Global Impact Award

Excellent news last week that the Co-op won The Hermes Global Impact Award at the Retail Week Awards.

Championing Fairtrade products, contributing to local community, launching the Bright Future programme to help victims of Modern Slavery, recycling and the Future of Food strategy were all called out as examples of what puts Co-op ahead of most other businesses.

One of the judges said: “If it was about a single initiative or a campaign there were good entries, but in terms of multiple initiatives over time and the aggregate impact they have, the Co-op just stands out on its own. “The grocer shines a light on important issues like slavery and water – not always the ones that are popular. There’s a pure intent. Tackling modern slavery by offering a path back into employment is a great approach.”

Another judge commented: “The Co-op consistently delivers. It’s cultural across its business – the grocer doesn’t just talk about it, it lives and breathes it.  The Co-op has a strong, genuine sense of duty and community. It is properly entwined with every part of the organisation and it deserves to be properly recognised for that. The Co-op is staying true to its purpose of ‘championing a better way of doing business’, which makes it the worthy winner of this award.”

Reading these plaudits is most encouraging, and having just spent this morning reviewing the 2018 Co-op Way sustainability report at the Risk and Audit Committee, I know we have plenty more positive news to report on the sustainability front.  I was particularly pleased that the Committee met once again with our assurance providers, DNV, and that we considered their report at the same time as our draft financial accounts for the last year.  This to me symbolises the way that we give equal weight to our ethical and financial performance, recognising that the two can and should reinforce each other in a virtuous circle of creating a stronger Co-op the more we can be seen to be contributing to stronger communities and a more sustainable world.

Brexit implications

Like many others I find Brexit is a constant topic of conversation at the moment. Personally I voted Remain, mainly on the grounds of international solidarity and because I saw the UK as a positive influence for good within a Europe that was (and is) facing serious challenges. As a historian by training I am very conscious of how fragile Europe has always been, and how much we all benefit from peace and stability and have a responsibility to contribute to it.

The Co-op Group chose not to campaign on the subject at the time of the referendum because we recognised that our membership was pretty evenly divided on whether to leave or stay in the EU, and the issues at stake were far wider than the difference it might make to the Co-op on which we could legitimately speak.

But what difference would Brexit make to the Co-op, particularly if it is a “hard exit”?

If, as seems likely, Brexit leads to a deflation of sterling, then the cost of all food imports will go up, and this may be amplified by the additional frictions of bringing food across borders, and possibly by the imposition of WTO tariffs. Although the Co-op sources more product proportionally from the UK than the other major retailers, a lot of what we sell is of course still imported, and competitive pressures will inevitably also force the price of UK-sourced goods up. Price competition between retailers may shield consumers a little, but the scale of price rises means that food prices are almost certainly going to rise pretty steeply.

Food retailers are more protected than some in inflationary times, because we all still need to eat. However, as consumers feel their purchasing power squeezed they will be forced to choose more basic products, and (a good thing this) will become much more conscious of only buying what they need. Competition from discounters will become even stronger in this context – although Aldi and Lidl imports a great proportion of what they sell from Europe and so may be disproportionately disadvantaged.

We will also be concerned about our colleagues from overseas. Although they will have some rights to remain here, we know they will feel less welcome in our country and some valued members of our teams may choose to leave. For those who are sending may back to their homes, their sterling earnings will be worth less because of the likely downward movement of the pound. Many of our agricultural suppliers will be even more affected by the reduced attractiveness of coming to the UK for the seasonal workers on whom they depend.

Are there any upsides? From a strictly Co-op Group perspective, I can see few benefits from leaving the European Union.

But whatever happens we have to recognise that we have become a society where a sense of division is more acute than at any time since the 1930s. Brexit has accentuated perceptions of the real unfairness of income distribution between rich and poor, between the university-educated and the less-educated, between skilled and unskilled, between the regions and the South East, between companies and the people. It is also leading to a sense of distrust in our political system and its ability to work for the common good. It has made it clear that something has gone wrong with the working of our society, and we need to change.

