Throughout Co-operatives Fortnight 2018, we’re sharing some of the brilliant stories from UK and international co-ops which show the #coopdifference in action: how, where and why co-operatives can make a difference to you and your communities.
Today, as we celebrate the International Day of Co-operatives, we publish a piece by Ed Mayo, secretary general of Co-operatives UK, about the co-operative contribution to sustainable development.
“What You Can Do, or Dream You Can, Begin It”
John Anster, after Goethe
There is a vision for the world, set down by the United Nations (UN) in the form of a series of targets for the period running up to 2030. The 17 Sustainable Development Goals (SDGs) agreed by UN member states in September 2015 as part of the 2030 Agenda for Sustainable Development offer a powerful shared vision of development. They recognise the complexity of the challenge they represent. They are universal and they are integrated. Above all, taken together, they represent a fundamental shift from a model of development oriented around economic growth to one that aims to be both an environmentally sustainable and a socially equitable model. It can be argued that the SDGs reflect a people-centred model of development rooted in co-operative values and reflected in many cultures around the world, including Japanese concepts of the scope for harmonious co-existence between nature and humankind.i
The ambition of the SDGs can be understood by contrasting them with the previous global goals adopted by the UN – the Millennium Development Goals (MDGs). These galvanised action and harnessed focus and resources, but they were far more limited. The MDGs only applied to developing countries, while the SDGs apply to all countries. The MDGs only addressed development, while the SDGs address sustainable development. The MDGs only addressed specific sectors, whereas the SDGs address the cross-sectoral issues. The MDGs only focused really on the symptoms, whereas the SDGs address the actual causes.ii
The more ambitious the targets, of course, the less guarantee there is that targets that are set will become targets that are met, but the opportunity for the co-operative sector is significant. Here is a framework that visionary co-operatives have been working towards for a long time. In terms of affinity, the match between SDGs and co-operative values and principles is close. Further, what co-operatives bring is not just vision, but the ability to live out that vision in practical, commercial reality. As a recent report, from July 2017, by the UN secretary general says, “co-operative enterprises are in a unique position to help to promote the 2030 Agenda. They are natural vehicles to deliver the collaborative partnership and the people-centred and integrated approach required to attain the 17 Sustainable Development Goals.”iii
Co-operatives could be the business model for a sustainable world, if we now have the ambition to imagine how not just enterprises but whole economies could operate on a co-operative basis.
The co-operative foundation: action that is practical and visionary
The co-operative model can be found to operate around the world, with similarities and with differences over time, adapting to the context and the culture in which it is taken up. One characteristic, common but not universal, is the visionary nature of co-operatives, particularly when founded: they both serve practical action and seek to expand the scope for different ways of acting. Early co-operative pioneers such as Robert Owen, who started work at New Lanark, Scotland over 200 years ago, saw in co-operation the opportunity to restore a balance between people, that had been lost in the great disruptions and inequalities of industrialisation. It is not for nothing that in many countries, co-operatives are called ‘societies’, in that by re-ordering their operations on principles of partnership and equality, they claim that society as a whole can also be organised on the same principles.
One legacy of this tradition is that there is an agreed code of business principles and values that is intended to connect and inform the behaviour of co-operative enterprises around the world. They are built into international guidelines and, in many countries, into national law. These are the co-operative and ethical values and seven co-operative principles set out by the International Co-operative Alliance in its Statement of Co-operative Identity.
The articulation of the values and principles was in itself a fascinating example of deliberation within a movement that is both visionary and practical. The list of values and principles emerged from an extensive global dialogue, involving consideration of values at around 10,000 meetings in different settings across the world. Sven Åke Böök reported on these in Tokyo in 1992 and they were debated by the representative Congress of the International Co-operative Alliance. Perhaps not surprisingly, the findings were too complex to be able to digest, so the mandate was given to a working group led by Canada’s Professor Ian MacPherson to develop a distilled version, of principles and values, that could apply worldwide. The Statement of Co-operative Identity was agreed in Manchester in 1995.
As codified by the International Co-operative Alliance, there are 10 values in all – six co-operative values and four ethical values. The co-operative values – self-help, self-responsibility, democracy, equality, equity, solidarity – describe the design of the business. The ethical values – honesty, openness, social responsibility, caring for others – describe the operation of the business. These are not prescriptive, but guides for action – seen as open-ended, therefore allowing for a deepening of practice over time.
