Mutuals are well-positioned to fulfil the growing public demand for businesses that prioritise societal and environmental wellbeing, according to research from the Social Market Foundation (SMF).
According to the report, the public believes that traditional firms neglect their social obligations in favour of increasing profits.
Mutually-owned businesses, on the other hand, are seen favourably because of their capacity to put members, staff, and local communities first. The SMF study, which was carried out in collaboration with Nationwide Building Society and Royal London, emphasises the necessity for mutuals to address issues and raise awareness among the general public.
The report’s findings highlight a sizable window of opportunity for mutuals to grow and inspire conventional companies to increase their social impact.
But hurdles exist due to factors including insufficient knowledge and restricted access to money. The SMF makes recommendations for policy modifications and enhanced financial rules to strengthen the mutuals industry without compromising its fundamental values.
Mutuals, which include co-ops, insurers, building societies, and credit unions and number about 31,000 in the UK, have the ability to significantly impact society and close the gap between consumer expectations and corporate practices.
Social Market Foundation senior researcher Jake Shepherd says: “The public increasingly wants businesses to do better on sustainability, social responsibility, and ethical sourcing, and not just prioritise profits for shareholders. Mutuals are built to satisfy that appetite for a better way of doing business and our research shows that people strongly value the mutual approach.
“Anyone who cares about public faith in the market economy should take an interest in mutuals, which are perfectly placed to satisfy public desire for more responsible, more caring business practice.
“Unfortunately, not enough people are aware of mutuals, and mutuals tend to have less firepower in the market compared with proprietary firms. Meanwhile, financial legislation and regulation makes it difficult for some mutuals to thrive. To capitalise on the opportunities mutuals present to members, the economy, and wider society, these challenges should be addressed.”
Nationwide and Royal London chairman Kevin Parry OBE says: “Mutuals are a valuable part of a thriving economy. They offer genuine consumer choice and a model distinct from shareholder-led companies. The decline in the UK’s mutual sector has left the UK lagging behind other nations where the sector represents a much more significant part of their economies.
“As the report shows, for a more balanced economy and to encourage choice, we need the sector to grow by encouraging smaller mutuals to scale up and larger mutuals to continue to thrive. Ultimately, this can only be achieved with new financing models. We hope politicians from all sides will put their full support behind the mutual sector.”