Business and Ethics, are they poles apart?

April 22nd, 2009 by Jim Hopley

Responsible Retailing. Jim Hopley, Chief Executive of the Channel Islands Co-op concludes this series on Responsible Retailing and looks at the local social dividend payable as a result of responsible trading.

If ever there was an activity which ties itself up in knots trying to get a simple message across, it is that aspect of business which, across the board, concentrates on environmental and social objectives.  It is morass of overlapping themes which includes all aspects of responsible business, ethical partnerships and the desire, not only to do the right thing, the best thing, but also to be seen to be doing it. “It”, in this instance being working for the planet, doing the best thing by your suppliers, and the best by your customers.

This is no reflection on the value of any of the many awareness movements, all of which hope to pressure the retail trade (and its customers) to consider the bigger picture, rather than the cheapest price.  It is but a comment on the fractured nature of the message.  This is not the view of a cynic, because I am deeply committed to many of the causes, in particularly the Fairtrade movement, but I am also keenly aware of how confused our customers must be. If we are trying to deliver a social dividend we have to make sure our customers – in the case of the Co-op our members – are well informed and are aware, not only how that dividend is raised, but also and why we are doing it. What is the difference between Fairtrade and the Rainforest Alliance? What distinguishes the various environmental groups adding to the clamour, be it from G-CAN in Guernsey or the Jersey WI with their plastic bag campaign – or be it the government sponsored groups in both Islands – from each other? How do we help them all by concentrating on the main issues without appearing to tum some away? In all this, are we more aware of the messenger or the message? With the National Trust on the Islands, the two Island learned societies and now with the service clubs “not to mention the host of other groups – pushing their own environmental agendas. I sometimes wonder if an umbrella organisation along the lines of the Islands’ Association of Charities could be applied to environmental concerns, but that is a problem for tomorrow.

I mention this as a background to the launch of our own Co-operative Environmental Fund which I see very much an example of paying the social dividend in a local context. We have examined social investment, sourcing goods locally, targeted investment and encouraging customers /members to act in tune with best practice. In all this we make profits which can, in many ways, be re-invested locally. But having announced an environment fund, my point about the fractured nature of this particular sector comesinto sharp relief, for now we have to create, from our own resources, an equitable way of distributing the proceeds to worthy causes.

And as you may have already read in the Jersey Evening Post, the idea behind the initiative was a highly successful and unusual fund raising campaign which drew its potential income from our members changing their shopping habits. Inspired by G-CAN in Guernsey and the WI in Jersey, the Co-operative Society across the Islands promised to donate five pence for every carrier bag saved to a new environmental fund. This was launched on 6 May 2008 and by 9 January 2009 it stood at £60,000 and, as this is an ongoing project, it will amount, I hope, to a great deal more next year.

Taking as our model the Co-op Helping Hands Appeal – about which more, later – we will form a special committee made up of representatives from the main board of the Society as well as from the organisations who inspired the whole initiative, G-CAN, the WI and The One World Alliance, I cannot pre-judge what might decided, but we have £35,000 to give away in Jersey and £25,000 in Guernsey and I envisage, following the Helping Hands model, to see the bulk being used to support those smaller comminute schemes which tend to slip under the radar. Projects which might be seen as very local but which, stepping back, one can see as contributing to the big picture.

Meanwhile the shortlist for this year’s Helping Hands awards has already been announced and well over £15,000 in grants across the Islands will shortly be winging their way to socially pro-active projects which would otherwise pass by unnoticed and unsupported.

These are perhaps the more obvious examples of the social dividend, as the profit generated from a company owned by the people of these Islands has to have a good percentage earmarked for re-investment back into the community, once the funds needed for re-investment and expansion have been set aside.  And when I say ‘owned’ by local people, consider these figures: We have 80,000 plus active share accounts used in our stores and this is from an overall total membership of 105,000.  Most households in Jersey and Guernsey would seem to have a Co-operative Society Member as part of the establishment.  And to these people goes the bulk of our social dividend.  Last year the accounts showed that, for the first time, we had returned over £7 million pounds in Jersey and Guernsey back to our members/shareholders as redistributed profit In broad terms this amounted to about £5.25million in principle dividend with a further £1. 75m coming from the double dividend mid-week shopping days. The vast majority of island families are benefiting, directly or indirectly from our social dividend.  But it doesn’t stop there. We get about thirty letters a week asking us to support local events and charities and, in a small way, we try to give a positive support to all of them: I say “in a small way, as the well is not bottomless and we don’t like to say “no”. We also support small environmental projects, particularly in schools, on an on-going basis.  I could be taken to task for acting way beyond what many would see as the
remit 01 a supermarket group, but this all comes back to my own personal credo about ethical business and responsible retailing, so I make no apology for it.
The Co-operative Movement in the UK commissioned a national research project on what social goals the public wanted to see from a body with aims such as ours. It is too early to be able to analyse the results in detail, but the combination of ethical sourcing of goods and using the power of trade to initiate changes, both in attitude and in practice, across the world is certainly a major concern. This highlights a philosophy, or perhaps an
awareness of campaigns, which can be extended to socially worthwhile causes on an international stage as well as retaining a percentage of the profit gained here in Jersey for worthwhile investment. This money could be used to build up communities are far apart as coffee plantations across South America and Africa, Argentinian and South African vineyard cooperatives, and cocoa plantations in West Africa where child slave labour was once an un-regarded fact of life.
Ethical trading produces profits and pays a social dividend. The enthusiastic embracing of causes such as Fairtrade, and promoting an Institutional awareness of the Stop the Traffick Campaign, shows that our
business activities, our customer support, can be a positive tool for good.  The social dividend can be measured not only in hard currency, but also in influence, internationally as well as locally. Ethical trading and the
resulting social dividend know no boundaries.

This article was first published in Business Brief magazine in April 2009.

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