Spotlight: Cooperatives

Illustrations by Dave Murray

Sustainability is an existential issue for cooperatives. By definition, they are meant to be more democratic, to distribute wealth more evenly and to consider the effects of their actions on communities and the environment.

With that in mind, the International Co-operative Alliance has taken on the important task of showing that co-ops are more than the hippie, sentimental little brothers of big business. By bringing together fragmented data for the first time, the World Co-Operative Monitor is showing that co-ops are a valid alternative business model. 

The report shows that over 2,032 co-ops in 56 countries turned over $2.58 trillion (U.S.) in 2011. And while many people may think exclusively of banking and insurance policies when they hear the word “co-op,” most companies are involved in agriculture. A smaller percentage provides health, social and educational services, turning over $20.84 billion in these sectors alone in 2011.

Not only are co-ops managing a lot of money, they have also proven themselves to be resilient during tough economic times – largely due to the fact that when a crisis hits, people often turn to co-ops to help deal with the fallout.

This was especially true during the 2008 financial crisis when cooperative banks, as a group, not only kept comparatively good credit ratings, but also increased their assets and customer bases. Those financial co-ops that were damaged by the crisis are now back on their feet and growing again.

In addition to being stable players in the global economy, co-ops have the ability to shrink economic inequality and address environmental problems simply because they are designed to do so. The values and principles behind co-ops require them to consider the consequences of their actions before the bottom line, making them the ideal business model for the 99 per cent (see page 36).

So, if co-ops are designed to be such outstanding corporate citizens, what makes some better at living by their values than others?

Taking financial (banking and insurance) cooperatives as an example, Corporate Knights’ Top 20 Sustainable Financial Co-ops ranking shows strong sector-wide sustainability performance. But Groupe BPCE, the co-op that took this year’s top spot, is proof that strong grades across many areas may be more important than top marks in just a few.

RankNameGICS Industry GroupFinal Score
1Groupe BPCEBanks85.2%
2Desjardins GroupBanks80.7%
3The Co-operatorsInsurance78.3%
4Menzis Health InsuranceInsurance73.2%
6Crédit AgricoleBanks71.5%
8Mutual Madrilena AutomovilistaInsurance66.4%
11Gjensidige ForsikringInsurance61.9%
12DZ Bank GroupBanks61.8%
13KLP InsuranceInsurance56.7%
17PFA PensionInsurance52.3%
19Groupe Crédit MutuelBanks49.5%
20La CapitaleInsurance46.4%

To view the data used to calculate this year’s ranking, click here

As the second-largest bank in France, Groupe BPCE showed itself to be an efficient user of water and a conscientious generator of waste. Of all co-op banks, it had the highest number of women on its board (and among the highest in executive management) and a relatively low employee turnover rate, indicating a satisfied workforce.

The company pioneered the financing of eco-friendly projects, and its asset management arm, Natixis, is a leader in socially responsible investments. It also stood out as being the best-performing bank on carbon productivity, which it monitors with an innovative carbon audit tool designed specifically for the financial sector.

Disclosure was also one of Groupe BPCE’s strong points. “It disclosed all the necessary sustainability data points for the calculation of all 12 key performance indicators used in this ranking,” said Michael Yow, senior analyst with Corporate Knights Capital. “Only two other financial institutions within the ranking disclosed all data required in the context of this report.”

Groupe BPCE’s biggest weakness? The company had a relatively high CEO-to-average worker compensation ratio – a rich 70:1 compared to 51:1 for second place Desjardins Group of Canada, and 12:1 for third-ranked Rabobank Nederland. The Top 3 insurance companies in the ranking, meanwhile, all had ratios of 12:1 or lower.

Is Groupe BPCE’s chief executive Laurent Mignon getting paid too much? It begs the question.

Click here to go back to the ranking landing page.

Latest from 2014 Sustainable Co-op Rankings

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