What makes – or should make – a coop ethical?

I’ve been thinking about what we should, as communities and societies, expect of cooperative businesses when it comes to their social and environmental performance.

Cooperatives want to claim the ethical high ground – but in fact if you look at the current internationally-agreed Co-operative Principles, it’s only the last Principle, number 7, which asserts that cooperatives are something more than businesses run in order to maximise economic returns. And the way this is worded (“Co-operatives work for the sustainable development of their communities through policies approved by their members”) is, let’s be honest, pretty woolly.

The International Co-operative Alliance, the custodian of the Co-operative Principles, has agreed that each of the seven Principles should be accompanied by much more detailed Guidance Notes and it is currently inviting comments and responses for the three Guidance Notes already in draft form, including that for Principle 7. You’ll find the information on the ICA’s website here.

I’ll admit that, as it stands, I’m not wildly impressed by the draft Note for Principle 7. But rather than carping from the sidelines, I thought I ought to get stuck in and offer some thoughts of my own on what such a Guidance Note should contain.

So that’s what I’ve done. My submission to the ICA is focused on the concept of the triple bottom line (social and environmental as well as financial performance) and I try to offer a number of very practical proposals for ways that cooperatives worldwide should be encouraged to meet social and environmental objectives. For example, I propose that cooperatives should commit to meeting the ILO Declaration on Fundamental Principles and Rights at Work (this includes the elimination of discrimination at work and to the right of employees to trade union representation). In relation to the communities in which they operate, I argue for a commitment that cooperatives undertake to pay the full corporate tax due in the country/countries in which they operate, and to formally renounce measures to reduce their tax liability. Some suggestions for good practice in relation to supply chains and to socially responsible investment are also in there.

In relation to environmental good practice, again I’ve tried to suggest a series of practical measures which can be recommended to cooperatives. I also propose that, if a commitment to environmental sustainability is to be core to a cooperative’s business operations and more than ‘greenwash’, it needs to be directly ‘owned’ by a cooperative’s Board of Directors.

If you’re interested, you’ll find my ICA submission on my website here. I also hope you’ll thin of making your own contribution to this debate and consultation. The ICA is giving us a real opportunity to hold a wide-ranging debate about exactly what an ethical cooperative business should mean. It would be a shame to miss the chance.

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