Alongside these are seven principles – three on how co-operative ownership should be structured (such as ensuring that ownership is for those that participate in the business, rather than more distant investors), three on co-operative culture (such as a ‘concern for community’, which means that co-operatives run businesses that make the wellbeing of local people and the wider natural world a priority) and one on the independence of the business as a democratic enterprise. Not all co-operatives, of course necessarily live up to all of these. The Italian research centre Euricse interviewed opinion leaders in the sector in 2013. They commented that, while co-ops worldwide tend to be strict on their structure, they are looser in terms of their culture. Many fail to fulfil at least one of the seven co-operative principles – the least complied with being the commitment to education, training and information.iv
Even so, years before the SDGs were formulated, the Statement of Co-operative Identity – and Guidance – set out the economic, social and environmental dimensions of co-operative activity, predating the contemporary triple bottom line work. Prof MacPherson, who died in 2013, believed that values can serve a bridge between the world you live in and the world you would like to live in. “One can never expect to achieve perfection,” he explained. “The ideal will always be beyond one’s grasp and that is partly what creates the special kind of entrepreneurship one can identify with co-operatives.”v
There are many governmental, business and non-profit groups who endorse the SDGs as the big challenge of our time. The principal opportunity for co-operatives to contribute significantly goes beyond being part of this welcome chorus, it is in exploring and demonstrating how the goals are achieved. There are two practical ways therefore in which co-operatives can do this – through business development and through policy action.
Business development
Co-operatives are businesses and working on the SDGs is not to distract from our commercial success but to focus on it. This is a potential advantage that co-operatives can have over the field of corporate social responsibility, which tends to be viewed as a cost and an add-on rather than integral to investor-owned business. So, at one level, the co-operative movement can best contribute to the SDGs by being more co-operative – in the sense of performing against all of its seven core principles and underlying values. Here is an opportunity for co-operatives to work together at a global level. Out of Canada, for example, the Sobey School of Business at Saint Mary’s University, Halifax, has run two international symposia on performance metrics and accounting for co-operatives. Inevitably, there is a diversity of context to different co-operatives that mean that organisation performance is about choosing from a menu rather than promoting a single set of metrics. But developing that menu, so that there is a rich understanding of the value that co-operatives can create, and the opportunity to benchmark where possible, is something that can be relevant for all or any of the 2.9m estimated co-operatives worldwide.
Through the International Co-operative Alliance, there is a more explicit way too for co-operatives to connect their activities and aims to the SDGs. Co-ops for 2030 is a campaign for co-operatives to learn more about the SDGs, commit to pledges to contribute to achieving the SDGs and report their progress. To date, over 300 pledges, from 100 co-operative organisations in 40 countries, are identified in the platform. A recent report from the Alliance, Co-ops for 2030: a movement achieving sustainable development for all, sets out examples of co-operative action in relation to each of the seventeen SDGs:
- In Japan, the Japanese Consumers’ Co-operative Union has pledged to reduce total CO2 emissions by 40% compared to the level in 2013 by 2030, to ensure thorough energy conservation measures, and to tackle the development of renewable energy supply.
- In Ghana, the Easy Investment Co-op Credit Union, has pledged to generate employment in Ghana through co-operatives.
- In the UK, the Co-operative Group has committed to grow its sales of Fairtrade produce, sourced largely from producer co-operatives in developing countries.
- In the Netherlands, Rabobank’s approach to sustainability is now fully integrated into its vision, strategy, business and reporting, including the SDGs, including a specific core focus on ‘banking for food’.
- In Switzerland, Coop Schweiz is a retail consumer co-operative with a long history rooted in social, environmental and sustainability action. The enterprise integrated environmental protection into its statutes (rules and governing documents) in 1973 and now has 356 actions from across all business areas on sustainability under the theme of ‘Actions not words‘.
- In Canada, The Co-operators has integrated sustainable development into its core purpose, with a vision for the co-op that aspires to be valued by Canadians as: a champion of their prosperity and peace of mind: a leader in the financial services industry, distinct in its co-operative character, and a catalyst for a sustainable society.
- In Finland, the SOK Group has developed a plan of action relating to the SDGs – 100 Acts of Responsibility – that is integrated with a clear and compelling purpose of improving the country as a whole.
The SDGs also call for entirely new business areas to emerge. On one estimate, the SDGs open up an economic prize worldwide of $1tn by 2030, potentially two or three times more. As one example, the market for sustainable food using new technology across smallholder farms is estimated to grow by $105bn as part of this. ‘Ecosystem services’ in forestry are estimated to grow by $365bn.
The opportunities here are around co-operative innovation. Co-operatives, both existing and new, are well placed to be key actors in these new business areas. Co-operatives are trusted not to ‘game the system’. Co-operatives can work at the grassroots in a way conventional businesses, especially multinationals, cannot. Farming technology is a good example, with a key role for data in improving production but also supply chain assurance. This is a natural fit for agricultural co-operatives, with co-operative leaders in some countries showing the way. But to spread the model takes networking and support. In poorer countries, in an African context for example, alongside self-help, there may be a need to pool and champion resources for supporting co-operative business development like this, drawing on success stories in the region.