This will be a context not too dissimilar to the times when the co-operative movement started in the 19th century. So co-operative values and approaches will be more important than ever – and are likely to resonate more with the general public. Themes of justice, fairness and working together to build stronger community, which are all intrinsic to co-operation, will be very relevant to re-creating a cohesive society in this country.

So whether we leave or whether we remain in Europe, now is a time when we need to promote the benefits of co-operation and community values afresh – and it just may be that we will find the nation readier than ever to respond. That is a challenge and an opportunity to which I hope the Co-op will be able to respond.

2017 AGM

Just back from the Co-op AGM in Manchester.  This was an inspiring event, with a good turnout of members, impressive debut speech from our new Chief Executive Steve Murrells and a great sense of an organisation now back in a stable position and beginning to think more about areas in which we can challenge the status quo as well as extend our trading.

  For me there were four particular highlights:

1. Modern Slavery

We gave great attention to our new commitment to leading work on Modern Slavery.  It was horrific to learn that there are thought to be 21 million victims of slavery worldwide – more than at any other time in history.  And it is estimated that there are 10,000 slaves in the UK today.  We are committed at the Co-op not only to working hard to ensure that our supply chains are free of this scourge, but to providing survivors with paid employment to help restore their dignity and sense of self worth.  There was a powerful and emotional video sharing the story of one of the three former slaves who have been given permanent employment by Co-op, together with a commitment to taking on 30 more this year working with two charities (City Hearts and Snowdrop) in our Bright Future initiative.  It was great to get an endorsement from members of our plans to campaign to encourage other companies to do likewise.

2. Fairtrade

This is a picture of me with Brad Hill, who heads up the Co-op’s Fairtrade work.

More good news on the Co-op’s commitment to Fairtrade, with our volumes of FT sales (18.5% up on last year) now over-taking Tesco’s to make us the second largest Fairtrade retailer in the UK.  Only Sainsbury’s sells more, and with their momentum appearing to wane it is clear that our support for the movement is increasingly crucial.  Our focus on maximising impact for producers is driving our new initiatives.  Having taken all the cocoa in own brand products Fairtrade this year, we are now going to do the same with tea, coffee and bananas.  So not only will these product categories continue to be 100% Fairtrade, but we will always source them on fair trade terms when they are used as ingredients in other products too.

It was also great to hear that because of our work with One Foundation (donating 3 pence per litre on sales of our bottled waters to water projects in Kenya and Malawi) we are the only UK retailer to be invited to join a new UN backed initiative (the Global Investment Fund for Water) to promote clean water.

3. Waste and recycling

New commitments on making all our food packaging recyclable by 2023 (though there is perhaps still more to do on reducing packaging).  We will also be working with FareShare to redistribute the food for 20 million meals.  These are great initiatives – although in my view we still need to do more to tackle the root problems behind food waste.

It was also great to see the Co-op’s first hybrid diesel/electric powered lorry outside the conference centre!  It is the only 26 tonne lorry of this type in the UK, and we are trialling it as a way of improving fuel efficiency and reducing noise.

4. Community engagement

The launch of our Member Pioneer scheme, which over time will lead to 1500 activists working in the localities we serve to mobilise our members behind improving the well-being of their communities.  About 60 Pioneers have been recruited so far (from 450 applicants) and we have started to train and resource them.

Lemn Sissay, the poet and Chancellor of Manchester University, has agreed to be Ambassador for the scheme, and gave a rousing speech on the importance of communities and also on our embracing migrants and refugees (recognising that migration is part of all our stories and integral to being human).  This initiative promises to make our community support even more meaningful than the money given to good causes:  £9 million distributed just last month as a result of our 5+1 membership scheme, and a further £6 million raised to fight against loneliness with the Red Cross (nearly double our target figure).  I hope tackling loneliness will become a big feature of our local work going forward – with hard evidence that nothing does this better than encouraging people to volunteer and become engaged with local initiatives.

Re-elected!

Oh, and then there was the good news that I have been re-elected for a second term as Member Nominated Director!  Although the voting numbers weren’t announced formally at the meeting I am told that I received over 40,000 of the first preference votes, with the other two candidates being on just under 20,000 each.  I am humbled and delighted by this endorsement, and look forward to the next two years of serving the Society.

