Melina Morrison

Australia’s co-operative and mutual sector has ambitions to emulate its UK counterpart’s planned doubling in size, after recording an 8.4 per cent increase in annual revenue.

The latest National Mutual Economy Report (NME), published by the Business Council of Co-operatives and Mutuals (BCCM), shows continued resilience by the sector against a backdrop of on-going global volatility and stabilising inflation.

The top 100 co-operatives and mutuals posted revenue of $47.7 billion in the year to June 30, 2024, up from $44 billion in the previous year.

Total revenue for the sector is now 38.6 per cent higher than in FY 2021, reflecting consistently robust growth during the post-Covid period and laying strong foundations for continued expansion.

“Australia’s co-operatives and mutuals continue to demonstrate their resilience despite challenging conditions both globally and domestically, reinforcing the strength of this under-appreciated business model,” said Melina Morrison, Chief Executive Officer of the BCCM.

“There is enormous potential for the sector to make an even greater contribution to a more competitive and productive economy, given appropriate regulatory settings and support from government.

“Co-ops and mutuals are already delivering positive outcomes for members and their communities in a number of challenging areas, including affordable housing, aged care and disability support services, regional banking and agriculture.

“We look forward to working with government and regulators to position co-ops and mutuals at the centre of the economic and social agenda, similar to the UK Labor Government’s initiative to double the size of its mutual sector,” Ms Morrison said.

Co-operatives and mutuals have shown remarkable resilience in the face of economic headwinds, reinvesting surpluses locally and maintaining service delivery. Government should look to the business model to help stimulate economic growth amongst smaller Australian firms. Sectors targeted for growth like manufacturing and renewable energy could benefit from co-operatives as a vehicle to scale small and medium businesses.

The top 100 features some of Australia’s biggest unlisted companies including West Australian grain handler CBH, health insurers HCF and HBF, motoring groups NRMA, RACQ and RAC as well as health and financial services group Australian Unity.

The mantle of Australia’s largest co-op again went to CBH, which recorded turnover of $4.69 billion.

CBH’s Chief Executive Officer, Ben Macnamara, said the outlook for the agricultural sector remained strong with a growing WA crop size and global demand for grain remaining strong.

“At CBH, we’re seeing the benefits of sustained investment in supply chain efficiency and infrastructure. That said, volatility is a constant in our industry, whether it’s from global geopolitical tensions or market disruptions.

“Despite this, we must continue to innovate alongside our grower members, remain cost-conscious and ensure that we’re delivering value back to our members, not just in strong seasons but in the tough ones too.”

Steve Laidlaw, the chief executive of Australia’s largest customer owned bank, People First Bank, also highlighted the unique challenges facing the sector.

“Increasingly, Australians are turning to organisations that act with integrity, serve a clear purpose and contribute to their communities.

“That presents a real opportunity for co-ops and mutuals, but also a clear challenge. Customers want to bank with organisations that have a social conscience and do good. However, this is not enough, they also need their experiences to be simple and tailored to their needs. We need to meet both of these elements if we are going to continue to succeed.”

The NME report shows that the top 100 managed assets worth $217 billion, up 4.8 per cent on the previous year, while net profit after tax was $1.87 billion.

Co-operatives and mutuals exist for the benefit of their members, which may be customers, staff, suppliers, or a combination of stakeholders. Unlike listed companies, they are not motivated by the need to maximise profits and pay dividends to investors. Instead, they can use surplus funds to reinvest in services and deliver benefits to members. Eight in every 10 Australians are members of at least one co-operative or mutual.

Outgoing Chief Executive Officer of HCF, Sheena Jack, said the mutual model’s strength lay in “putting people before profits”.

“Our members aren’t just customers—they’re the reason we exist. Every decision we make has our members at the centre. Being part of a mutual like HCF means members benefit directly from the value we create, from lower premiums, more generous benefits, better customer service, and access to health programs that support their wellbeing.”

The NME report shows that Australia’s co-ops and mutuals had combined active memberships of 37.3 million during the 2024 financial year, up from a previous 34.7 million.

