Agenda

1. The Credit Union Opportunity: Success Through Leadership and Purpose Presented to the CUCCJune 26, 2014Presented by: Chris Coulterchris.coulter@globescan.com

2. Agenda • Introduction • Business & Society • The Business Case for CSR • Leadership • Seizing the Opportunity • Discussion

3. Multiple Sources of Evidence +

4. Key Points • Urgent action required: we need to accelerate progress in sustainability • Ongoing pressure: growing expectations for responsible business and government regulation, declining trust in business • Opportunities exist: consumers and employees are looking for companies with corporate purpose • Recognized leadership: time is right to build integrated sustainability strategies that mobilize stakeholders internally and externally

5. Business & Society

6. Accelerating sustainability • Too many indicators going the wrong – urgency to change tack • Scale & speed of progress required means we must address challenge of systemic change • Collective success will come from a more enabling context • Governments unable to lead; NGOs are not powerful enough; investors and consumers not yet engaged – it falls to business

7. Canadians have low trust in business, especially CU members CU members much more distrusting of Canadian companies: -15 vs. -2 net rating 4t. Please tell me how much you trust each of the following institutions to operate in the best interest of our society. Would you say you have a lot of trust, some trust, not much trust, or no trust at all in…?

8. Massive decline in trust in Canadian companies Trust in Institutions Net Trust,* Canada, 2001–2014 *Net trust equals “a lot of trust” and “some trust” minus “not much trust” and “no trust at all” 4t. Please tell me how much you trust each of the following institutions to operate in the best interest of our society. Would you say you have a lot of trust, some trust, not much trust, or no trust at all in…?

9. Why companies are trusted John Lewis- Because they provide a good service and they pay their staff well Gazprom - It participates in charity/ has positive attitude toward children Microsoft - They've had a very good relationship with their employees Unilever– Because they hold competitions of ‘green and clean’ between villages Coca-Cola - They use their profits in reforestation Toyota - What makes them trustworthy is transparency, if you have that you are trustworthy. Zoomlion - Waste managing and clearance

10. Why companies are distrusted Gazprom - Prices are going up all the time. With natural resources which our country possesses, each person could be a millionaire BP- After the disaster, oil leak, they tried to get out of it, and later had to generate a PR agenda, just to clear their name. H&M - With honest work you cannot offer those prices. I think they promote/use child labour. Peugeot- Thinking more capital than workers Walmart - It is absolutely horrible to its employees. Sanlu- Babies have been poisoned by its milk powder Safaricom - It steals from the public through hidden charges Ripley - Exploits their employees / pays low salaries LapindoBrantas - Damaging the environment

11. Profiteering, ethics, and greed top list of issues banks should address Issues Financial Industry Should Most Address Top Mention, Canada, 2014 Q13t. And what about the Banking/Financial Services industry - what is the most important issue it needs to address?

12. Fall in perceived responsibility of banking industry has stabilized after crisis years Q23bt. Please rate each of the following types of companies on how well they fulfill their responsibilities to society. Compared to other types of companies, would you say [INSERT COMPANY TYPE] are? -

13. The need for integration, understanding and narratives

14. The Business Case for CSR

15. High Expectations: plurality increasingly believe that companies should have extended role Q6t. People have different views on the role of large companies in society. In your view, should large companies?

16. Values: CU members more concerned about core social and environmental issues ‘Very Serious’ Challenge Credit union members vs non-members, 2014 Q3t. I am going to read you a list of possible challenges in our society. For each, please tell me how serious a challenge you think it is

17. Regulatory Pressure: support for greater regulation around CSR continues to grow Q8t_dt. Please tell me if you strongly agree, somewhat agree, somewhat disagree, or strongly disagree with each of the following statements. – Our government should create laws that require large companies to go beyond their traditional economic role and work to make a better society, even though this could lead to higher prices and fewer jobs.

18. Human Capital: majorities of corporate employees report being motivated by CSR Q8t_gt. Please tell me if you strongly agree, somewhat agree, somewhat disagree, or strongly disagree with each of the following statements. - The more socially responsible my company becomes, the more motivated and loyal I become as an employee.

19. Consumers: ?

20. MEET THE ASPIRATIONALS

21. Consumer segmentation that aligns marketing and sustainability

22. Aspirational are everywhere % of Population Who Are Aspirationals18 Countries, 2014 China 51% Russia 47% Germany 23% UK 41% Canada 41% USA 34% France24% South Korea 53% Spain 32% Mexico 21% Indonesia 46% Pakistan38% India 58% Peru 42% Brazil 33% Nigeria 43% Australia40% Argentina 21%

23. Credit Unions unique opportunity Status Quo Credit Unions ‘Catalyst for good’ ‘Catalyst for good’ ‘Do no harm’ ‘Do no harm’

24. Leadership

25. State of recognized leadership in Canada Most Socially Responsible Companies Canada,2014 24t Please name a specific large company that comes to your mind as fulfilling its responsibilities to society better than others – in other words, is a “responsible company”. Can you name another? 27t Please name a specific large company that comes to your mind as doing a POOR job of fulfilling its responsibilities to society; in other words, a company you see as NOT being a responsible company. Can you name another?

26. Unilever increasing its lead

27. Stakeholders point to companies with an integrated CSR strategy and branded platform Sustainable Living Plan “Don’t Buy this Jacket” Mission Zero Plan A Creating Shared Value Nike Better World Ecomagination/ Healthymagination People & Planet Positive Live Positively / Me We World

28. Leadership Framework Vision & Strategy • Big idea: aspirational vision • Ambitious galvanizing goals • Business and sustainability strategy alignment • Transparency • Dialogue and collaboration • Branded platform Integration & Performance Engagement & Communications • Targets & metrics • Programs & initiatives • Embedded across business

29. THE CHALLENGE:MANAGING COMPLEXITY, DEFINING WHAT WE STAND FOR AND COMMUNICATING THIS IN AN INTEGRATED AND ALIGNED FASHION

30. Seizing The Opportunity

31. 1. Scale a coordinated big idea Complexity

32. 1. Scale a coordinated big idea: a purposeful platform to deepen commitment, clarify what you stand for, and align with broader business and societal goals Big Idea …What do you stand for? Ambitious Galvanizing Goals …Why should stakeholders care? Complexity …How do stakeholders know? Targets & Metrics …What do you mean? Programs & Initiatives …Why do you care? Materiality & Stakeholder Expectations

33. 2. Align for success: stronger internal (and external) alignment allows for better management of risks and opportunities

34. 3. Expand communications and engagement to ensure ROI on CSR: recognized leadership delivers reputation equity, brand equity and talent equity • Reputation Equity:Greater opportunities for partnerships, more influence on policy and better risk management • Brand Equity:Increased market share, enhanced customer loyalty and brand value • Talent Equity: More motivated work force, higher employee retention and increased talent attraction

35. What Are We Going to Choose?