An insurance company in Devon is celebrating an unusual milestone this year: giving away £ 1 million of its proceeds to environmental projects. It is one of a growing number of companies diverting revenue to progressive causes.
By its very nature, insurance is designed to protect clients against future risks. So why are so many suppliers propping up the same fossil fuel industries that are going to cause so much harm to us and the planet?
This is the question that inspired Matt Criddle to throw Naturesave insurance, Britain’s greenest insurance provider, which has just reached an unusual milestone: giving away £ 1 million of its income.
Each year Naturesave takes 10 percent of the income you receive from your home and travel premiums and places it in a connected charity, Naturesave Trust. The trust reached the £ 1 million milestone earlier this year, some 25 years after it was founded, which is no small feat for a company that employs just 12 people.
That sum equals 13 percent of Naturesave’s total business income since its founding. Through the trust, it has been donated to grassroots environmental projects across the UK through grants of between £ 500 and £ 5,000 each. They have funded bicycle repairs in HM prisons, community agriculture projects, repair cafes, and many more plans that benefit people and the planet.
“The trust primarily funds fairly small but interesting projects, such as community gardens, which often struggle to attract funds from the larger funding agencies,” Criddle explains. “At the moment we are supporting a solar hive project. “
Spread across six sites in southern England, the project features solar thermal hives that use the power of the sun to eradicate varroa mites, which kill bees, without harming pollinators.
When Naturesave Insurance was established in 1993, giving away part of a company’s income or profits was seen as radical, especially the notion that small businesses could choose to do so. It’s still rare to give away such a high proportion, although there is a global trend for companies to become more philanthropic.
In the United States, for example, philanthropic company programs are emerging to help companies distribute their profits in a sustainable way.
Naturesave Trust has funded bike repair projects, community gardens, and other schemes that benefit people and the planet. Image: Naturesave Trust
So what motivated Naturesave to take this route? Criddle is a lifelong environmentalist and entrepreneur. “I wanted to correct some of the mistakes I saw in the insurance industry and build something that was ethical and sustainable,” he tells Positive News.
The “mistakes” include the fact that the insurance industry is the second largest investor in fossil fuels after banks, and also underwrites and insures all new coal mines and oil and gas exploration projects. “All those things that we should no longer be doing can only happen with insurance. If all companies refused to subscribe to coal mines, they would stop opening new ones, ”says Criddle.
The decision to give away so much has helped shape the business, he explains. “First, you attract people who share the feeling that they are doing something meaningful, so you end up with people in the organization who really care. The same is true for our partners: our business and customer relationships are stronger. Our approach has attracted an altruistic and ethically driven customer base who are extremely loyal. “
Our approach has attracted an altruistic and ethically driven customer base who are extremely loyal.
The company also has one of the highest retention rates in the insurance industry – around 96 percent. Customer loyalty is another reason to keep giving away a portion of the revenue. Many have been with Naturesave for over 20 years.
That said, taking such a strong ethical stance means that customers expect a lot. “We cannot operate in a volume-driven ‘call center spirit’, rather we have to treat customers with real care and provide personalized service,” says Criddle.
Certainly Naturesave is on to something. A landmark report from Harvard University in 2013 found companies that practice ‘Compassionate capitalism’ acts 10 times better than the ones that don’t.
Companies that divert profits to good causes perform better than those that don’t. Image: Michelle Henderson
More recently, an investigation by the World Economic Forum concluded that “the usual situation is no longer adequate for the challenges of the 21st century.” The traditional focus on shareholder value is neither right nor fair, he concluded: corporate purpose must be about solutions, not just profit.
A popular initiative to encourage these types of donations is 1% for the planet, a charity platform created by Yvon Chouinard, founder of the outdoor clothing brand Patagonia. The platform encourages companies to donate 1% of their turnover to environmental causes. It was launched in 2002, but has gained popularity in recent years. Some 3,419 companies in 64 countries have registered.
On to blogChouinard wrote: “It is a cost of doing business on this planet. It is not philanthropy, it is an absolute necessity for those of us who live on this planet. It’s the opposite of doing nothing. “
It is not philanthropy, it is an absolute necessity for those of us who live on this planet.
In the UK, EarthBits, an online store that sells plastic-free cosmetics and cleaning supplies, is in the process of applying to join the 1% for the Planet. The company already donates a percentage of its income to finance international tree planting projects, but wanted to go further.
“Today, many companies use sustainability as a marketing tool, as it is becoming very fashionable. Joining these projects is a way of showing that this business is not just a job for us, but a way of life that we fully embrace, ”explains EarthBits co-founder Francesca Castaldelli.
British sustainable toy maker Capikooa, which specializes in making wooden balance boards for children, has an environmental and social mission embedded in its company’s items and is also a 1% member for the planet. Maria Bataller, co-founder of Capikooa, agrees that customers are getting smarter when it comes to choosing which brands to buy from.
Schemes like 1% for the planet allow companies to support environmental projects. Image: Lucian Dachman
“Most of our customers like to know where the wood we use comes from, where it is made, and if they are supporting good causes by shopping with us,” he says.
And the trend is reflected in research. In fact, 81 percent of global ‘consumers’ strongly believe that business should help improve the environment, according to Neilsen’s 2019 Global Responsibility and Sustainability Report.
Back in Devon, Criddle insists that giving away income to help the environment is beneficial to everyone. “In doing so, customers recognize us as a true, forward-thinking company that really tries to make a difference. I think that’s one of the reasons why ethical companies are successful. “
When it comes to customer loyalty, he says, the decision has certainly helped Naturesave: “People have a lot of time for us.”
Illustration: The Project Twins