Co-op Way Re por t 2018 Our ethics and sustainability performance 1 Co-op Way Report 2018 Read more in our Performance Data Report Contents Overview It’s important to our members that their business is run in 3 About us an ethical and sustainable manner. For over a decade we’ve 4 CEO statement been committed to providing members with a comprehensive 5 Our approach to ethics report on our ethics and sustainability performance to help and sustainability them understand how we’re doing on the issues that matter 6 Membership and democracy to them. 7 Co-operation among We recognise that many members want to receive this information in a short summary, co-operatives while others welcome, and indeed require more detail and full transparency on our 8 Community performance, to evaluate how we’re doing. So our report is in two parts: an Overview 11 Ethical trade and a Performance Data Report. and human rights 14 Food and farming Page 8 16 Environment and resource use £39m raised for local 20 Healthy living causes since the launch of our Local Community 21 Health and safety Fund in 2016 22 Diversity and inclusion Page 7 24 Colleague wellbeing Co-op Academies Trust ran 18 academy Performance data schools at end of 2018 28 Performance Data Report 62 Performance against 2018 targets 66 Assurance statement Page 16 33% reduction in our direct greenhouse gas emissions since 2016 Page 13 1st UK retailer to ensure that Fairtrade producers benefit where coffee, tea and bananas are used as 2 an ingredient in our products Co-op Way Report 2018 Read more in our Performance Data Report About us Our main markets We’re the UK’s largest consumer co-operative, with 4.6 million active members and a presence in every postal Food retail Over 54,000 colleagues area in the country. 2,582 Co-op Food stores Sales: £7,247m We’re a major food retailer and wholesaler; we’re the largest funeral provider in the UK; we provide life planning services and sell insurance products. Our businesses are all Insurance1 UK-based and our main support centre is in Manchester. Over 1,100 colleagues Revenue: £323m Since 1844 our Co-op has always been a business with a clear social commitment. We exist to create value for our members and the communities in which we trade and Funeral services, legal can only achieve this by running a successful Co-op. We launched our ‘Stronger Co-op services and life planning Stronger Communities’ ambition at the beginning of 2018: Over 2,000 colleagues 1,049 funeral homes Sales: £317m We’re building a stronger Co-op and Our Annual Report provides more detail. stronger communities By championing a better way of doing business Because we care about the world we share So when you spend with the Co-op it does good Our purpose is championing a better way of doing business for you and your communities. Co-operative values and principles Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity and their members believe in the ethical values of honesty, openness, social responsibility and caring for others. The co-operative 1. Voluntary and 2. Democratic 3. Member economic principles are open membership member control participation guidelines by which we put our values into practice. 4. Autonomy and 5. Education, 6. Co-operation 7. C oncern for independence training and among community information co-operatives 1 At the beginning of 2019 we announced the sale of our insurance underwriting business to Markerstudy for £185m which is expected to complete in the first six months of 2019. 3 Co-op Way Report 2018 Read more in our Performance Data Report CEO Statement Highlights in 2018 included: • We returned £19m back to 4,000 local causes through our Local Community Fund in 2018. Since the fund was launched in 2016, more than 1.2 million members have chosen to support a cause that matters to them. In 2019 we’ll be setting out our community strategy and long-term targets to focus our future efforts on areas where we can have the biggest impact. • A cornerstone of our commitment to ethics and sustainability was put in place with the launch of our Future of Food ambition, setting out our commitments to 2030 for our Food business across a range of issues from product sourcing to treating people fairly. As part of our ambition we set stretching commitments to tackle plastic packaging, including our launch of the UK’s first compostable carrier bag, replacing conventional single- use plastic carrier bags in a move which will remove 60 million conventional plastic carrier bags a year. And in This year we’ll celebrate 175 years of the spirit of co-operation, we’re sharing the information the consumer co-operative movement needed to bring this to market with anyone who wants in Britain. it, free of charge. Further details of how we’ll unite our businesses in our approach to ethics and sustainability will follow in 2019. Today, the challenges we face in our communities, as a nation, and globally, mean the values of co-operation are • W e have a long history of campaigning for social justice. looking more relevant and more urgent than at any time During 2018, we’ve continued our campaigns to tackle in our history. More and more people expect to see big loneliness with the British Red Cross, and to address modern business operate in ways that are both just and responsible. slavery. We’ve also launched a new campaign to help make our colleagues and communities safer. Our business was set up to address unfairness and social injustice through an ethically-driven commercial enterprise We also need to reflect on challenges faced during the year. owned by its members. It’s a model of doing business that Following the disappointing news that the Groceries Code we sum up as the ‘Co-op difference’ and it continues to Adjudicator found that we had contravened the Groceries inspire millions of people all over the world. Supply Code of Practice, we’ve taken decisive steps to ensure we treat suppliers fairly and have taken the issues Our co-operative way of thinking means that traditional which gave rise to this very seriously. measures such as growth, sales and profit are important to us – but not sufficient. Our ambition is far greater. We set out We continue to support the UN Global Compact and are to create ‘value’ for our members in its broadest sense and committed to its ten principles. The Co-op Way report respond to the issues that most concern them. brings together our commitments and our progress as we work to be a business that fully understands the role For us, being a co-op means taking a fully-rounded view we must play in our world. of the role we play in society and the potential impact our business has – both good and bad. I’d like to thank our colleagues and members for their continued championing of the values that have made us a At the beginning of 2018 we began to express our long- truly distinctive business for 175 years… and counting. term thinking as the desire to build a Stronger Co-op and Stronger Communities. We see the relationship between our business and the communities we serve as reciprocal and mutually beneficial. Steve Murrells Co-op CEO 4 Co-op Way Report 2018 Read more in our Performance Data Report Our approach to ethics and sustainability The Future of Food We have a long history of taking the lead on the issues that matter most to our members, from being one of the first businesses recognising the need to tackle climate change, to our many ‘Fairtrade firsts’, and our campaigning for social justice. At the beginning of 2018 we set out our ambition for ‘Stronger Co-op, Stronger Communities’, which is setting the scene for our work on sustainability, ethics and social impact. And this agenda will see even more focus in the coming year, as we look to articulate our story with more clarity and conviction to help people understand our Co-op difference. Setting out our direction and commitments The Future of Food story We recognise that how we source, supply and share food has a major impact and part to play plays out in three chapters – how we source and create in achieving a Stronger Co-op and Stronger Communities. We launched Future of Food in with care, how we treat September, to be clear about our ambition in this space and set our ethical and sustainability people fairly and how we commitments to 2030 for our Food business. The ambition brings together our current learn about and celebrate commitments but also sets the direction of future thinking. Its development involved wide- food together. For each ranging stakeholder engagement, as well as making sure the goals that we have set out have chapter we’ve established our ambitions, and as we build on a distinct Co-op difference, and align with the UN Sustainable Development Goals (SDGs). the Future of Food plan, the targets and initiatives that we We also carried out research on what really matters to communities and our members, report back on will fall under in developing our Community Wellbeing Index. This has enabled us to identify three these goals. focus areas for our community investment: creating and protecting social spaces for local communities; creating inclusive communities through physical and mental wellbeing; and Member engagement is enhancing people’s chances for success by improving their life skills.