Workers’ co-op challenges BP’s claim of helping the world to get to a net zero future

See the Bloomberg interview here.

BP held a three-day virtual investor event in September to unveil its plans to shift away from oil and gas. Its CEO, Bernard Looney (above), said

“. . . the energy mix is changing – oil and gas are going to be increasingly challenged – and other forms of energy are going to see incredible growth. That is a likely outcome in each of the scenarios informing our strategy – and is reinforced by the pandemic.

“And therein lies huge opportunity for our company. Rewiring and replumbing the global energy system for a net zero future is going to require trillions of dollars of investment. For a company like bp – with our reach, our relationships and our capabilities – reimagining energy is an opportunity to create value – strengthen our resilience – and help the world get to net zero”.

Culture Unstained is a not-for-profit workers’ co-operative founded in October 2016, a member of the Art Not Oil coalition and part of the growing international movement for #FossilFreeCulture.

Through research, engagement and campaigning it aims to end the fossil fuel sponsorship of culture

Chris Garrard, its co-director has written to the Financial Times, refuting its suggestion that BP’s “net zero” ambition is broadly in line with reaching Paris climate goals of limiting global warming to 1.5C.

He points out that, while BP will not undertake exploration in new regions beyond 2030, it will persist with new exploration around existing finds despite proven fossil fuel reserves already being enough to take the world well beyond 1.5C, insisting:

“Fossil fuel production must be all but phased out by 2050 to meet emissions reduction targets, but BP still plans to be extracting fossil fuels by that date, relying on unproven technologies to address the emissions that would be produced”.In their latest post, earlier this month, Culture Unstained reports in detail, supported by snapshots of documents. that emails and meeting notes, released to them following Freedom of Information requests, reveal attempts by BP, Shell and Equinor to sponsor COP26 climate summit, influence its agenda behind the scenes and ‘partner’ closely with the UK government around the summit.                                                                                  Chris Garrard agrees that a shift in BP’s outlook is encouraging, but stresses that until the company’s strategy fully reflects what a 1.5C target demands, it continues to be more closely aligned with climate breakdown than the Paris goals.

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Edgar Parnell: Enterprises that Change Lives

Edgar Parnell’s latest book will be of interest to any serious student of the co-operative and mutual movement.

In it, Edgar (left) sets out to provide all those involved in all kinds of self-help enterprise (SHEs) with clear guidance on how to run successful enterprises that achieve their purposes and serve their members.

There are two versions of Enterprises that Change Lives, in a range of formats. The UK English version is available at a site which offers the chance to read several pages of the book. A  US English version is available here.

Millions of people worldwide are members of mutually-owned enterprises that can positively change their lives. Together, they control their self-help enterprises (SHEs), such as cooperatives, credit unions, savings & loan associations, mutual insurers, building societies, friendly societies, community enterprises, and many other types.

This distinctive form of enterprise help members to get a better deal by intervening in the market in their best interest, while providing an organization that exists to serve them, helping them, their families and communities to build a better future.

SHEs work for people with widely differing needs; for example, marketing produce, supplying farming inputs, getting healthy food at fair prices, accessing financial services such as credit and savings, insurance and mortgages, providing decent housing, health, and care services, maintaining shops, pubs, and transport in their local area, or by managing their workplaces.

This book specifies the model of enterprise required, sets out the systems and the culture needed to ensure that they are fully effective, but does not advocate doctrinaire approaches; it provides essential concepts and tools that transform how to organize and manage SHEs.

The intention is to help leaders think-through the issues involved so that they can make better decisions, for, without the proper organization and systems, it’s highly unlikely that even the most enthusiastic leader will make a success of their enterprise.

The model specified takes account of centuries of international know-how and encapsulates the ‘foundation practices’ that sustain this form of enterprise. It is designed to ensure self-help enterprises focus on achieving their real purpose and work in the best interest of their members. The book also explains why individuals, communities and nations need SHEs if they are to prosper and what policy-makers, community-developers, and academics can do to help grow and sustain them.

 

 

 

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Scotland The Bread: building a home-grown grain economy

Co-operative & Community Finance gave a loan to Scotland the Bread, via the Just Growth Fund, which focuses on supporting businesses connected with community food and farming work. Scotland The Bread, a Community Benefit Society, ensures that their work to improve the country’s staple food is focussed on people not profit.

Scotland produces far more wheat than is needed to make all the bread eaten in the country, but little, if any, is used by local bread makers. What isn’t fed to animals, distilleries or cars (as ‘biofuels’) is bought by large milling conglomerates for industrial bread production to supplement imported wheat.