There was a total of 1834 co-ops and mutuals, directly employing at least 94,400 Australians. This was a slight increase on the previous year, despite heightened merger activity, particularly among customer owned banks, driven by the need to find scale and efficiencies in a competitive banking environment.

Top 10 Co-operative Mutual enterprises by turnover

 
 
That merger activity has continued in the current financial year with Bank Australia and Qudos Bank set to unite in July, while Teachers Mutual Bank Limited and Australian Mutual Bank Limited, and Regional Australia Bank with Summerland Bank, are considering mergers for 2026.

Commenting on drivers behind consolidation, Bank Australia CEO and managing director Damien Walsh said: “Customer-owned banks continue to face common challenges around economies of scale, replacing legacy technologies and growing cybersecurity threats.

“How smaller institutions balance these competing challenges and drive continued improvements in customer experience will be critical to their future success.”

The post Co-operative and Mutual sector poised for further growth after strong year   appeared first on AdviserVoice.

Damien Walsh

Bank Australia has announced its commitment to achieve net zero emissions across its operations, and lending and investment portfolio by 2035.

The 2035 net zero target is the headline commitment in Bank Australia’s new climate action strategy that sets out its ambitions for the coming decade across the key areas of decarbonisation, climate justice, regenerative finance, and the protection of nature.

The bank is committed to aligning with best practice on net zero for financial institutions as it emerges, including limiting reliance on carbon offsets.

In support of its pathway to net zero emissions, Bank Australia will seek endorsement of its 2030 interim emissions reduction targets across its scope 1, 2 and 3 emissions by the Science Based Targets initiative within 12 months. These science based targets will apply to Bank Australia’s operations, as well as its residential and commercial lending and corporate bond portfolios, which make up 84% of its lending and investment activities.

Bank Australia Managing Director Damien Walsh said that now is a critical time for business to take decisive action and commit to deeper and more rapid decarbonisation of the economy.

“Climate change is the most urgent challenge of our time. At Bank Australia, we’ve been listening to our customers and we know it’s their number one concern, and it’s one we share.

“Our 2035 net zero target is the most ambitious of any bank in the country and makes Bank Australia one of the most ambitious banks globally. We hope our stance encourages other banks and financial institutions to accelerate their climate objectives as well.”

“We’ve set an ambitious target to achieve net zero emissions across not only our operations, but across our lending portfolio. We know that to achieve net zero, we’ll need to work in partnership with our customers to reduce their emissions and advocate for rapid electrification of Australian homes.”

“We’ll also be exploring directly investing in projects that drawdown carbon from the atmosphere through our conservation reserve project and committing to financing $1.5 billion of clean energy transition and conservation by 2025.”

“Our strategy has a focus on climate justice, both for regions transitioning away from fossil fuels like the Latrobe Valley and prioritising First Nations leadership and voices on climate action.

“These targets are bold. We don’t yet have all the answers on how we’re going to achieve them, but we’re committed to working hard and being transparent about our progress.”

The post Bank Australia commits to 2035 net zero target appeared first on AdviserVoice.

Jacki Johnson

The leaders and senior executives of Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies, civil society and academia are coming together to set out a roadmap for realigning the finance sector to support greater social, environmental and economic outcomes for the country.

The Australian Sustainable Finance Initiative has today been unveiled – an unprecedented collaboration to help shape an Australian economy that prioritises human wellbeing, social equity and environmental protection, while underpinning financial system stability, in what it says is a ‘critical decade’ ahead.

Modelled on international best practice already seen in groups including the European Union’s High-Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce, the Australian Sustainable Finance Initiative will be guided by a Steering Committee charged with developing a set of recommendations to enable the finance sector to contribute more systematically to the transition to a more resilient and sustainable economy.

IAG Group Executive Jacki Johnson, co-Chair of the Initiative, said: “The roadmap we create will include pathways, policy signals and frameworks that will better enable the financial services sector to contribute to delivering on international commitments, such as the Paris Agreement on Climate Change and the UN Sustainable Development Goals, while underpinning economic stability and prosperity for Australia.”

