The Body Shop: Sustainable Management Evaluation - Case Study Example

The Body Shop: Sustainable Management Evaluation Company Description The Body Shop, founded in1976, in Brighton, England, is a global organization that manufactures beauty and skin care products, using only ingredients that quickly biodegrade in the environment. There are no ‘sulphates, colourants or parabens’ (Body Shop main page) used in the various product lines. The product line includes body butters, hand creams, shower and bath gels, moisturizers, cleansers, hair care products and more. Many product types come in an assortment of scent combinations. Products are sold in 30 countries, spanning 5 continents. The organization offers opportunities for individuals to become personal consultants, promoting products from their own offices or homes. Independent representatives can promote products through individual or personal selling and by having parties, where several guests are invited. The company also offers an affiliate program, where customers can earn money through referrals. While the organization does not use the term sustainable in its corporate information pages, It does focus on fair trade and on ‘responsibly sourcing’ (Body Shop values page) ingredients for its products. The Body Shop does not test its products on animals. The Body Shop appears to have a particular focus on fair trade and the fair trade community. In the late 1990s, even as the company struggled to remain profitable, it remained dedicated to its principles of sustainability for all stakeholders. Today, the company is a subsidiary of the L’oreal Group. It remains dedicated to sustainable principles and has established the Body Shop Foundation, which is designed to help communities in need. The Body Shop has earned the RSPCA Good Business seal and a Big Tick, from the Business in Community organization, in 2007. Though the organization outsources most of its manufacturing, it owns the Soapworks, in Glasgow, Scotland, which was designed to give members of the community increased financial and social benefit. The organization’s most recent award, the United Nation’s Business Leader’s Award to Fight Human Trafficking, was presented to The Body shop’s International Campaigns Director, Christopher Davis, by the United Nations, in December, 2010. Context Analysis Political The Body Shop has established five core principles and supports various organizations that put those principles into action. Of those principles, protecting the environment and supporting groups of people who product raw materials are two principles that have been challenged by other political groups. London Greenpeace claims that by continuing to demand its products, consumers are actually doing more harm than good. The organisation has passed out leaflets that explain why “consumerism ('green' or otherwise) has a detrimental effect on the environment, society, and the world's poor. Nobody can make the world a better place by shopping” (MC Spotlight, 1998). The Body Shop must choose whether to respond to such claims and how it will respond, as consumers around the globe are made aware of such issues. The Body Shop has taken a stand through its advertising. The ‘Ruby’ doll is created with a fuller, more realistic figure, which depicts the average woman. ‘'There are 3 billion women who don't look like supermodels and only 8 who do’ (Elliott, 1997). The reality advertising campaign came at a time when other companies, such as those in the cosmetics, garment and food industries were also using the message that super-thin was out. The challenge is in taking a stand and staying true to core values, even when they are not as politically correct or widely accepted by some audiences. Economic For The Body Shop, pricing has been a challenge. In the 1990’s, the Body Shop lost market shares to competing brands, such as Sephora, Bath and Body Works, H2O and Origins (Beeson & Kedik). The cost of producing raw materials using sustainable methods is often higher than with other methods. The Body Shop is dedicated to paying a fair price to its producers, many of whom are economically disadvantaged groups of people. Though consumers of sustainable brands are ‘willing to pay up to 25% more than traditional brands’(Sustainablebusiness.com, 2011), they are less willing to pay more for one sustainable brand over another, where plenty of competition exists. However, with more efficient methods of product and the development of new ways to reduce costs of bringing products to market, the organisation should be able to competitively price its products, so they are affordable for any budget. Many products are now more affordable for all consumers. Tubes of body wash are priced at £2, for example. Social The positioning of the product as one that offers benefits to consumers and producers, aims to target those consumers who want sustainable brands and are able to identify the most sustainable products. This population is growing, as more consumers become educated about the effects that sustainable products have on the environment and the globe. Consumers have expectations of major brands becoming more sustainable as well. ‘Mainstream shoppers have become more concerned with environmental values, more educated and outspoken about personal values like health and safety, and more protective of their time and money’ (Sustainablebusiness.com, 2011). Such consumers are able to evaluate and compare