One of the Worlds Most Ethical Companies - Essay Example

? L’Oreal: One of the World’s Most Ethical Companies First M. al Affiliation Introduction L’Oreal is one company that is recognized as one of the 2013 World’s Most Ethical Companies. This list includes all companies that displayed exemplary efforts in demonstrating ethical business practices in their own respective industries (“World’s Most Ethical Companies,” 2013). L’Oreal is the biggest cosmetic and beauty enterprise in the world. It is known to provide high quality beauty products to various global consumers (L’Oreal, 2013a). The aim of this paper is to examine the ethical practices of L’Oreal towards its responsibility to consumers, the environment, and employees. It will predict the possible effects of these ethical practices to the bottom line of the company. Furthermore, existing policies will be reviewed and recommendations on the areas that need to be improved will be provided. Moral Responsibility to Consumers It has always been the ethical value of L’Oreal to be open-mindedness, wherein it always listens and conforms to the needs and feedback from diverse consumers. Firstly, cultural and racial differences are considered in the development of beauty products to global consumers (L’Oreal, 2013b). The company is committed in providing the best quality beauty products at the most reasonable price to all its consumers for their satisfaction. It always values its consumers from the development to production of beauty products down to marketing and customer relationships. Each product is formulated in conformance to the consumers’ needs of beauty. Secondly, it is active in providing sustainable consumption to consumers around the world by utilising natural ingredients, which bring natural effects to the health of consumers (“L’Oreal Publishes 2010 Sustainable,” 2011). Moral Responsibility to the Environment The company is aware of its impact to the environment, which contributes to the aggravation of global warming. In order to reduce its negative environmental effects, it has adopted an environmental program that enables the use of sustainable and local raw materials to produce safe and environment-friendly beauty products in the market. Ethically, the company has embraced its responsibility towards the environment, which does not include its own production processes, but reaches out to its suppliers as, well (Elks, 2013). The company has developed a packaging policy in its environmental program in considering the environmental impact of the packaging design. The company makes sure that all its packaging materials are weighed lightly in order to reduce the utilization of cardboard materials from trees. Its packaging design has been forest certified by the Forest Stewardship Council (FSC) for the last five years. The company sees to it that the raw materials used have passed under its selection system, which requires meeting its several sustainability standards, such as conformance to biodiversity, consumer safety, and long-term accessibility. The company has also adopted an initiative in minimizing its discharge of greenhouse gases through its participation of the Carbon Disclosure Project since 2003. Its initiative has reduced its discharge of carbon dioxide in the environment by 28% through adopting sustainable raw materials and production processes (L’Oreal, 2013c). Moral Responsibility to Employees Aside from its responsibility to consumers and the environment, the company has also been practicing ethical practices for its responsibility to its employees. The company offers personalized programs in inducting new employees to the company, which conform to their personalities, skills, and knowledge through comprehensive trainings. In order to make the transition of a new employee successful in the company, it offers a personalized program that includes training, meetings, and discussions with the right people (L’Oreal, 2013d). All employees are also entitled to all career development opportunities despite of race, color, and ethnicity, including education, promotions, and international mobilization. Through its international company sites, it employs various people with different culture as long as the right skills and knowledge are present. The company is committed in providing non discriminating practices in employing people for appropriate jobs. The company also encourages the employment of people with disabilities because like any other individuals, they also possess the required skills, knowledge, and dedicated needed by the company’s sustainability in the business. With this type of opportunity, the company holds true in its commitment for employment equity. Women are given equal opportunities to hold higher position similar to men in the company to promote gender equality in the workplace (L’Oreal United Kingdom, 2013). The company also sees to it that the human rights of employees are upholded by giving them a balance of work and leisure. Aside from requiring them to work on prescribed hours and conditions, the company offers a wellbeing package, including yoga and music lessons. Since employees are stressed from work, the company