banking for community sector organisations

August 2007

Between Environment Protection Authority and mecu Limited Under Section 49AA of the Environment Protection Act 1970

sustainability covenantJune 2008

Between Environment Protection Authority and mecu LimitedUnder Section 49AA of the Environment Protection Act 1970

This voluntary SUSTAINABILITY COVENANT is a statutory agreement under section 49AA of the Environment Protection Act 1970 (the Act) originally made on 29 June 2005 for three years and amended on 8 August 2006. The covenant has been extended for a further 3 years to 2011.

Between:

Environment Protection Authority

(EPA Victoria) of 40 City Road,

Southbank in the State of Victoria;

-and-

mecu Limited (mecu) of

222 High Street,

Kew in the State of Victoria.

in whichEPA Victoria and mecu agree to put in place a transparent framework to enable mecu to move further towards sustainability by:

• Increasing the efficiency with which mecu uses resources to develop and deliver its products and services;

• Helping to alleviate negative environmental and social impacts through its products and services;

• Encouraging and assisting mecu members to live more sustainable lifestyles;

• Applying prudent financial business practices to its operations, to ensure economic and financial sustainability; and

• Supporting developments within the finance sector that encourage others to embrace sustainability.

EPA Victoria is of the opinion that this sustainability covenant is likely to be effective in increasing the resource use efficiency and reducing the ecological impact of mecu and the financial services sector, and as such is a signatory to this agreement.

By entering into this sustainability covenant with EPA Victoria, mecu is demonstrating leadership and innovation as it uses its influence within the financial services sector to work towards the development of more sustainable practices, products and services. The Covenant will also assist mecu to fulfil its commitments under the United Nations Environment Program Finance Initiative (UNEP FI) to which mecu is a signatory.

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what is ’sustainability’?Sustainability is probably best described in the World Commission on Environment and Development’s Brundtland Report. ‘...meeting the need of the present without compromising the ability of future generations to meet their own needs’.

what is a sustainability covenant?This sustainability covenant is an agreement between EPA Victoria and mecu to work together to protect the environment and contribute to a more sustainable society. The agreement is made in accordance with provisions of the Environment Protection Act 1970. This covenant was entered into by EPA Victoria and mecu in June 2005. The first year covenant details can be viewed by visiting the websites of either party.

The covenant was first signed in June 2005 for a period of 3 years. The successful partnership between EPA Victoria and mecu has encouraged the parties to extend the covenant for a further 3 years to 2011. Following a review of the covenant’s action plan and commitments, it has been revised to better reflect mecu’s progress in integrating sustainability into its business.

why mecu embraces ‘sustainability’The Australian retail financial services sector is characterised by intense competition and the dominance of large international, national and regional banks. Consequently, consumer choice is inevitably influenced by price or intangibles such as trust and brand reputation. A powerful, contemporary and intangible driver for building a positive brand reputation is the way a company goes about its business in regard to:• ethics and governance• employee relationships• social impact• environmental impact

Along with economic viability, these four elements make up the core principles of mecu’s approach to business sustainability. Reporting on performance with regard to these sustainability principles will assist mecu to remain transparent and satisfy the needs of stakeholders and enhance our brand recognition and reputation.

executed as a deedthe common seal of the environment protection authority is duly affixed by the chairman on

Date

Michael John Bourke Chairman

The common seal of mecu Limited was affixed to this document in accordance with its constitution in the presence of:

Director

Name (please print)

Director/Secretary

Name (please print)

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about the partiesenvironment protection authority victoriaFor over thirty years EPA Victoria has worked to protect the Victorian environment. As Victoria’s independent environmental authority, EPA Victoria has established environmental benchmarks, reported on progress and alerted the community when environmental quality is threatened.

In doing so, EPA Victoria has established an international reputation as a leader in environment protection and gathered many sources of intelligence at home and abroad to assist in identifying emerging environmental trends and issues and developing effective strategies to address these. EPA Victoria also works successfully alongside industry and the community to achieve its aims, involving and empowering individuals, communities and businesses, encouraging them to take shared responsibility and action.

EPA Victoria operates having regard to the principles of environment protection identified in the Environment Protection Act 1970. These principles integrate sustainable economic growth objectives with social development and environmental stewardship. In particular, these principles reflect the integration of triple bottom line approaches into EPA Victoria’s decision making.