brands, based on levels of sustainability and an increasing knowledge of best practices. Through publications such as the Values Report, consumers are able to compare The Body Shop against competitors and make purchasing decisions based on available information Technological The technological environment is rapidly changing. Sustainable methods improve as increased knowledge is gained, through research. The Body Shop is able to work with many of its producers, to ensure they understand sustainable methods. For any technology to be useful or a larger scale, it is important that current knowledge is shared. Available technology is not always the most cost effective. The cost of bringing new technology to a population must be weighed against costs. Technology such as the internet and the use of company websites encourages consumers to use less fossil fuel, to purchase products. In each country The Body Shop operates, consumers can order products directly online. Those who prefer the consultant approach can order products from a local representative. Both methods of promoting products help reduce consumer use of fossil fuels and the use of paper products, for advertising. Technology helps The Body Shop adhere to one its core values, which is to protect the environment. Environmental The Body Shop is committed to doing as much as possible, to protect the natural environment. The organization works with suppliers to develop the most sustainable methods possible, for producing raw materials. The use of corn-based alcohol in product scents, is much less harmful to the environment and to consumers, who use products. This is one measure the organisation has taken to improve the lives of consumers. The organisation has also developed a programme for using packaging for its products, made of 100% recycled material, where possible. While The Body Shop may not be able to use such packaging for all products, it has established goals for improving in this area and continues to work with suppliers, for more eco-friendly packaging options. Legal The Body Shop must adhere to local and national laws of the countries where raw materials are produced. While the company aims to improve the lives of various groups, it must also consider any restrictions or limits on exports, that those countries may impose. Limits on export of raw materials help regions protect resources that their own citizens can benefit from. In addition, limits allow regions producing raw materials to consider other avenues for generating revenues. Advertising come with many legal issues, particularly when making a claim of how an organisation produces its products. The Body Shop was sued by the German government, when it was pointed out that the company could not claim on its labels, that products were not tested on animals (Werther & Chandler, 2001, p. 195). Though The Body Shop does not engage in animal testing, other companies using the same ingredients have. Therefore, the claim that ingredients have not been tested on animals is misleading to consumers. The Body Shop was forced to change its labelling to state that it is merely against animal testing. Sustainability What is Sustainability? Sustainability involves more than simply considering an organization’s environmental impact. It requires consideration for the well being of others, regardless of race, ethnic origin, religion or culture. Sustainability considers the economic welfare of producers and other stakeholders within the supply chain. It considers the physical well being of various individuals and groups. Sustainability is a concept that involves many factors, such as the five principles adopted by The Body Shop. Beason & Kedik summarize what The Body Shop stands for, in the words of John Muir. ‘Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength, to the body and soul alike.’ The five principles embraced by the organization impact the world in various ways. Each brings its own value and involves a unique consideration for making the world a better place. Supporting Community Fair Trade Community fair trade considers working conditions, income and overall well being of workers who product raw materials and supplies. From the beginning, The Body Shop has consider the people who help make raw materials for its products possible. The organization has been involved in fair trade from the beginning and has extended fair trade practices, by establishing its own Fair Trade Communities program. The Body Shop has established a network of more than 30 suppliers, ‘providing over 25,000 people across the globe with essential income to build their futures’ (The Body Shop, About us page). Some of the communities the organization supports produce ingredients for products that are hard to find in other regions of the world, are of the finest quality and offer producers a means of earning a viable living. Tee tree and sunflower oil come from the Kenya Organic Oil Farmers Association (KOOFA), which is comprised of nearly 400 farmers committed to organic production methods. Coconut oil comes from the Women in Business Development, Inc., in Somalia (The Body Shop International, 2009). The organization allows women to become more self sufficient and educates producers on environmental issues. WIBD offers producers micro-loans, which are a form of no-interest loans designed for those who want to start a small business and support themselves. ‘Although investing in these businesses