Case study - mecu Limited
Summary
mecu aims to become Australia's pre-eminent socially responsible banking brand – a positioning that is consistent with the principles of mutuality and is highly valued by its members.
"Our sustainable development strategy is a response to our ethics, delivering value to our members and differentiation in the market place."
Company Overview
mecu is a member-owned financial cooperative that commits to enhancing its members' financial well-being in a socially responsible way.
With a history dating back 48 years, mecu today has over 100,000 members nationally and assets of over $1.5 billion – making it one of Australia's strongest financial cooperatives.
mecu's core difference is the way it serves its members through a values based system focusing on environmental, social and economic responsibility. This system has been the foundation for the credit union's transformation and growth when it merged (Members Australia and Education Credit Unions) over three years ago.
Key business drivers
- Delivering value to members
- Upholding business ethics
- Differentiation in the market place.
A values driven culture – how Life Cycle Management has become an integral part of mecu's business strategy
Credit Unions were created over 150 years ago as social enterprises in response to community need. The issue was access to low cost credit, and credit unions grew to provide this service based on a vocation or geographic location.
Rowan Dowland, Group Manager Marketing and Development at mecu, explained that when mecu sat down and asked themselves "what do we stand for?" they identified a range of social issues relevant to their businesses that complemented their focus on service, products and profits. These issues included:
- Global warming;
- Water conservation;
- Housing affordability;
- Poverty alleviation; and
- Low levels of financial literacy amongst some sectors of the population.
"We looked to the past to discover our future. Our sustainable development strategy is inline with the way credit unions have always operated - our ethics and is a response to a number of present social issues. It also provides us with an opportunity to differentiate ourselves in the market place. Our approach is reflected in our values, which resonate strongly with our members. Everything we do – both internally as an organisation, and in the products we take to market – is guided by our values," highlights Rowan.
Key challenges
"As we continue to build Life Cycle Management and sustainability into our business model the challenge continues to be "how do we balance the sometimes competing elements of sustainability – social, economic, and environmental considerations."
Developing products like the goGreen® Car Loan definitely provides environmental benefits but also needs to make good business sense and continue to deliver value to members otherwise it wouldn't be sustainable."
Gabrielle McCorkell, Sustainable Development Manager, mecu
What mecu has done
Appointed a Sustainable Development Manager
"I came to mecu to help drive the organisation's commitment to sustainability and act as an advisor to all areas of the businesses on how they can build a framework around environmental and social responsibility," explains Gabrielle McCorkell, mecu's Sustainable Development Manager.
Some key initiatives Gabrielle has put into place over the last year include:
- The development and signing of a Sustainability Covenant with EPA Victoria.
- Establishment of "footprints", an employee committee that develops ideas and brings them to fruition around social and environmental improvement, and instills a sense of ownership in the process.
- Themed months aimed at educating both mecu staff and members about sustainability issues – responsible travel, waste and recycling and water efficiency. Information is included in the mecu member newsletter and visual displays erected in branches.
- Advising on the development of products and community partnerships.
- Engaging with key suppliers around their sustainability policies and practices.
- Implementing a system to measure the environmental and social impacts of mecu's business activities and reporting on our progress to key stakeholders.
- Staff training; and
- Development of appropriate policies such as the Stakeholder Engagement Policy and Environment Policy.
Product leadership and innovation
The way that mecu "does business" is testament to its ethical and ecological approach. mecu has released a number of innovative, Australian first products to the market that clearly demonstrate these values (as listed below). mecu was a winner of the prestigious Publishers National Environmental Bureau Gold Banksia Award 2005 for its product innovation.
goGreen Car Loan: An Australian First: The goGreen® Car Loan encourages members and potential members to purchase more environmentally friendly cars by providing them with a lower interest rate, the higher the car's Greenhouse Rating (according to the Federal Government's Green Vehicle Guide) and the newer the car. mecu also offset 100% of the CO2 emissions produced by the car, for the term of the loan, through tree planting at no additional cost to the borrower. mecu is the first institution in Australia to offer this innovative lending product – one that rewards both the environment and the consumer for working toward more sustainable car useage.
goGreen Home Improvement Loan: mecu's goGreen Home Improvement Loan rewards customers with a 1%
discount off the standard variable loan rate for the purchase and installation of environmentally friendly features into the
home, including solar and wind electricity generation, greywater recycling systems, insulation and rain water tanks.
Now, consumers can care for the environment without the financial sacrifice – it makes green renovations affordable.
Australia's first green credit card: mecu's will soon be the first to market in Australia with a more environmentally friendly credit, debit and redicard. The card material is produced through a chlorine free process, was developed in consultation with EPA Victoria and has been approved by VISA international. The card is first being introduced as mecu's new credit card which has a low interest rate, no annual fees and mecu has made a commitment to their members not to provide any pre-approved credit increases – in line with its socially responsible values.
"In today's competitive market we needed to be known for something, to continue to grow our business."
"Our focus is on building value for our members – and at the same time making them feel like they belong to something special."
"Our sustainable development strategy is an opportunity to differentiate."
Rowan Dowland, Group Manager Marketing and Development, mecu
Key Benefits
mecu is now well into the process of imbedding the principles of sustainability and corporate social responsibility into its operations. Some of the benefits of this approach include:
- minimising risk, further improving the bottom line and creating long term value;
- creating business opportunities;
- maintaining and growing a positive brand reputation;
- improved stakeholder relationships; and
- helping to overcome internal cultural barriers and maintaining staff morale.
Future Priorities
"Successful businesses continually transform themselves in order to remain relevant and create value," explains Rowan Dowland.
"Life Cycle Management, or sustainability is intrinsic to us – who we are, what we do, what we stand for and the value we deliver to the market. We have proven that you can hold very strong values and deliver innovative products to the market based on these values. Plus operate a commercially successful business – the two do co-exist and must do so for us to continue to grow. We increased our profits by
20% last year and member satisfaction increased to 95%.
"Social, economic and environmental responsibility is what we have built our reputation on. Our leadership from within and our people make it happen – we live and breathe our values, and this rings true to our members. And we are excited by the future, taking a leadership role with other credit unions to demonstrate why we should take a stronger stance on sustainability…and that it makes good business sense," concludes Rowan.