Another of EPA Victoria’s roles is to co-ordinate and promote the activities of the United Nations Environment Programme Finance Initiative (UNEP FI) in Australasia. Established in 1992 to promote sustainable development and environmentally sound business practices across the finance sector, UNEP FI has signed a Memorandum of Understanding with EPA Victoria that allows it to organise and promote activities in the region. This reflects the growing influence that environmental and social issues have on the commercial risks and opportunities in the financial services sector. (for further information see: www.epa.vic.gov.au/Programs/UNEP/default.asp).

EPA Victoria recognises the importance of working with organisations like mecu because mecu has an opportunity to assist its customers to make choices that are more environmentally and socially beneficial.

mecumecu is a financial services co-operative (a mutual company limited by shares). mecu provides its members with banking, insurance and wealth management services.

purposemecu‘s purpose is to consistently and effectively provide its members and their families with value for money, compelling integrated banking, insurance and financial planning solutions, as well as memorable superior service in a profitable and sustainable way.

valuesmecu’s values state that it will:• treat its members with dignity and respect;• value, encourage and support its employees;• operate ethically and with integrity;• apply prudent financial and business practices;• be economically, environmentally and socially responsible; and• care for its communities.

These values are integral to the five key focus areas of this covenant and the planned actions.

objectiveIn line with its purpose and values, mecu aims to become the pre-eminent socially responsible banking brand in Australia.

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mecu’s approach to sustainabilityTo help mecu demonstrate its commitment to sustainability, it:

• became a signatory to the UNEP FI in 2003 and was the first credit union in the world to do so

• entered into a 3 year sustainability covenant with EPA Victoria in 2005 which was extended for a further three years in 2008

• published its first annual Sustainability Report in 2005

To ensure that sustainability is integrated across the organisation, mecu has formed a committee of the Board of Directors, the Sustainable Development Committee, which is supported by mecu’s senior management group. This Committee is charged with directing and monitoring sustainable development progress.

Sustainable development at mecu means adopting systematic and balanced business strategies that satisfy the economic, social and environmental performance expectations of our stakeholders today while protecting, sustaining and enhancing the financial, human and natural resources that will be needed to develop mecu in the future.

To aid mecu’s sustainability strategy and culture, mecu has also formed a staff sustainability reference group called Footprints and has nominated a Sustainability Advisor in each of its service centres.

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Sustainable development at mecu means adopting systematic and balanced business strategies that satisfy the economic, social and environmental performance expectations of our stakeholders today while protecting, sustaining and enhancing the financial, human and natural resources that will be needed to develop mecu in the future.

To aid in implementing mecu’s sustainability strategy and cultural change, mecu has also formed a staff sustainability reference group called Footprints and has nominated a Sustainability Advisor in each of its service centres.

To help mecu demonstrate its commitment to sustainability, it:

became a signatory to the UNEP FI in 2003 and was the first credit union in the world to do so

entered into a 3 year sustainability covenant with EPA Victoria in 2005

published its first annual Sustainability Report in 2005

To ensure that sustainability is integrated across the organisation, mecu has formed a committee of the Board of Directors, the Sustainable Development Committee, which is supported by mecu’s senior management group. This Committee is charged with directing and monitoring sustainable development progress.

UNEP FI Statement commitments integrated in covenant commitments

signatory to United Nations Environment

Program Finance Initiative

EPA and mecu covenant

mecu sustainability

report

covenant commitments addressed in report

report provides information regarding actions taken to meet commitments under covenant

covenant addresses UNEP FI commitments

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operation of the covenant table 1. key areas of activity under the sustainability covenantkey areas, goals and commitmentsmecu’s key activities, goals and commitments are outlined in Table 1. Each key area of activity is aligned with mecu’s sustainability principles, purpose and values.

Each key area includes a set of goals and a schedule of commitments. Implementation and achievement of these will ensure mecu meets its Sustainability Covenant commitments.

mecu and EPA will work collaboratively to implement activities, goals and commitments.

our ethics and governance

goals

• mecu to be transparent and accountable regarding operational activities, products and services.

• Procedures and policies to reflect mecu’s commitment to sustainability and financial responsibility.

commitments

• Continue to improve performance in the economic, social and environment aspects of mecu’s business.

• Implement an Environmental Management System (EMS) across mecu.

• Develop a sustainable supply chain management system as an outcome of implementing an EMS.

