International Co-operative Alliance1 Co-operatives As Global Business Enterprises Garry Cronan ICA Director of Communications 8 th Asia-Pacific Ministers’ Conference on Co-operative Legislation and Policy - Kuala Lumpur, Malaysia

International Co-operative Alliance Global Are co-operatives really global business enterprises?

International Co-operative Alliance Global Outline of presentation Global 300 Background and need for such a project Our approach and methodology The first ever global listing of co-operative and mutual businesses – major findings Expanded programme in 2007 Conclusions

International Co-operative Alliance Global 300 4

International Co-operative Alliance Global Background and need for such a project

International Co-operative Alliance Global Why the need for such a list? Demonstrate co-ops work in a business sense in the marketplace Question of visibility Question of being able to prove your case and act on it

International Co-operative Alliance Global Why the need for such a list? Demonstrate co-ops work in a business sense in the marketplace – P articularly in some sectors of the market. Just because they are large does not mean that they can’t still be co-ops or mutuals! – Showing co-op values work and don’t limit business performance – commercial success and solidarity – important to instil confidence among co-operatives themselves that this way of operating works! – Develop good practices models.

International Co-operative Alliance Global Why the need for such a list? Question of visibility – Among co-operatives and mutuals themselves! – With media, particularly the business media – international and national – With business generally – To government and policy makers generally, internationally, regionally, nationally and within industry sectors – To academic and research institutions – To business advisers, accounting/legal etc – To the broader community

International Co-operative Alliance Global Why the need for such a list? Question of being able to prove your case and act on it – Something of a “statistics crisis”, need to give profile to this issue – From rhetoric to evidence base - rigor and compatibility with other databases – Be in a better position to respond to trends, opportunities or threats: e.g. demutualisation

International Co-operative Alliance Global Benefits of Global 300 project Increase the profile of co-operatives, within their own industries, countries and internationally Demonstrate to government and other regulatory agencies the economic importance of co-ops and mutuals Modelling of good practice and highlight successful co-op business models and innovative approaches Create much improved statistical and data methodology to allow for better analysis of performance Establish networks between co-ops and mutuals within Global 300 for greater sharing of information, business intelligence and business opportunities Project is symbolic of a new direction and relevance for the global ICA

International Co-operative Alliance Global Complying the list – some sources There have been three main sources: Extensive web searches Existing databases, at national, regional and sectoral levels plus more general corporate listings Additional material provided directly by individuals or organisations

International Co-operative Alliance Global Existing co-op databases Combination of extensive web based research and accessing some existing databases, e.g. – Global - sectoral ICMIF - insurance NICE – agricultural WOCCU – Credit Unions, ICBA – banking – Regional European sectoral organisations – consumer, agriculture, banking, insurance – National USA – NCB’s Top 100, USDA Co-op Service Canada – Co-op Secretariat UK – Co-ops UK Japan – JCCU Establishing data exchange and research agreements with several organisations, NICE, ICMIF, USDA, NCB etc

International Co-operative Alliance Global Methodology Audited public accounts Revenue – same as NCB’s Top 100 co-op list and other business lists, but this criteria understates contribution of some sectors - will widen the criteria for 2007 Economic unit – where business activities are conducted by independent business units or co-operatives but are consolidated (and audited) as members of a group, turnover of the group, is used. However there is a real issue in relation to dealing with subsidiaries The Global 300 includes a range of co-operative and mutual business structures – which can be classified into at least: – Consortium + federation – Co-operative groups – Companies controlled by co-operatives – Co-operative enterprises – Mutual enterprises Currency – US currency has been used as benchmark with local currencies converted into USD on conversion rate at 2004 FY year end.

International Co-operative Alliance Global Published the following information Rank (by turnover) Name of organisation Co-op/mutual structure Country of origin GCIS Year of establishment Turnover FY 2004 in USD Assets FY 2004 Website address

International Co-operative Alliance Global Some methodological issues Definition of co-operative (mutual) – what to include? Only ICA members or all Do you include organisations which have converted/demutualised since 2004? Need consistency – some databases complied on slightly different basis – establish “global standards” Is turnover the best criteria for ranking?

International Co-operative Alliance Global What have we learnt?