An Australian Sustainable Finance Roadmap will be delivered by the Steering Committee in 2020 with recommendations that will assist the financial services sector to:

1. Mobilise capital to deliver on national and global sustainable development and climate goals;
2. Enhance the sustainability, resilience and stability of the financial system by embedding sustainability, climate and human rights considerations into financial markets and products;
3. Ensure better informed financial decision making by enhancing disclosures and transparency on environmental, social and governance risks and opportunities; and
4. Deliver a financial system that meets community expectations around sustainability.

An Expression of Interest process in late 2018 called on experts active in sustainable finance to nominate to be part of the Steering Committee.

The following members and observers were appointed

Members

• Anna Skarbek, CEO – ClimateWorks
• Christina Tonkin, Managing Director Loans and Specialised Finance – Institutional – ANZ
• Damien Walsh, Managing Director – Bank Australia
• David Atkin, CEO – Cbus
• Didier Van Not, General Manager Corporate and Institutional Banking – Westpac Banking Corporation
• Emma Herd, CEO – Investor Group on Climate Change
• Eric Williamson, Executive General Manager, Corporate Finance – National Australia Bank
• Jacki Johnson (Co-Chair), Group Executive People, Performance and Reputation – IAG
• John Hewson, Chairman – Business Council for Sustainable Development Australia
• Mark Joiner, Chairperson – QBE Australia Pacific
• Mark Senkevics, Managing Director Head Australia and New Zealand – Swiss Re
• Matthew McAdam, Director Asia Pacific – Principles for Responsible Investment
• Michael Thorpe, Managing Director Institutional Banking and Markets – Commonwealth Bank of Australia
• Phil Vernon, Managing Director – Australian Ethical Investment
• Richard Brandweiner, CEO – Pendal Group
• Robynne Quiggin, Professor – University of Technology Sydney, Business School
• Sarah Barker, Special Counsel – Minter Ellison
• Simon O’Connor (Co-Chair), CEO – Responsible Investment Association Australasia

Observers

• Geoff Summerhayes, Executive Board Member of APRA, Executive Committee Member of the International Association of Insurance Supervisors and Chair of the Sustainable Insurance Forum.
• Eric Usher, Head of the UN Environment Program Finance Initiative, Economy Division, UN Environment

Simon O’Connor, Initiative Co-Chair and CEO of the Responsible Investment Association Australasia (RIAA), says “Issues such as climate change and human rights have become material to business and the financial services community. Climate change was recently described by the Deputy Governor of the Reserve Bank of Australia as a ‘systemic risk’ to the stability of our economy, and APRA emphasised last week that climate risks are ‘material, foreseeable and actionable now’ ”.

“The financial services sector is both exposed to those risks, as well as having an essential role in funding and underwriting a future Australia, providing the capital necessary to deliver on sustainable development and climate-related commitments. Through a greater alignment between the financial services sector and these sustainability goals, the sector can both deliver for Australians while building a better, more stable and sustainable financial system.”

“This unique and high-level collaboration will set out a roadmap for achieving this goal and shows the willingness of the financial services sector to step up and play an active role in building a more sustainable and resilient economy for all Australians,” said Mr O’Connor.

Jacki Johnson says “a sustainable and resilient economy is a necessity, not an option, and is the foundation for ensuring Australia’s prosperity throughout the 21st century.”

“As we approach 2020, we are rapidly entering a critical decade for managing climate change and other risks,” said Ms Johnson.

“Australia has made a number of commitments to international targets. Achieving these goals extends beyond social or environmental objectives – it’s an economic and financial necessity. Our economy simply cannot prosper in an environment of ever-increasing severe weather events and the subsequent broader impacts these will have.”

“Delivering on these goals requires not just government policy and commitment, but business and finance leadership. Achieving these goals presents a sizeable economic and social opportunity.”

The post Australia’s new sustainable finance initiative appeared first on AdviserVoice.