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table 1. key areas of activity under the sustainability covenantour employees

goals

• mecu’s workforce to be healthy, diverse, empowered and rewarded.

• mecu’s culture to support its strategic direction and support sustainability innovation by staff and members.

commitments

• Develop a recognition program for those staff who make a significant contribution to sustainability in mecu’s workplace .

• Develop an employee diversity policy.

our social impact

goals

• mecu’s influence as a financial institution and its skills and products to help build social capacity amongst its communities.

commitments

• Renew mecu’s Community Partnership Program to further address issues facing our communities.

• Target up to 4% of mecu’s budgeted post tax profits to sponsoring community partnerships.

• Continue to develop banking relationships with the not-for-profit and community housing sectors with packages that specifically cater for their needs.

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our environmental impact

goals

• The environmental impact of mecu’s operations to be minimised through the adoption of financially viable initiatives to improve resource efficiency, reduce waste generation and reduce natural resource consumption.

• mecu’s products and services to assist members to live more sustainable lifestyles.

commitments

• Optimise opportunities to move from paper-based transactions to electronic and where feasible, in dealings with members.

• Further develop the goGreen® product range to incorporate environmental and social features.

• Implement mecu’s carbon management plan.

our leadership and partnerships

goals

• mecu to provide leadership to the financial service industry in the field of sustainability by demonstrating that environmental and social improvements are part of a successful business strategy.

• mecu to further develop successful strategic partnerships focusing on sustainable outcomes.

commitments

• Attain a “Responsible Investment” accreditation for the purpose of developing SRI markets for the credit union sector.

• Develop a policy on lobbying and advocacy.• Champion sustainability practices in the credit union sector.

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mecu and EPA Victoria will work in partnership towards realising the desired outcomes by jointly contributing to the progress of the Sustainability Covenant commitment actions, managing the overall suite of projects and determining future directions for the Sustainability Covenant.

The steering committee will be made up of two representatives each from EPA Victoria and mecu, of which one is a representative from senior management.

EPA Victoria reserves the right to withdraw from this Sustainability Covenant if, in the opinion of EPA Victoria, it is no longer effective in increasing the resource use efficiency, or reducing the ecological impact of mecu.

This Sustainability Covenant is entirely voluntary and, despite any commitment given in this covenant, mecu can withdraw at any time upon giving reasonable notice to EPA Victoria without giving rise to an action or claim for damages, reimbursement of expenses or compensation whatsoever. It should also be noted that neither organisation acts as an agent on behalf of the other.

In the event that a termination clause looks likely to be activated, both parties agree to instigate discussions about why this might have to occur.

life of the sustainability covenantThe parties have agreed that this sustainability covenant will operate from the date of signing the original agreement on 29 June 2005 to 30 June 2011. The steering committee will review the agreement at the end of each financial year and progress in addressing the commitments outlined in the sustainability covenant will be published in mecu’s annual sustainability report.

management of the sustainability covenant

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other informationIn accordance with section 49AC(c) of the Act, the parties authorise the copying of all or any part of the covenant by any person who wishes to do so. The parties also authorise the use by such a person of any copies made by the person.

Copies of this Covenant and the future annual action plans will be published on the mecu and EPA Victoria websites.

contact detailsEPA Victoria 40 City Road Southbank Victoria 3006

Telephone (03) 9695 2566 Email sustainability.covenant@epa.vic.gov.au www.epa.vic.gov.au

mecu Limited 222 High Street Kew Victoria 3101

Telephone 132 888 Email sustainability@mecu.com.au mecu.com.au

222 High Street, Kew Victoria 3101, Australiamecu Limited ABN 21 087 651 607 • AFSL 238431

BSB 803 140

Telephone 132 888Facsimile 03 9853 9294Email mail@mecu.com.au mecu.com.au

mecu has made a donation to Landcare Australia by

selecting Tudor RP

222 High Street, Kew Victoria 3101, Australia ABN 21 087 651 607 AFSL 238431 Telephone 132 888Facsimile 03 9853 9294Email mail@mecu.com.au mecu.com.au

Printed on 100% recycled Australian paper stock.

40 City RoadSouthbank Victoria 3006, AustraliaABN 85 899 617 894 Telephone 03 9695 2722Facsimile 03 9695 2785Email sustainability.covenant@epa.vic.gov.auepa.vic.gov.au