won't make you rich, you'll help make the world a richer place by enabling struggling entrepreneurs in developing countries to lift themselves out of poverty’ (Landis, 2007). Micro-loans are becoming popular among many individuals, as lenders can choose an amount to donate and can choose which business to support. Often photos and a short history of the person seeking the loan are provided, which makes charitable contributions more personal. Defending Human Rights Human rights issues are often at the forefront of news stories. However, such stories are not simply about making headlines. They are about letting the world know how unfairly many people, around the globe, are being treated. They can also be viewed as a plea or call to action, from groups or organizations that can make a difference. In its Values Report, The Body Shop International (p. 23) provides a table of measures on human rights, and the level of compliance in key areas. Compliance in areas of freedom to choose employment, discrimination, humane treatment of workers and offering regular employment is generally high. However, in areas of employment safety, offering living wages and offering reasonable working hours, there are many compliance challenges, for the organization. While The Body Shop does not force compliance; it does conduct audits of each organization associated with supplies and raw materials, as well as for those organizations that manufacture products. Anita Roddick points out that too many people only see the positive side of a corporation and never experience, first hand, the harm a corporation may bring about, for some stakeholder groups. ‘I'm occasionally accused of taking these issues too personally, as if being in business were necessarily a cold-hearted, objective, pseudo-scientific project to manipulate consumers’ (Roddick, 2001). Today, consumers are willing to take a stand against human rights violations and will boycott or change brands, if they acquire knowledge of an organization’s human rights or ethical violations. ‘Evidence suggests that boycotts are increasingly successful and focused, to a greater extent, on corporate practices’ (Klein, Smith & John, 2003, p. 4). Consumers do take practices that are socially irresponsible personally and are becoming increasingly aware of their impacts on society. Avoidance of Animal Testing Products made and sold by The Body Shop are not tested on animals and never have been. The company maintains its position and continues to take a stand against animal testing. This is a common practice in the cosmetic and beauty products industry. The Body Shop has worked with the RSPCA to raise funds for its efforts and has been awarded a stamp of approval by the agency, for its stance on not using animals for testing of health and beauty products. It also encourages other organisations to adopt the same policies. The parent company, L’Oreal, will be forced to stop animal testing in 2013, due to a new European Union mandate. However, until this occurs, the parent company remains on the list of offenders (Vegetarian-Research, n.d.). The Body Shop must maintain some distance from association with the parent company. Promoting Self-Esteem Self-esteem comes from feeling good about one’s physical, emotional and intellectual attributes. While it comes from within, self-esteem can be affected by the way others treat an individual or group of individuals. Sustainability involves the ‘consideration of gender issues in relation to equality, transparency, opportunities and human rights’ (Acevado, 2011). Many of the initiatives and campaigns supported by The Body Shop focus on actions that empower women. Working through organisations such as WIBD empowers women to make their own decisions about how they want to work and to have a voice in their communities. Such organisations help women feel good about themselves and what they are able to accomplish. The bag for life reusable shopping bag product is a campaign that helps orgranisations fighting human sex trafficking. Daisy soap is a product designated to help fight violence in the home. The Ruby doll campaign is an effort to boost the self-esteem of all women, based on sales in nearly 50 countries. Protecting the Environment Protecting the environment involves taking many steps, from finding ways to reduce carbon emissions, to encouraging sustainable production and farming methods. The Body Shop uses many organic ingredients and encourages producers to use organic methods. The use of pesticides not only causes harm to humans, but also depletes soil more quickly, rendering it eventually useless for growing. Organic farming methods focus on replenishing and enriching the soil, so it can continue to support crops for years to come. The Body Shop has established goals for sustainability, that include funding projects, reduction of carbon emissions and increasing use of recyclable materials. Benchmarks and Good Practices The Body Shop has established goals, for meeting or exceeding environmental protection processes. While the organisation does expect partners and suppliers to follow recommendations and guidelines for sustainability, it is not punitive toward partners that fail to meet expectations. It uses independent auditors and a staff of trained auditors to visit various sites, to examine the level of compliance. Many sites are audited every 2 years, while those located in regions of economic, environmental or political