (pages 89–90). • Co-operative Values and Principles (inside front cover). • Sustainable Development Policy (page 6). • The Co-operative Bank Ethical Policy (page 40). • The Ethical Engagement Policy (page 42). • The Co-operative Food Ethical Policy (pages 30, 36 and 57). • Human Rights and Trade Policy (page 24). • The Co-operative Travel Ethical Strategy (page 24). • The Co-operative Pharmacy Ethical Strategy (page 24). • Sound Sourcing Code of Conduct (page 21). • Materiality and strategy is covered in more detail on the first page of each section of the Report, along with the targets and indicators relevant to the section. Accompanying notes 1 www.accountability21.net 2 The Co-operative Group Annual Report and Accounts 2009 (pages 24–25). 3 In 1987, the Brundtland Report, ‘Our Common Future’, defined sustainable development as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ 4 Terms of reference for elected committees can be found at: www.co-operative.coop/ corporate/sustainability/areacommittees 5 The Co-operative complies with the UK Combined Code on Corporate Governance as far as it is applicable to an Industrial and Provident Society. Compliance is reported in the 2009 Annual Report and Accounts of The Co-operative Group, pages 30–33 and Co-operative Financial Services’ Financial Statements 2009, page 29. 6 Terms of Reference for the V&P Committee can be found at: www.co-operative.coop/ corporate/sustainability/vandptor 7 The Committee’s structure was reviewed as part of the wider Constitutional Review and, as a result, a new structure was adopted in June 2009 (page 89).The restructured V&P Committee met three times between June and December 2009 and also held a conference at which it met with regional V&P committees. One further meeting was held, prior to the V&P restructure. 8 The Co-operative Group Annual Report and Accounts 2009, pages 27–29 and Co-operative Financial Services’ financial statements 2009, pages 45–47. 9 The Audit and Risk Committee has five members. Amongst other things, the Committee monitors the integrity of the Society’s financial statements and any formal announcements relating to the Society’s performance, together with any significant financial reporting judgements contained in the financial statements. 10 CFS’ certification extends to the ‘complete range of operations, activities, products and services personal and corporate banking, insurance, investments and pensions of The Co-operative Financial Services, but does not include former Britannia. 11 The Head of Social Goals and Sustainability and the PA to the Head of Social Goals and Sustainability are included within the ethics and sustainability headcount. Figures are accurate as at December 2009. 12 The Marketing Director has Executive responsibility for community and environmental strategy and performance across The Co-operative, and for marketplace strategy and performance in the Trading Group. Marketplace issues at CFS are the Executive responsibility of the Managing Directors for Retail and Corporate Markets. Trading and CFS Executive teams have Directors of Human Resources with Executive responsibility for workplace issues, such as diversity, health and safety and well-being. 13 Customer-/member-mandated ethical policies are in operation for The Co-operative Bank, The Co-operative Investments and The Co-operative Food. In 2009 these, together, accounted for 76% of The Co-operative’s total revenue. 14 www.co-operative.coop/food/ethics/ Ethical-trading/Ethical-policy 15 Respondents comprised 64,000 Co-operative members and 36,000 members of other co-operative societies. Results presented in this Report relate only to The Co-operative member responses. Analysis by the Customer Insight team shows that respondents to the consultation were representative of the overall Membership base in terms of age, gender and location, and there was a significantly higher representation from the prime target audience of working families. 16 www.co-operativetravel.co.uk/ethicalstrategy 17 The Co-operative Group Annual Report and Accounts 2009, page 26. 18 www.tomorrowsvaluerating.com 19 Sectors assessed to date: hotels, oil and gas, energy utility, ICT and food. 20 For further information on G3 application levels, see: www.globalreporting.org/ GRIReports/ApplicationLevels 21 Based on our assessment of corporate reports detailed at www.corporateregister. com and at www.globalreporting.org/ GRIReports/GRIReportsList; Corporate Register lists details of approximately 95% of all sustainability reports published. 22 www.accountability21.net 23 Members of the Two Tomorrows team have previously provided assurance on CFS and Co-operative Group Sustainability Reports, which were rated by UNEP’s biennial assessments as incorporating the best third-party audit and verification of any reporting in the world. Further information relating to the audit team, including Statements of Competencies and of Impartiality, can be found at www. twotomorrows.com 24 AA1000 Assurance Standard 2008. Type 1 assurance evaluates the nature and extent of an organisation’s adherence to the three AA1000 AccountAbility Principles. Type 2 assurance evaluates adherence to AA1000 AccountAbility Principles, as for type 1 assurance, and, in addition, evaluates the reliability of specified sustainability performance information. 25 An assurance provider achieves moderate assurance where sufficient evidence has been obtained to support their statement such that the risk of their conclusion being in error is reduced, but not reduced to ‘very low but not zero’. 26 An assurance provider achieves high assurance where sufficient evidence has been obtained to support their statement such that the risk of their conclusion being in error is ‘very low but not zero’. 27 www.accountability21.net Chief Executive’s overview 2009 at a glance Commentary Sustainable Development Policy Mergers and acquisition About this Report Sustainability management The Co-operative Group Sustainability Report 2009 13
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 and 10: About this Report Target attainment
Page 11 and 12: Mechanisms that influence materiali
Page 13: distinct team within The Co-operati
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
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Page 57 and 58: The Co-operative Asset Management -
Page 59 and 60: Climate change Indicators Energy: c
Page 61 and 62: Total net CO 2 emissions from energ
Page 63 and 64: 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
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were in perceptions that: colleague
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CFS has developed, delivered or sup
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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
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Public policy ‘influence and acti
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Trade and business association memb
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Independent assurance statement Sco
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Reporting in accordance with the GR
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Recognition Social responsibility
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