A government statistics report says that Scottish wheat is mainly soft wheats that are used mostly for malting and it imports hard wheats for milling, generally used for bread-making, because the country’s climate does not suit hard wheat varieties.

Scotland The Bread is supporting six groups to grow their own healthy bread, from the soil to the slice. The plan is to provide seed from three Scottish heritage wheat varieties that look promising and help each group through a year of growing, milling and baking. Small-scale portable equipment to sow, thresh, clean and mill the home-grown grains will be provided.

In order to produce more nutritious wheats, suitable for low-impact farming, a group of interested people from all parts of the food system, from plant breeders to public health nutritionists has been convened.

A joined-up carbon reduction strategy

Agriculture and food processing account for 18-20% of UK annual greenhouse gas emissions, so it makes sense to reduce the distance wheat travels – across the seas or just between field and plate – to limit the use of fossil fuel-dependent inputs and to reduce the energy intensity of processing.

Local bakeries, rooted in their communities, can supply fresh, properly fermented bread to nearby customers, conserving nutritional value without recourse to the synthetic additives that are deemed essential for long-distance loaves.

Better grain and better bread could help to solve Scotland’s growing health problems

The soaring cost – both personal and financial – of diet-related ill health in Scotland makes creative action urgent.

To build health and food sovereignty requires better grains, less intensive processing and more connection between producers and bread eaters. Research to find more nutritious wheats, suitable for low-impact farming, is under way.

‘Fair trade’ arrangements are needed between farmers, millers and bakers to ensure equitable rewards and honest prices that also allow for the variability of the weather which affects grain quality.

Growing more bread wheat in Scotland would contribute to food sovereignty in an unpredictable global marketplace and, depending on how it is done, could bring meaningful jobs back to the country. 

 

 

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Co-op stores to create 5,000 new jobs in a bid to help those who’ve lost jobs in bars, pubs and restaurants

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Neil Hodgson reports today that the Co-op, has announced plans to create 5,000 store-based roles in a bid to provide temporary employment for hospitality workers who have lost their jobs.

Jo Whitfield, Co-op Food chief executive, said: “Whilst our store and depot colleagues are working around the clock to ensure people have the essentials they need, we are all too aware that many people working in bars, pubs and restaurants are currently out of work. It makes perfect sense for us to try and temporarily absorb part of this highly-skilled and talented workforce who are so adept at delivering great customer service, as we work together to feed the nation.

Recruitment procedures have been simplified so that candidates can apply for positions by walking into their nearest Co-op with a view to starting work in a matter of days.

Co-op colleagues in business support roles who are not currently working in stores or distribution centres are also being encouraged to ‘lend-a-hand’ in their local Co-op to help replenish shelves.

The boost in colleague numbers will help stores to replenish stock more efficiently, fulfil online orders and provide ongoing assistance to more vulnerable customers.

 

 

Source: Business Desk North West

 

 

 

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Co-operative Bank signs agreement with the Customer Union for Ethical Banking

The Co-operative Bank has signed a formal recognition agreement with The Customer Union for Ethical Banking, an independent organisation representing thousands of Co-operative Bank customers concerned about the UK’s social and environmental issues (see coverage in The Guardian here).

The Customer Union for Ethical Banking, a member-owned co-operative, was established in 2016 following a successful crowd-funding campaign. It has 10,000 members and supporters who are customers of the Co-operative Bank. It exists to represent customers who are keen to ensure the Bank maintains and extends its unique customer-led Ethical Policy. As a united voice, members can join together to press for the kind of policies and products they want the Bank to consider. The Union and the Bank have been engaging informally for several years and have built a good working relationship.

Not only has the bank got a courteous and efficient customer advocate team (including Justine and Joe) but its Ethical Policy has included a commitment not to bank any business whose core activity contributes to global climate change via fossil fuel extraction or production since 1988. In 2015 it was the only UK bank to sign the Paris Pledge to end financing for the coal industry and in September 2019 the Bank gave colleagues time off to support the Global Climate Strike.

Lesley McPherson Director of Communications Co-operative Bank and Shaun Fensom Customer Union for Ethical Banking, sign the agreement

Earlier this year, the bank agreed to reinstate a special external audit of its values and ethics report after the union raised concerns. That audit – which took place every year since 1998 – is meant to independently assess whether the Coop Bank is actually implementing its policies.

Co-op Bank’s chief executive, Andrew Bester, said: “It’s fantastic that we have a group of loyal customers as committed to our ethical brand as we are – and our regular conversations with the customer union are positive and very valuable in terms of understanding what matters to them.”