offers benefits and perks that enable all its employees to unwind for the benefit of its mental health and body. The perks in the program are all decided through the suggestions of all its employees to decide on its common demands for entertainment and leisure (Fox, 2013). These kinds of benefits give a clear manifestation that the company is serious in providing desirable working conditions for all its employees. Predicted Effects of L’Oreal’s Moral Decisions to its Bottom Line Its moral decisions to consumers enable the company to display a good reputation among all its consumers that it values their needs and demands for quality product and service. It leads to customer brand loyalty, which can increase the revenues of the company. On the other hand, the company’s moral decisions to the environment provide them an opportunity to avoid further environmental cases from environment societies and the government. The environment initiatives promoted by the company ease its harmful effects to the environment, which reduces the aggravation of global warming and promotes the conservation of natural resources. Sustainable products also bring positive effects to the health of humans and the biodiversity. Moreover, the company’s moral decisions to its employees will encourage them to perform their best at work resulting to high employee retention and loyalty. Recommendations As to the areas that require improvement for its bottom line, although L’Oreal has been effective in implementing a successful sustainability policy in conserving the natural resources and biodiversity, it has fall short in addressing its policy on animal testing. The company is rumored to conduct animal testing on its products and raw materials for cases of allergies and side effects (Russell, 2013). This gives a bad impression to environmentalists and consumers. In order to resolve this issue, the company has to rectify its animal testing policy for the complete eradication of this practice because it harms the welfare of test animals like rabbits and monkeys. They have to look for an alternative solution in preventing to resort to animal testing, like developing a new technology that serves the same purpose in testing the effectiveness of products. Another policy that needs to be modified is its advertising policy. The company has been accused of using misleading information for its advertisement giving false hopes to consumers. An example of this is its advertisement for Lancome that promises gene restructuring effects for youth complexion (Moore, 2012). Therefore, L’Oreal should always conduct a regular review of its marketing strategies, such as the use of advertisement campaign, to be truthful with their released information. Conclusion The aim of this paper is to examine the ethical business practices of L’Oreal in the cosmetic and beauty industry. Ethical responsibilities that are scrutinized include the company’s moral decisions to environment, consumers, and employees. Since the company is part of the 2013 World’s Most Ethical Companies list, it has been successful in fulfilling the three areas of responsibilities. The impact of these moral decisions are also studied in this paper, which gave an utmost effect to the reputation of the company aside from giving positive effects to its triple bottom line. Furthermore, recommendations were provided to improve the company’s existing policies on animal testing and advertising. References Elks, J. (2013). L’Oreal announces ambitious sustainability commitment for 2020. Retrieved from http://www.sustainablebrands.com/news_and_views/ communications/jennifer-elks/loreal-announces-sharing-beauty-all-its-new-sustainab ili Fox, N. (2013). L’Oreal: because their employees are worth it. Retrieved from http://www.theguardian.com/sustainable-business/loreal-employees-worth-it L’Oreal. (2013a). Who we are. Retrieved from http://www.loreal.com/group/who-we-are.aspx L’Oreal. (2013b). Our values and ethical principles. The Guardian. Retrieved from http://www.loreal.com/group/who-we-are/our-values-and-ethical-principles.aspx L’Oreal. (2013c). A joint environmental effort. Retrieved from http://www.loreal.com/suppliers/ our-sustainable-procurement-policy/a-joint-environmental-effort.aspx L’Oreal. (2013d). Integration. Retrieved from http://www.loreal.com/Article.aspx? topcode=CorpTopic_Careers_WhatWeOffer_Bloc3 L’Oreal United Kingdom. (2013). Diversities are our priority. Retrieved from http://www.loreal.co.uk/_en/_gb/html/our-company/our-policy.aspx L’Oreal publishes 2010 sustainable development report. (2011). Retrieved from http://ethicalperformance.com/reports/view/609 Moore, A. (2012). FDA issues warning to L’Oreal over misleading ads. Medical Daily. Retrieved from http://www.medicaldaily.com/fda-issues-warning-loreal-over- misleading-ads-242469 Russell, J. (2013). L’Oreal launches ambitious green plan, but stumbles on animal testing regulations. The New Zealand Herald. Retrieved from http://www.nzherald.co.nz/environment/news/article.cfm?c_id=39&objectid=11148198 World’s most ethical companies-honorees. (2013). Ethisphere. Retrieved from http://ethisphere.com/worlds-most-ethical/wme-honorees/ Read More