Co-op: back to the future

Spent yesterday visiting the wonderful Beamish open air museum here in the North-East. As always one of the highlights was going round the village high street from the early 1900s: a high street dominated by the Co-op’s grocery and haberdashery stores.

I loved the nostalgia of looking along shelves to see some brands that are still going strong (Colman’s mustard, Rowntree chocolate …), and other products that have long since disappeared.  Lots of Co-operative Wholesale Society own brand products too, of course, many of them manufactured and packaged in our own factories and proudly labelled with their origins.  Early examples of the importance of knowing a product’s provenance.

And there were the posters urging customers to “Join Us” as members – something we are still encouraging people to do today.
   Over half a million customers have signed up to become members since the New Year – so we are well on our way to the target of one million new members this year.  But we need to do more than sign people up.  We need to reconnect with the local community too, in the same way that the store at Beamish was once the heart of the community in Annfield Plain.

So I am delighted with the £9 million we have given to 4,000 good causes around the UK and that we have announced in the last week.  This is the first fruit of our 1% donations on all own brand products bought by members since the relaunch of our Membership offer in September. As the scheme builds we hope to be giving £20 million a year in this way: that’s serious money.  I hope the pioneers and the many colleagues who worked for Co-op down through the last 170 years would be proud of what we are still able to do in the spirit of the service they gave their local communities.

Tackling loneliness together

The Co-op Group and British Red Cross have formed a partnership to tackle the issue of loneliness in the UK, and launched a research report on the subject yesterday.  This has highlighted that loneliness is not just an issue for older people, but can affect people of all age and backgrounds. The media have particularly picked up the fact that new mums are especially vulnerable to feeling isolated while looking after their young children – but there are many other affected groups.

loneliness-report            loneliness-presentation

For the Co-op loneliness is an issue of relevance to many parts of our family of businesses.  Our food stores provide a vital social lifeline for people who otherwise have little contact with others – and we know many stories of our colleagues who have gone out of their way to look after regular customers whom they suspect to be isolated and who fail to turn up when expected at that store.  Our FuneralCare business is also at the front line in providing help to people at a time when they are particularly likely to fall into a cycle of loneliness and depression following the death of a loved one.

So it is no surprise that over the last 15 months our colleagues have really thrown themselves behind fund-raising efforts for the British Red Cross as our chosen charity partner.  We set a target of raising £3.5 million over two years, but have already exceeded £4 million and are still going strong.

But what is really exciting is that we are not planning just to hand over a cheque and let the Red Cross get on with things.  We announced yesterday that Co-op intends to really get behind the challenge of tackling loneliness in an active way:

  • Encouraging members and colleagues to volunteer for the new centres being set up by the British Red Cross across the country to reach out to people experiencing loneliness and help them to reconnect with their communities.
  • Building up local voluntary organisations in the 1500 communities around the country where Co-op has a presence, through distributing of 1% of the value of member purchases of own brand purchases.  The research indicates that getting involved in volunteering is one of the best ways of overcoming loneliness and restoring one’s sense of identity and purpose.  My hope is that we can also harness the energies of some of our 50,000 pensioners behind such groups.
  • Setting up more bereavement clubs in our funeral homes, a proven way of helping people at a key trigger point in their lives.
  • Our Insurance business is aiming to help set up 30,000 further Neighbourhood Watch groups – and encourage them not only to look out for each other’s property, but to look out for those suffering loneliness and other issues in their own communities.
  • Increasing awareness of loneliness issues among our own 70,000 colleagues.  The research ages it clear that many people in the workplace are experiencing loneliness, and that employers can do more to help. There is also a key role for us as a business to help our own colleagues prepare well for retirement – another of the key transition points that people can find difficult.

crofts-loneliness-2So this initiative is going well beyond the normal Corporate Social Responsibility raising money for good causes. It is about getting the organisation as fully behind tackling loneliness as we can. It is a great example of a full collaboration between a business and a major charity. And it is another good reason to feel proud and excited about being Co-op and the way Co-op is really re-engaging with making our communities better places for everyone.

You can find the full and summary report at: coop.co.uk/loneliness