instability are visited every 12 months. While the company has not met its targeted goals in some key areas, such as reduction of carbon emissions, it has gained recommendations, by using outside agencies on its panel for its Values Report. Origins, created by Estee Lauder, is a global competitor of The Body Shop, that offers beauty products such as cosmetics, lotions, soaps, gels and creams, made of all organic ingredients. The company is also against animal testing and focuses on benefitting society. It has adopted a policy of using recycled material packaging. Origins has donated to projects that benefit the well-being of various groups of people and the environment (Origins About page). Origins is also involved in a tree planting program and forest education programmes. Though the company is owned by a parent organisation that does not discourage or take a stance on animal testing, the company has been able to avoid attacks from various groups. The company has not received the types of awards that The Body Shop has. However, being ‘certified organic’ means the company must adhere to strict regulations, about how raw materials are produced and the amount of organic materials used in products (Organic Consumers Association, 2007). While both companies practice the use of recycled packaging materials, Origins has developed a product packaging return policy, where consumers can actually return empty packaging to stores that sell their products. Analysis Using AUDIO analysis, The Body Shop affects the environment in two key areas: biodiversity; and climate change. ‘Sustainability is more than a philosophy; it is an iterative, enterprise-wide practice,’ says Ron Loch (in Cheeseman, 2011). By encouraging sustainable practices, raw materials are produced in a manner that causes less harm to the surrounding habitat. Upstream, this is a concern for producers of raw materials. Downstream, offering products with new ingredients, such as nut oils in some of its products, The Body Shop is encouraging consumers to consider a variety of ingredients, rather than contributing to the depletion of a few common resources used in beauty products. Climate change is affected by sustainable practices, particularly those that reduce the amount of carbon emissions in the production process. Upstream, The Body Shop has adopted a practice of using low wattage lighting in its stores. The company also uses packaging made of recycled material, which avoids landfills and therefore, produces fewer greenhouse gases. Upstream, the purchase of products with recyclable packaging helps to reduce the amount of packaging that ultimately ends up in landfills. Decreased use of power helps reduce the emissions of power plants. Recommendations Promotions Samples Products are promoted through stores and through independent representatives. While representatives may purchase products to use as samples, many consumers are not aware of the product name or its benefits. Offering samples in stores and in expositions or major events around the globe serves two purposes. It increases brand exposure and allows potential consumers to learn first-hand, from company representatives, what the company stands for and how it benefits the world. Support Sustainable Infrastructure While working with organizations that offer micro loans is a step toward empowerment, of those with few resources, The Body Shop can take its efforts a step further. Surowiecki (2008) recommends ‘projects that focus on making an entire community more liveable, through infrastructure, such as clean water.’ The Body Shop has an opportunity to partner with other organisations that can develop much needed infrastructure, in areas where the economy does not permit, where women in business can be more fully supported. Aligning Suppliers The organisation has developed procedures to monitor its performance. It meets the criteria suggested by Sisco & Wong (2008, p. 6), of having a written plan for sustainability and internally evaluating its efforts. The authors also suggest the use of a supplier scorecard, to keep track of the sustainability progress among suppliers. As the panel reviewing the Values Report has also suggested developing a method of aligning suppliers, this appears to be one of the few weak areas the organisation has yet to address. Setting objectives and demanding compliance in specific areas of sustainability is not harsh. Consumers increasingly make demands on corporations, to set and maintain sustainability goals. Conclusion The Body Shop has remained loyal to its five core principles and has managed to weather a many storms. To its credit, The Body Shop has achieved plenty of success in the many different facets of sustainability and realises it has more to accomplish. As a company that focused on sustainable practices before sustainable development was officially recognized in 1987 (Casimir & Dutihl, 2003, p. 316), it had a vision of making the world a better place, without the guidelines and models available today. Reference List Acevado, B. , 2011.. Gender and sustainability, BB315014S Sustainable Management Futures. [Power Point]. The Body Shop. [Home page]. Available at http://www.thebodyshop.co.uk/index.aspx.htm. [Accessed 10 April 2011]. The Body Shop. [About us page]. Available at http://www.thebodyshop.co.uk/_en/_gb/services/aboutus.aspx?cm_re=Footer-_-AboutTheBodyShop-_-AboutUs. 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