 

 

 

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Landmines video: bank policy

The Customer Union for Ethical Banking, an independent organisation represents thousands of Co-operative Bank customers concerned about the UK’s social and environmental issues

Its new video presents a 1997 cinema ad from the bank about the impacts of landmines, intended to raise awareness of the bank’s policy (still going strong 23 years later) not to do business with oppressive regimes or companies that sell them weapons.

Facebook post of the video may be shared or their tweet may be retweeted. The video, which can be found on its website, can be downloaded and shared on other platforms.

 

 

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In an increasingly unstable world, Marinaleda, an Andalusian village, has developed a co-operative alternative

Following the death of General Franco the Union of Farm Workers was founded in Marinaleda and in the first local elections the Workers Unity Collective won nine of the 11 council seats. In 1979, Juan Manuel Sanchez Gordillo, who says he is a communist and communitarian, but has never been a member of the Spanish Communist Party, was elected mayor. He started campaigning for land reforms to benefit Marinaleda’s unemployed and landless labourers, more than 60% of Marinaleda’s inhabitants.

700 people were involved in a 13-day hunger strike against local landowners in 1980 under the slogan “land for those who work on it.” The Cordobilla marsh was occupied in 1984 to demand the irrigation of the El Humoso farm owned by the Duke of Infantado who left the land uncultivated for most of the year while so many were living in poverty. Eventually local activists took over the farm and by 1985 there were at least 100 local land occupations.

In 1991, the regional government awarded the farm and its 1,200 hectares of land to the village. Sean Meleady reports that the village’s agricultural cooperative, established soon afterwards, aimed to grow crops that required the greatest amount of labour, such as olives, green beans, red peppers, paprika and artichokes, in order to create as many jobs as possible. A few years later, Marinaleda built its first processing factory, to can and jar the cooperative’s produce.

Every member of the co-operative earns the same daily salary of €47 (£39.40) for six-and-a-half hours’ work – more than double the Spanish minimum wage. Decisions about the co-operative including, for example, which crops to farm, are made collectively in village general assemblies.

Right: a co-operative worker harvesting olives

For the past 24 years, the farm and the factory have provided employment to Marinaleda’s inhabitants, while all of the cooperative’s profits are invested in the creation of new jobs.

The village’s mayor and members of the local council work voluntarily at the cooperative but have other jobs. For many years, the mayor worked as a history teacher at the local high school.

The village has an amphitheatre, workers’ sports ground, house of culture, vegetable canning factory, a library, a botanical garden and the “Sindactio” trade union bar. Hagar Jobse counted 20 companies in the village: seven privately owned bars, three cafes, two pharmacies and a bridal shop. Although large franchises are not allowed to establish branches in the village, the mayor says he doesn’t want to stand in the way of entrepreneurship – “as long as their businesses do not become too large”. Multinationals are not welcome.

     Mayor Sanchez Gordillo lives in one of Marinaleda’s government-owned houses

The government provides or pays for building materials so that members of the cooperative can build their own house. Prospective residents have to donate 450 days of their own work to the construction of their new homes, getting assistance from professional builders. The hours spent by the resident on construction are then deducted from the total cost of their house — with a monthly payment of €15.52 (£13.20) to achieve ownership. More than 350 homes have been built in this co-operative fashion in a village of less than 3,000 people. Homes have three bedrooms and a patio. However in order to preserve the special character of the project residents cannot sell their homes.

Hagar Jobse reported that Marinaleda has very little crime and few police officers and a later account says there is no police presence and that misdemeanours are resolved by villagers. On ‘Red Sundays’ villagers gather at 8am outside the Sindactio in order to undertake voluntary work., including street repairs, painting and landscaping.

Life in the village is cheaper than in the rest of the region. For 15 euros a month, inhabitants can pay off their mortgage, become members of the sports centre, or have a kindergarten place for their child. The local government provides three free school meals a day and even the small number of unemployed inhabitants are able to make ends meet with the 400 euro jobseeker’s allowance provided by the Andalusian government.

Though the village has its critics, the testimonial of Vicky Shovelton, born and bred in Sheffield, who has lived in Marinaleda for years carries conviction. She has written an account of the village, ending: “The community spirit of my childhood is alive and well here in Marinaleda. This unique village is filled with a sense of togetherness often lacking in today’s society. The concept of how this village has survived through past times and how the vision of the ideal community that it has become, is certainly popular throughout the world. It has created a place that in some respects is an ideal place to be.”

