How are Asian co-operatives championing sustainable development?

If you think cooperative groups are limited to small grocery stores in small towns, think again.

In 2020, the world’s 300 largest co-operatives reported a combined turnover of US$2.1 billion, according to the World Cooperative Monitor.

Forty-eight of the top 300 cooperatives globally are from the Asia Pacific region.

Co-operatives are also a force to be reckoned with in terms of their membership and employment strength. According to the International Co-Operative Alliance (ICA), more than 12 per cent of humanity is a member of any of the three million cooperatives around the world.

Co-operatives also contribute to sustainable economic growth and stable, quality employment. They provide work for 280 million people across the globe, or 10 per cent of the world’s employed population.

A co-operative (co-op) is a membership-based business that is democratically owned and controlled by its members, to meet their shared needs. The members can be its customers, employees, residents or suppliers, who have a say in how the co-op is run.

Every co-op around the world shares the same principles and values, such as self-help and self-responsibility. Most co-ops have social missions to benefit the local community in which they operate. For instance, consumer and services co-ops help to moderate the cost of living.

Sustainability has been recognised as one of the five pillars of the ICA Blueprint for a Cooperative Decade, which aims to position co-ops as builders of economic, social and environmental sustainability. The theme for this year’s International Co-Operative Day is “Cooperatives: partners for accelerated sustainable development”.

While corporations tend to hog the limelight for their sustainability efforts in recent years, advocates claim that co-ops are inherently more sustainable.

The argument goes that the co-op structure, in which workers or members own the business equally, makes them more democratic than corporations, and therefore more community-oriented.

“The strength of co-ops is that they are tied together by a shared vision to achieve a collective greater good, such as improving the lives of the community,” said Yam Kai Chi, head of department, Management and Organisation, at the National University of Singapore (NUS) Business School.

In addition, almost all co-ops are initially founded to address some sort of societal ill, making them predisposed to tackle issues beyond the scope of traditional business, said Lawrence Loh, director of Centre for Governance and Sustainability at the NUS Business School.

However, from a management perspective, co-ops face additional challenges in their need to carefully balance economic, social, and resource management goals.

“Decision-making becomes more complex, as co-ops are usually trying to optimise multiple outcomes at the same time,” said Yam.

“Though participatory and democratic decision-making has the potential to empower members’ voices — by giving them opportunities to express their concerns and opinions and be heard — the accompanying challenges such as long and drawn-out decision-making processes and a lack of clear accountability may pose a risk to the co-op’s competitiveness and ultimately, sustainability,” he added.

To commemorate International Co-Operative Day on 1 July, Eco-Business has highlighted five co-ops in Asia and their work championing sustainable development in the region.

The role of co-operatives in sustainable development is nowhere more relevant than in relation to food.

Of all business sectors, it is in farming and agriculture where the co-op business model is most widely utilised (co-ops together have an estimated 32 per cent of global market share of the agricultural sector).

The world’s largest fertiliser co-op is the Indian Farm Forestry Development Cooperative (IFFCO), which is also the world’s largest co-op, ranked by gross turnover over gross domestic product per capita.

Established in 1967, the co-op has more than more than 36,000 cooperative members and distributes its dividends to about 55 million farmers.

In 2019, IFFCO introduced ’nano-technology’ based products – nano nitrogen, nano zinc and nano copper for on-field trials to cut usage of chemical fertilisers and boost farmers’ income.

These nano-fertilisers contain elements critical for plant development, in the form of granules that are a hundred thousand times finer than a sheet of paper.

These environment-friendly products have been introduced for the first time in India and could potentially reduce usage of conventional chemical fertilisers by 50 per cent while raising crop output by 15-30 per cent, according to IFFCO.

Chemical fertiliser overuse can cause soil acidification and soil crust, and may even lead to the release of greenhouse gases such as nitrogen that exacerbate global warming.

In 2021, IFFCO launched the world’s first nano urea fertiliser and it has sold more than 57 million bottles of it in India since.

A small bottle (500 ml) of nano urea is equivalent to one 50 kg bag of granular urea currently used by farmers, said Indian prime minister Narendra Modi, while inaugurating a nano urea production plant at Kalol, Gujarat, India in 2022.

This year, IFFCO signed an agreement with California-based Kapoor Enterprises Inc to export nano liquid urea to the United States.

Japanese Consumers’ Co-operative Union (JCCU), the largest consumers’ organisation in Japan, was established in 1951 as a national federation of consumer co-ops in Japan.

Today, about 320 consumer co-ops and consumer co-op unions are part of JCCU and the total business turnover of the member co-ops is about US$24.3 trillion.

In 2021, JCCU launched the “CO·OP Sustainable” product series, which comprises sustainable agricultural, forestry, livestock, and seafood goods and CO·OP Brand Products.

Starting this year, JCCU will also affix the Alaska Responsible Fisheries Management (RFM) certified eco-label to fish roe, salmon and trout products made from ingredients caught in sustainable fisheries in Alaska.

Alaska RFM is a certification programme developed for fisheries that harvest wild-captured seafood resources.

It indicates that the certified seafood was caught in a sustainable fishery in Alaska under responsible fisheries management.

The Lamac Multi-Purpose Cooperative (LMPC), which celebrated its 50th anniversary this year, was started by a group of farmers in what was then a secluded and isolated valley southwest of Cebu, the Philippines. Half a century on, it has transformed into a full-fledged multi-purpose co-op which employs 300 people.

LMPC’s sustainability initiatives include a 48-hectare reforestation area where the members planted 25,000 seedlings of rare species such as narra.

LMPC also operates a zero-waste coconut hub which decorticates 15,000 coconuts daily to produce sugar.

The facility recycles coconut husk into coir (a raw material used to make ropes), hard coconut shell into charcoal, and coconut water into vinegar.

The National Trades Union Congress (NTUC), Singapore’s sole national trade union collective, runs the country’s largest supermarket chain, NTUC FairPrice, which has more than 100 supermarkets across the island.

In an industry first, the supermarket chain launched an index in 2015 to track its food waste reduction efforts. The index measures the annual total food waste it produces against the total retail space of all its stores.

In 2022, NTUC’s supermarkets and pharmacies generated 3,374 tonnes of food waste, measuring 14.9 kilograms/square metre (kg/sqm) on the FairPrice Food Waste Index, an improvement from the 16.9kg/sqm recorded in 2021.

Additionally, FairPrice has been bundling imperfect produce for sale in stores starting with the launch of its “Great Taste, Less Waste” campaign.

Today, FairPrice offers S$2 (US$1.50) bags of imperfect produce at all its stores islandwide. The initiative has enabled FairPrice to save about 1,033 tonnes of fruits from going to waste in 2021.

Bank Rakyat was established in 1954 with the aim of helping low-income earners in Malaysia gain access to capital.

Today, Bank Rakyat is the largest Islamic cooperative bank in the Southeast Asian country.

As part of its efforts to encourage renewable energy use, Bank Rakyat announced this year that it would be expanding its offer to help more Malaysians purchase and install solar panel systems.

Bank Rakyat also offers i-Vehicle Financing for purchases of hybrid electric vehicles (EVs) and battery-based (e.g. fuel cell) EVs.

Prospective property owners in Malaysia can also tap on Bank Rakyat’s Housing Financing-i system to purchase properties recognised as green buildings by green rating tools Green Building Index or GreenRE.