Policy action
The policy agenda on SDGs is also a key opportunity for the co-operative sector. The relevance of co-operatives to the SDGs can be a policy lever for action. In 2018, for example, co-operatives in Italy across different traditions came together in the national election to call on all political parties to take action to promote co-operative development across a range of sectors in line with the SDGs. Whatever government is in power though, every UN member state already has commitments under the framework of the SDGs and related conventions. Countries will produce national reports on progress, an opportunity to showcase co-operative action. Globally, there is an active framework of governance, where the SDGs are reviewed by the High-Level Political Forum and their finances by the Financing for Development Forum. Some connecting elements, such as COP-21, are legally binding treaties. Each country must produce a Low Emission Development Strategy by 2020.
The review of the SDGs is on a four-year cycle which culminates with a Heads of State review in 2019, 2023, 2027 and then new goals adopted in 2030. In the other years, the SDGs are broken down and reviewed roughly four a year. Over the next twelve months alone, there is therefore a busy policy agenda to look to influence, including the:
- Commission on the Status of Women;
- Financing for Development Forum;
- High-Level Political Forum;
- Committee on World Food Security; and
- United Nations General Assembly in September 2018.
For example, there will be a resolution on sustainable finance that goes through the General Assembly covering recommendations from the 2017 Brookings Report. This addresses rules for Stock Exchanges and for Credit Rating Agencies. The key discussions on this will be held by the G77 in August. It could be of importance to win recognition for the co-operative model, as there are reports that credit rating agencies across the world tend to discriminate against member-owned businesses in their methodologies.
The July 2017 report of the United Nations sets out a series of important proposals for strengthening co-operatives as a tool for achieving the SDGs, including:
- increasing the awareness of the role that co-operatives have in achieving the SDGs;
- generating consistent data on co-operatives to support evidence-based research, especially with regard to the SDGs;
- establishing effective policies, laws and regulations, and
- building the capacity of co-operatives to participate in sustainable development processes at the national, regional and international levels.
Conclusion
Both the business development and the policy action can support each other. There are good examples of targeting decision makers across the Alliance family – such as ICMIF’s micro-insurance programme which is designed to illustrate how co-operatives can be a solution and Cooperatives Europe’s widely shared campaign action on the Future of Europe. Some of the alternatives to co-operative models pushed by national policy, such as Public Private Partnerships, have been called into question – a recent report by the European Court of Auditors for example concluded that the partnerships that they had examined suffered from widespread shortcomings and limited benefits.vi
At the same time, the SDGs cannot be met by co-operative business as usual, where stakeholder responsibility through co-operatives is only a minority of market activity as a whole. One way or another, through business development or policy, a fundamental change in the activity of markets is needed. The challenge of generating human well-being in the context of resource constraints, habitat and species loss and an unstable climate calls not just for co-operative enterprise but whole co-operative economies. These will be new models of wealth creation that are cost saving rather than growth maximising, focusing on two environmental imperatives:
- Resource decoupling – using less land, water, energy and materials to maintain economic activity.
- Impact decoupling – using resources wisely over their lifetime to reduce environmental loss.
This is a complex challenge and it is that unfolding complexity that in turn adds to the urgency and relevance of co-operative models of action. As Cat Tully of the School of International Futures says: “Co-operative governance is a human operating system that is much better able to be innovative and resilient under conditions of dramatic change and uncertainty.”vii
While the discussion on SDGs can become quite technocratic, the implications for the co-operative sector are quite simple. We need the confidence to assert the relevance of our model of business as critical to all our futures and we need the competence to be successful as a sector on the basis of our principles.
Ed Mayo is secretary general of Co-operatives UK, the national apex association for co-operative and mutual enterprise in the United Kingdom, and vice president of Cooperatives Europe, the European region of the International Co-operative Alliance.
Ed is author of two recent books which focus on co-operative enterprises: Values: how to bring values to life in your business, by Routledge; and A Short History of Co-operation and Mutuality, an international history which is free to download, in English and in Spanish (so far) on www.uk.coop/shorthistory
i Iwatsuki, K. (2008). Harmonious co-existence between nature and mankind: An ideal lifestyle for sustainability carried out in the traditional Japanese spirit, Humans and Nature 19: 1−18
ii For an excellent account of the changes, see Dodds, F. & Donoghue, D. (2016) Negotiating the Sustainable Development Goals, by Felix Dodds and Ambassador David Donoghue.
iii See https://ica.coop/en/media/news/co-operative-enterprises-are-in-a-unique-position-to-help-to-promote-the-2030-agenda, accessed March 19 2018.
iv Eid, M., & Martínez-Carrasco Pleite, F. (2014). The International Year of Cooperatives and the 2020 Vision, Euricse Working Papers, 71.
v MacPherson, I. (1996). Co-operative Principles for the 21st Century. International Co-operative Alliance.
vi See https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=45153, accessed 22 March 2018.
vii Personal correspondence, May 2018.
