Co-operatives UK signs Diversity Forum manifesto
Co-operatives UK has signed up to a bold new way to address equity, equality, diversity and inclusion in the social investment sector – primarily through the Booster Fund.
By signing up to the Diversity Forum’s manifesto for Social Investors, Co-operatives UK joins a growing group of investors committed to achieve sustainable systemic change for more inclusive access to opportunities, support and investment.
The Manifesto has been signed by Co-operatives UK CEO Rose Marley, Chair Don Morris and Vice-Chair Cheryl Barrott.
Amir Rizwan, Diversity Forum Chair, said:
"We are absolutely delighted that Co-operatives UK has signed the new Diversity Manifesto that we launched earlier this year, taking us to a total of 17 signatories to date. The leadership shown by Co-operatives UK and its commitment to holding itself accountable to diversity, equality, and inclusion is much welcomed and we are looking forward to working with them over the coming months and years as they start their journey to become a more diverse and equitable organisation."
"Co-operatives UK plays a vital role to support and grow the network of local place-based co-operatives that are in some of the UK’s most marginalised communities. By signing up to the manifesto they are making a further step towards developing and nurturing a more inclusive co-operatives sector here in the UK."
The principal investments Co-operatives UK makes is through the Booster Fund – investing equity into co-operative community businesses raising capital through community share offers.
Co-operatives UK has invested £3.2m in 58 community share offers to date, with more currently being assessed or in our application pipeline. It has also supported a wider number of organisations with development grants and business support to prepare a community share offer. These grants cover costs like business planning, marketing, surveys and achieving the community shares standard mark.
"Why wouldn’t we sign this?”
As a Co-operatives UK Board member said "why wouldn't we sign this?" – it is the right thing to do.
John Dawson is Head of Market Development for the Community Shares Unit, led by Co-operatives UK in partnership with Locality and Plunkett Foundation. He said: "We know it is a huge privilege and responsibility to manage capital investment and spread opportunity equitably. We want to work harder to help more diverse and disadvantaged communities to explore community shares and the co-operative business model that sits underneath a share offer."
There is also wider societal awareness of diversity, institutional barriers and privilege which Co-operatives UK and other social investors should be mindful of. Not all communities have the same access to resources, social capital and opportunities as others. As such, funders and investors need to plan how to reach people regardless of where they are in their journey.
Action to date
Co-operatives UK is not starting from scratch, nor acting in isolation. The Booster Fund always had the remit to expand the reach of community shares to less affluent communities and different business models and sectors. We have an active squad working on Diversity, Equality and Inclusion, and our Board has discussed opportunities for greater impact in this area.
Colleagues have attended training including the Equality Impact Investing course and recruitment for new panel members to assess applications to the Booster Fund has been targeted to reflect a broader 'lived experience' of people influencing decision making.
Diversity targets are set in funding agreements to encourage applications from less represented groups, including reviewing the application process and the support available through the Booster Fund. This is now more flexible, and for communities needing to take more time or with further to travel on their journey to investment, there is now business development support available before receiving a grant or support to be incorporated.
Perhaps the hardest element for any investor, is risk appetite. The Booster Fund already operates in a unique space in the social investment landscape – often providing capital where other investors and other products like loans just wouldn’t work.
For instance, community shares can reduce a loan to value ratio that a lender needs. Community shares can also be far more patient and flexible. For the Booster Fund a lot of applicants are new-starts, embarking on ambitious capital projects but with little-to-no track record. This is not always easy for a lender to back.
However, risk is not simple and not all about money. As Co-operatives UK invests alongside community investors, there is the reassurance of market demand. A share offer is live market research showing evidence that the community backs a proposition or not, some offers are attracting big numbers of investors. The Sister Midnight share offer – a community group wanting to bring a pub into community ownership in south east London – attracted 865 investors.
Booster Fund investments are not risk free, but a broader view of risk is taken when making decisions on where investments are made so as not to exclude applicants from more diverse backgrounds either – at investment panel or at earlier stages in the application or support process.
We track market data for over a decade, and has in the past surveyed investors to understand some of the baseline. Our Understanding a Maturing Community Shares Market Report, published in October 2020, found there is an over representation of older people investing in community shares. Therefore we are exploring ways to attract applications from groups representing young people, as well as to increase education to encourage investment into share offers by young people.
We also found that 92% of investors were white, relative to 84.8% of the England and Wales population. 41% of investors identified as female, which while not totally reflective of society compares far better than traditional ‘for-profit’ investment.
- Use our privilege of being an investor carefully
- Promote the Diversity Forum manifesto, record and share efforts to make improvements
- Publishing guidance on Shariah compliant community share offers, including new model rules
- Identifying characteristics of diversity where improvements can be made, such as ethnicity, age and gender, and remain open and curious to all forms of diversity.
- Continue to track and publish market data
- Continue to diversify the pool of community shares practitioners delivering support through the Booster Fund
- Showcase innovation – such as the Joiners Arms’ recent pay it forward method of gifting community shares to those who can’t afford them
- Keep reviewing practices and share learning with other social investors
- Keep working with the Diversity Forum to report on progress.
We won’t get everything right, and there is plenty to do. But we aim to be open and transparent about our efforts and to keep learning.
View Co-operatives UK's signed Diversity Forum manifesto.
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