 

 

 

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Independent review finds Co-operative Bank was left “relatively defenceless” by regulators

Ryan Brightwell’s April newsletter from the Customer Union for Ethical Banking, the independent union for Co-operative Bank customers, reports that Mark Zelmer, (right) a former Canadian central banker official, was hired by the UK Treasury and the BoE’s Prudential Regulation Authority to conduct an independent review into the actions of regulators in the run-up to the Co-op Bank’s near-collapse in 2013. It found that the bank’s then-regulator, the Financial Services Authority, left the bank ‘relatively defenceless’ (pages 3 & 32) during the process of the merger with Britannia, by limiting the bank’s ability to walk away from the merger.

KPMG’s audit failings

In the May newsletter it was reported that the Financial Reporting Council (FRC) fined KPMG £5 million for a “series of failings” in auditing the bank: “KPMG’s failure to identify the extent of bad loans made by Britannia in the run-up to its disastrous merger with the Co-op Bank was a major factor in the bank ending up wholly owned by private funds”.

The Customer Union for Ethical Banking welcomed the imposition of this fine but pointed out that this did not address the damage KPMG helped to cause. It proposed that the regulator could instruct KPMG to work with the bank and its customers to develop a plan to return the bank to cooperative ownership – adding “Indeed, the £5 million fine itself would be enough to buy a small but significant stake in the bank and return it to the customers”.

The review published by the Treasury also recorded that the FSA’s write down of IT expenditure over the Review Period, totalling more than £600 million was not fully identified by the stress tests and there should have been a greater and earlier focus by the FSA on reviewing the quality and valuation of the loan book and on ensuring adequate capital was in place to cover potential losses.

Patrick Hosking adds detail, reporting that Mark Zelmer found that the Financial Services Authority’s supervision team:

  • had subjected Co-op Bank’s due diligence process on Britannia to “minimal oversight”;
  • had not paid “enough attention to the refinancing risk” of Britannia’s loan book and the adequacy of its loan loss provisions;
  • had placed too much reliance on risk reviews by outside consultants from PWC, which undertook a credit review review, and on KPMG, the bank’s auditor;

Ryan Brightwell comments that the customers of the bank were let down by management, regulators and auditors alike

He asserts that the priority is to keep campaigning for the bank to be returned to cooperative ownership and to use influence (and Save our Bank’s tiny co-operatively-owned stake in the bank) to make sure customers’ voices are still heard by the bank under its current owners.

Better news

However, he adds, the Zelmer report found an improvement in the bank’s performance in the years since its crisis, noting that:

  • the bank recorded an operating profit of just under £15m in 2018, compared with a loss of £84m the previous year – the first such profit in five years.
  • Mortgage completions were at their highest level since 2010.
  • There was IT investment of £112.9m as the Bank separated its systems from the Co-operative Group.

In an upbeat summary, CEO Andrew Bester said in the Co-op News: 

“In a market that lacks distinctive challenger brands, our commitment to the values of the co-operative movement continues to set us apart and 2019 will see renewed brand investment.”

More information in the FT.

 

 

 

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Employee ownership: Turnberry Rug Works

In 2013, the eight staff at Turnberry Rug Works, which was turning over about £450,000 a year, took control of the firm. John McKerchar was drafted in as managing director after the death of the company’s founder, with a remit to take the business towards employee ownership.

An Employee Benefit Trust was created which initially acquired 49% of the shares. The full balance was purchased by the Trust out of the company profits over the next five years.

McKerchar said: “Most of our team has been with us for two decades. Employee ownership not only rewards their loyalty but gives them a real stake in the business.”

Sarah Deas, chief executive at Co-operative Development Scotland, Scottish Enterprise’s employee-ownership support unit, added: “This is a good move for Turnberry Rug Works which helps to safeguard traditional manufacturing skills. The deal keeps it grounded in its community and shows how employee ownership can sustain businesses and help them to grow”.

Turnberry Rug Works has been making carpets and wall hangings by hand from natural fibres at its converted granary in Ayrshire since 1991. Using the hand tufting technique, they’ve sent rugs as far afield as the Vatican, the Big Brother House and British Embassies all over the world.

They start by putting a canvas on a frame, designs are projected on to the rug backing and then drawn on the canvas. The best quality yarns from merino wool, linen, silk and natural fibre viscose are used and there is a constant search for new and interesting yarns

Compressed air pushes the yarn through the canvass and to lock all the tufts in place a second backing is placed on the back of the rug. Latex is brushed into the backing and allowed to cure. The rug is then taken off the frame and sheared to the required pile height and for some designs outlines can be hand carved to give an eye catching relief

After the rug has been edged and trimmed, the production manager gives it a final inspection before giving it the Turnberry stamp – a guarantee of durability

The company took part in exhibitions in Dundee (2017) & Glasgow (above, 2019)

 

 

 

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