To understand the importance of mulch one should talk a walk in a woodland. Whilst trees look wonderful when looking up, for this purpose you should look down.
Trees have the original closed loop recycling going on. The leaves fall and compost down adding nutrients to the soil. Adding to this are twigs, branches and fallen trees all add to the composted nutrients.
This layer of composting material is inches deep and slowly turns to organic rich soil.
Now think of trees planted in streets, parks and gardens, often they have bare soil, sometimes grass and occasionally shrubs. Some are even planted in containers. Rarely do they have mulch.
Composting mulch fuels the soil.
Trees should be mulched, in addition to the above, this will retain moisture in the soil, reduce competition from weeds and deters strimmers and mowers (which can damage the bark).
Ideally the mulch should be the by product of processing trees. Bark mulch is not desirable as it takes longer to break down. It is has leaves in it, it is ok, although these will take a bit of nitrogen from the soil as it composts. The mulch should be composted. The optimal mulch is ones that have been processed through a mulcher with hammers. This is quicker to breakdown.
Mulch will increase Mycorrhizal activity by upto x15 that of grass (see previous blogs about this vital (for the majority of trees).
This should be applied 3" deep as wide as possible. The area immediately around the trunk should be kept clear. It is not configured to be below ground. The addition of mulch up the trunk will create the same effect as raising the soil and will rot the trunk.
Mulch will compost down, so it should be replenished every 1-2 years.