Sally Uren admires the scale of The Co-operative's sustainability ambitions - and wants it to go further still.
The Co-operative’s CEO Peter Marks (pictured above) is in good company.
He isn’t the only high-profile chief exec calling for ‘another way’. Paul Polman, CEO at Unilever, has publicly said he wants an “equitable, sustainable capitalism”. Ian Cheshire of Kingfisher has argued that “instead of the goal of maximum linear growth in GDP, we should be thinking of maximum wellbeing for minimal planetary input. That starts to challenge business to go beyond efficiency gains, useful though they are, and really redesign their business models”. Even the august Harvard Business Review, in an article on global capitalism at risk (September 2011), has called on CEOs to “fix the system”.
So it’s good news then: we finally have a new breed of business leaders who are using the word ‘sustainable’ alongside ‘business model’. But just what do we mean by a sustainable business model? At its simplest, it is one which delivers commercial success (the familiar bit), and goods and services which have a social value (the harder bit: does everything we think we need have a social value?), within environmental limits (the really hard bit). Right now, many businesses succeed commercially, provide goods and services that improve people’s quality of life – but are using multiple planets’ worth of environmental resources.
So, credit to The Co-operative for coming up with a pretty credible version of a sustainable business model. Its success in cutting carbon, and its new, stretch target of a 50% reduction in emissions by 2020, is indicative of a business serious about reducing its impact on the environment.
In addition, the concept of social value is integral to the business model, both directly through the governance of the business, with its members all benefiting from its success, and also indirectly, through specific initiatives designed to benefit local communities.
There are two more features of The Co-operative’s business which make it stand out from the crowd. The first is that it recognises its role in creating a sustainable society. In the long run, it just isn’t possible to have a sustainable business in an unsustainable society. So a truly sustainable business needs to understand the shifts required in the system around it, as well as in its own operations.
The Co-operative’s pledge to become the first insurance provider in the world to ethically screen all of its general insurance projects is potentially game-changing, and could indeed help ‘shift the system’. By declining to invest its assets in sectors that are not inherently sustainable (such as fossil fuels), The Co-operative could help direct capital investment from companies tied to the past, towards ones better placed to deliver a sustainable future (think renewables).
Now it needs to explain this decision to its consumers, and use that raised awareness to drive positive choice. If it can do so, it will address one of the biggest barriers to mainstreaming sustainability for everyday consumers, which is that they are, by and large, disconnected from the impacts of the products they buy, whether it’s car insurance or a bunch of bananas.
The second stand-out feature is that The Co-operative understands the importance of experimentation, learning what works, and then scaling it up. Thanks to its sheer range of activities, it has been able to experiment in delivering sustainability as part and parcel of its core business – whether for farmers (by ensuring fair prices) or communities (by providing green energy). And through establishing initiatives such as the Enterprise Hub, it is helping new co-ops to benefit from its own experience.
The Co-operative’s business model shows that big can be beautiful and, critically, has the potential to be sustainable, too. But to be successful, The Co-operative also realises that big has to be bold. The huge social, environmental and economic challenges we currently face will not be overcome by a timid business-as-usual attitude. The Co-operative’s big and bold ambition is exactly what we need.
Sally Uren is Deputy CEO of Forum for the Future.