Co-op to spend £70m on ethics drive in the slumpMarch 2009
The UK’s Co-operative Group has set aside £70million ($100m) for the next financial year to advertise and promote its ethical credentials during the recession.
The British group, with interests in food, funerals, travel, pharmacy, motors, financial consultancy and legal services, said the decision to spend record amounts on publicizing its ethical stance was a direct result of the financial crisis, which it believes has put a premium on responsible business behaviour.
Chief executive Peter Marks maintained that because consumers were increasingly disillusioned by the behaviour of many businesses, there had ‘never been a better time’ for the company to promote its ethical credentials. The campaign, based around a series of television and press advertisements, will emphasize the ‘increasing relevance of our ethical way of doing business’.
The Co-operative Group, the UK’s largest mutually owned retailer, says it is in good health despite the recession, and has enjoyed 12 successive quarters of like-for-like sales growth. It has signed up more than a million new members since 2006 when it reintroduced its dividend, which returns some profits to consumers in the form of stamps redeemable for goods.
The group employs 85,000, has three million members and runs more than 4300 retail outlets. It is the UK’s fifth largest food retailer, the third largest retail pharmacy chain, and the largest funeral services provider in the country.
Mark Line, executive chairman of the UK-based Two Tomorrows consultancy, which conducts ethical audits of Co-operative Group activities, said the campaign could be ‘hugely significant’ because it suggested businesses can turn a strong corporate responsibility record to commercial advantage.
‘While some commentators might imagine that sustainability should take a back seat as the country struggles with economic turmoil, the Co-operative is demonstrating it is the key to moving business forward,’ he said.
Alan Knight, the UK government’s sustainable development commissioner and a CSR adviser to several large companies, said: ‘Advocates of sustainability should be looking at how they can use the recession to their advantage. We should exploit the downturn to really raise the level of debate on sustainable development.’
All parts of the Co-operative appear to be holding up well. Co-operative Bank executives claim its ethical policy combined with its long-standing mutual status is largely behind a 40 per cent jump in retail deposits since the beginning of 2008 and a 65 per cent increase in the number of current accounts during the same period. Co-operative Financial Services is expected soon to complete a £1.7billion ($2.4bn) takeover of the Britannia Building Society, taking its assets to £70bn and the number of customers to nine million.
The Co-operative has become the first UK supermarket to stock Fairtrade Palestinian olive oil, the first product from Palestine to receive Fairtrade certification.
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