Canadian insurer The Co-operators aims for sustainability

This article by Andrew Bibby, in a slightly different form, was first published by ICMIF (International Cooperative & Mutual Insurance Federation) in Voice magazine, 2008

Many companies like to claim that they understand their social and environmental responsibilities. When you look a little deeper, however, their commitment to Corporate Social Responsibility often seems to extend no further than to the public relations department or an annual account of recycling or energy policies.

For Canadian insurer The Co-operators by contrast, the pledge to work for sustainability is something that the organisation is trying to take very seriously indeed. “We're sincere in our commitment to becoming a better, more sustainable organisation, and we have begun our journey in earnest,” says Kathy Bardswick, President and CEO of The Co-operators.

It is a journey that, informally, The Co-operators have been making for some time. Formally, though, the start of the process was the Board meeting held in June 2007. Directors had before them for discussion a detailed report, inviting them to adopt a sustainability strategy which would influence all aspects of the organisation's operations. The Board adopted the strategy, and at the same time took another decision. To mark the importance of the move, The Co-operators' vision statement would be amended. As well as seeking to provide financial security to its customers and to contribute to a strong cooperative movement, The Co-operators would now take on a new role, as a catalyst for sustainability in society.

The Co-operators is one of Canada 's leading insurance providers, operating across the country from the Atlantic provinces to British Columbia, and employing in total around 4,500 staff. Its policies offer protection for 845,000 homes, more than a million vehicles and 170,000 businesses and farms. On the life side, 600,000 people have insurance through the organisation. Its turnover in 2007 was close to three billion Canadian dollars (USD $2.9 billion); its assets now total over seven billion Canadian dollars (USD $6.7 billion).

But whilst The Co-operators' financial strength is a undoubted cause for satisfaction, this by itself is not seen as enough. According to Barbara Turley-McIntyre, it comes down to the ultimate point of running an insurance business. “When we talk about sustainability, it's the triple bottom line we mean – economic, social and environmental,” she explains. “A cooperative insurer has to be financially viable, of course - we have to be there to help our customers in hard times. But we're also there for other reasons.” Economic success is not the only criterion.

As Director of Sustainability and Corporate Citizenship, Barbara Turley-McIntyre oversees the implementation of the sustainability strategy put in place by the Board, including the particular focus which has been given to the issue of climate change. As she points out, here is an issue which insurers have a very direct interest in taking seriously. Canada may not get the international headlines when it comes to the worst hurricanes and floods, but nevertheless 2007 was a year of summer storm activity in western Canada, with the inevitable effect on subsequent insurance claims. The Co-operators says that the cost of the damage resulting from natural disasters has doubled every five to seven years since the 1950s. It's a trend which, it points out, is alarming and ultimately unsustainable.

“Whether you're a cooperative/mutual insurer or a shareholder insurer, we're facing those same risks,” Barbara Turley-McIntyre says. But if the economic case is the same for all, cooperative and mutual insurers have another reason to engage in the issue, she believes. “It goes back to our roots. When I think of cooperatives and mutuals, there seems to be an easy alignment between those core values and sustainability. To me it's a natural fit,” she says.

“Given the way cooperatives manage their business, I would say they naturally have an advantage in relation to sustainability. In particular, they are very close to their members,” she adds.

The Co-operators' strategy on sustainability requires the organisation to look at its own operations and internal practices. Among other things, there is a pledge to move towards zero waste, to reduce paper consumption, and to align purchasing and vendor relations with the policy. There is also a commitment to reduce the organisation's carbon footprint, the amount of carbon dioxide and other greenhouse gases created by its activities.

“We don't want to be suggesting to our clients that they should be modifying their behaviour until we've cleaned up our own house, and therefore In our first year we have been measuring our carbon footprint. As an insurance company our footprint might be less than, say, of an extraction company or a manufacturing company, but we still do create carbon. We've engaged an engineering company to measure our heating and cooling systems, our paper use, our air travel usage, electricity consumption and our company fleet, and based on the audit we'll be setting benchmarks for the future. We want to be able to encourage our clients and suppliers - and the Canadian community - to follow suit, but we're doing it first ourselves. “

The Co-operators is also working hard to ensure that sustainability is central to the culture of the organisation. Barbara Turley-McIntyre says she has been very pleased with the obvious commitment to the initiative being shown by employees. “The engagement of our 4500 staff across Canada has been overwhelming. We've got support at all levels,” she says.

The strong endorsement from the very top of the organisation helps enormously here. The Board of Directors has established its own Sustainability Committee, and each Board meeting now receives a sustainability report as a matter of course. All the directors have also participated in an e-learning course on the fundamentals of sustainability, which The Co-operators has devised for use internally in conjunction with the Canadian not-for-profit organisation The Natural Step. A quarter of the staff have already completed the course, and Barbara Turley-McIntyre says that all employees should have had the opportunity to take it by the end of next year. It is also being made available for the cooperative organisations which make up The Co-operators' membership and ownership structure. “It puts us all – staff, directors and member-owners - on the same page when we're talking about the topic,” she points out.

The Co-operators also worked closely with the specialist firm of sustainability consultants Strandberg Consulting during the process of developing the sustainability strategy. The process included consultations with ten focus groups made up of staff members and further focus groups held at the organisation's AGM. A benchmarking exercise looked at best practice in other businesses, including other ICMIF members such as Desjardins (Canada) and Co-operative Financial Services (UK), non-mutual insurers such as Allianz and Aviva, and cooperative businesses in other sectors, such as Canada 's highly successful consumer coop Mountain Equipment Coop. The benchmarking exercise is set to continue: “It's very helpful to compare yourself against other organisations,” Barbara Turley-McIntyre explains.

The Co-operators is also seeking to embrace sustainability in the products it offers, an approach which is designed partly to help educate and motivate the organisation's clients. There have been some direct changes as well: in 2007, one of the insurer's subsidiaries began offering an innovative insurance package for small wind turbines, known as Windsurance.

For The Co-operators, the benefits of its approach are considerable. The insurer says that it helps enhance its reputation and brand, encourages innovation in terms of products and services, helps staff retention and motivation, improves risk management and also leads to cost savings and what it calls ‘eco-efficiencies'. It also helps reinforce the cooperative ethos and culture of The Co-operators, which traces its roots to the decision of four farmers in 1945 to found a new insurance cooperative to help meet their insurance needs.

But whilst these benefits are substantial, they are not the reason why The Co-operators has embraced its strategy on sustainability. “The world has always been fraught with adversity. We are in the wake of what may be our greatest challenge yet – the realisation of our planet's vulnerability,” Kathy Bardswick explains.

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