International Co-operative Alliance Global Some real surprises! The aggregate size – larger than many would have thought The combined turnover of the Global 300 is almost USD 1 trillion dollars – USD 963 billion (EUR 755 billion) By way of comparison, Canada the 9 th economy in 2004 had a GDP (nominal) of USD 979 billion Turnover ranges from a minimum of USD 600 million up to USD 53 billion

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International Co-operative Alliance Global What have we learnt - age

International Co-operative Alliance Global What have we learnt - sectors Global 300 are concentrated into three key industry sectors – Agriculture – around a third of the list, (33%) represented in virtually every country showing the universal application and success of this business model – Retailing and wholesaling – around a quarter of the list (25%) – Financial institutions – around 40% Insurance Banks Credit Unions Diversified financial – Other areas represented include energy, health and manufacturing

International Co-operative Alliance Global What have we learnt - countries Countries with the largest total Global 300 revenue: – France – Japan – USA – Germany – Netherlands Countries with the most Global 300 co-ops/mutuals – USA – France – Germany – Italy – Netherlands Countries with high % of GDP coming from Global 300 turnover – Finland 21.1% – New Zealand 17.5% – Switzerland 16.4% – Sweden 13.0%

International Co-operative Alliance Global Do co-operatives make economies more competitive?

International Co-operative Alliance Global What have we learnt so far? Market positions – some examples No 1 retailer in Switzerland and the largest employer Largest European auction co-operative society with almost 40% of Belgian horticultural products Largest independent livestock marketing agency in USA World's largest tree nut processing and marketing company Europe's largest producer of UHT milk UK's largest grain marketing business World's largest miller and marketer of rice Largest soybean processing business in the world One of the largest institutional lenders in Japan Market leader in flower auctions with establishments throughout the Netherlands Europe's largest dairy business One of the top 10 dairy businesses in the world and is responsible for a third of international dairy trade One of Europe's biggest forest industry groups

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International Co-operative Alliance Global

International Co-operative Alliance Global A closer look at Asia-Pacific Country$US Turnover% China3,9512.2% India2,9591.7% Japan140, % Korea25, % Singapore1,9901.1% Taiwan, China1,4880.8% Total Asia176, % Australia2, % New Zealand14, % Total Oceania16, % Israel2,750 Total Africa & ME2,750

International Co-operative Alliance Global Expanded programme in Building a community (network) of global co-op business leaders Developing a web-based global co-op database: consisting of co-op profiles, directories, financials, current news etc Creating a co-op business intelligence service which will include analysis and benchmarking performance, not only financial but also CSR etc Launching of a Global Co-op Business Magazine Holding a series of Global CEO and other related forums

International Co-operative Alliance Global Focus of research and analysis in 2007 – 2009 Five key areas: Financial analysis of performance – balance sheet, P&L etc extending and deepening the Global 300 database to cover more co-ops and sectors CSR and co-op principles – map and benchmark performance Organisational structures used by Global 300 co- ops/mutuals – subsidiaries, hybrid entities, international operations Broader macro analysis – competitiveness, employment, local and regional investment, etc “Developing 300” – apply similar methodology to compiling list, comparative analysis, public policy implications – particular relevance to Asia

International Co-operative Alliance Global Big but also different The first list established that co-operative and mutual businesses are big This year we are looking to demonstrate their difference by examining and documenting how they are operating in relation to Corporate Social Responsibility (CSR) and co-operative principles

International Co-operative Alliance Global CSR today Widely used concept Various definitions Reporting important

International Co-operative Alliance Global CSR Initiatives Many initiatives to report and benchmark CSR Normative – UN Global Compact, OECD Guidelines Measurement – Global Reporting Initiative, AccountAbility AA1000 Assurance Standards, ISO Environmental Management Standard Management Systems – Sigma Guidelines, AA1000 Framework

International Co-operative Alliance Global Examples Co-operativeActivity Membership PPKGO, Coffee Farmers - Indonesia Strengthening community bonds through diversity of Co-op membership, in a region where tensions exist between cultures. Employees and members NTUC Fairprice, SingaporeHelp provide access to education: $500,000 study loans to members employees’ families Campaigning Zenkyoren, JapanActive in addressing serious issues within local communities: Zenkyoren National Traffic Safety Campaign

International Co-operative Alliance Global Examples Co-operativeActivity Environment Krishak Bharati Coopertive Limited (KRIBHO), Gujurat Contribute to sustainable production methods: Set up bio-fertilizer plants and educate farmers about their benefits Foundations Gujurat Milk Marketing Federation – Amul Relief Trust (ART) Commit to disaster relief and community redevelopment: Rs. 50 million collected for reconstructing schools after 2001 earthquake

International Co-operative Alliance Global Where to now Seeking (data) partnerships with: – Co-op/mutual businesses – National co-op apexes – National/regional governments Seeking core and sponsorship funding and in- kind resources – a number of packages available Looking to work together on communications and advocacy highlighting the Global 300

International Co-operative Alliance Global Conclusions Global 300 – exiting new ICA business oriented programme – received overwhelming endorsement from our members and others Signals a new direction and emphasis – the Global 300 programme repositioning the ICA as the global champion and major source of knowledge on the co-operative and mutual business model Project will help drive global, regional and national initiatives on data collection and evidence based policy and advocacy Provides a very powerful communications tool to advance the cause of co-operatives

International Co-operative Alliance Global Thank you Garry Cronan Global 300 Director