The Body Shop, Corporate Social Responsibility

The objective of this piece of work is to undertake a critical analysis of the cosmetics company The Body Shop, in terms of its philosophy, business practices and other activities and assess the extent to which the organisation can legitimately be regarded as a socially responsible corporate entity. The concept of corporate social responsibility will necessarily be outlined and discussed to provide a theoretical framework within which the subsequent analysis will itself be located. The study will then explore the organisation’s opposition to animal testing, its support for community trade and commitment to environmental protection. The chosen areas represent three of the five core values that underpin The Body Shop’s mission statement (Appendix 1) the other two being the activation of self-esteem and the defence of human rights, which will not be addressed specifically. It is anticipated that the structure of the study will allow the company’s history, achievements, strengths and limitations in each defined area to be evaluated within a holistic paradigm (Campbell & Kitson, 2008). The values which the company has defined and set for itself will ultimately be used as benchmark criteria against which the organisation will be assessed. Evaluation will therefore be an ongoing and integral part of the analysis, rather than a process that is separate and distinct from it, although the main themes and issues will be drawn together to expose areas of concern and signpost future courses of action. Introduction The Body Shop International PLC is a global cosmetics company launched in 1976 by Anita Roddick and her husband Gordon, which was predicated on ethical principles and the values of environmental sustainability. Generally known as The Body Shop, the company has 2400 stores in 61 countries, two thirds of which are franchised, selling a range of over 1500 products (The Body Shop, 2009a). The company also sells its products through an in home sales programme, The Body Shop at Home, in the United States, Australia and here in the United Kingdom (Carroll & Buchholtz, 2009). One of the first companies to prohibit the use of ingredients tested on animals, The Body Shop also pioneered Community Trade agreements with countries in the developing world. The company is also attributed for shaping ethical consumerism in the way it has produced and retailed its various consumer products. For many years, bolstered by its eco-friendly credentials and ethically focussed marketing strategies, The Body Shop accommodated a decidedly popular position within the public consciousness and for some at least, was seen as the epitome of a socially responsible organisation. In March 2006, The Body Shop was sold to L’Oreal in a  £652. 3 illion takeover deal, netting Anita and Gordon Roddick  £130 million for the firm they had conceived and set up thirty years previously (The Times, 2007). Anita Roddick died in September 2007 of a brain Haemorrhage (BBC News, 2007). Corporate Social Responsibility At its most basic, corporate social responsibility is an umbrella term used to describe the various ways in which organisations strive to ‘integrate social and environmental obligations with their business activities’ (Watson and MacK ay, 2003:625). Put differently, corporate social responsibility is the belief held by increasing numbers of individuals that businesses have responsibilities to society and the community in which they operate, that go beyond their obligations to investors. Although evidence of socially responsible business ventures can be traced back some significant time, the concept of corporate social responsibility in its recognisably modern form is generally regarded as a Twentieth Century phenomenon, finding formal expression in Howard Bowen’s Book ‘Social Responsibilities of the Businessman’ (1953). Bowen defined social responsibilities in the business context as those which are ‘desirable in terms of the objectives and values of our society’ (Bowen, 1953:6). Since then, definitions of corporate social responsibility have become more sophisticated responding to and taking account of changes in the complexity, nature, diversity and size of business organisations operating within an increasingly global context. There are those however who believe that ethical and moral considerations or indeed social responsibility of any kind have no place in business, its operations or processes. Milton Friedman argued that ‘there is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profits’ (Friedman, 1962:133). He disputed that businesses can have responsibilities, ‘Only people can have responsibilities’ he asserted (Friedman, 1970). Friedman viewed business organisations as amoral, accommodating a position that is neither moral nor immoral. In this sense, as long as business takes place in context of open and free competition, is conducted in the spirit of fairness and within the ule of law, questions of social responsibility remain mute. Other theorists link the growth and ascendancy of corporate social responsibility, to the proliferation of ethical consumerism. From this perspective, it is the demands of consumers for products and services that are produced ethically, do not benefit from human exploitation or have no detrimental effects upon the environment, rather than the philanthropic endeavours or altruistic tendencies of business entities that is of most significance (Burchell and Cook, 2006). Irrespective of its precise definition or the theoretical perspective from which it is evaluated, there is little doubt that since its formalised conception, corporate social responsibility has become a major entity on the management and business landscape as well as the object of widespread academic interest. In this context, it appears that the CSR concept has a bright future because at its core, it addresses and captures the most important concerns of the public regarding business and society relationships (Carroll, 1999). Opposition to Animal Testing From the outset, The Body Shop has maintained and publicly declared that it does not test its cosmetic products on animals, nor does it commission others to do so on its behalf, as it considered the practice to be unethical. Indeed, this sentiment became a central facet of the organisation’s philosophy and one that set it apart from its main industry competitors. It is also a policy that has served to define the organisation in terms of its ethical stance and one that has been reaffirmed in many of the company’s publications (The Body Shop, 2006a). In the 1980’s The Body Shop, supported by many of its customers and a wide spectrum of animal protection groups, campaigned for a change in the law on the testing of animals for cosmetics purposes in the UK, Europe, the Netherlands, Japan and Germany. In 1996, The Body Shop presented the European Union with a petition signed by over four million people, objecting to the use of animals in cosmetic testing, which at the time was the largest of its kind ever constructed. The organisation played a significant part in the UK government’s decision in 1998 to ban animal testing for cosmetic products and ingredients. Additionally, the various campaigning activities of Anita Roddick resulted in the banning of finished product tests in Germany and the Netherlands, whilst in Japan The Body Shop was responsible for organising the first major campaign on this issue. In 1995, The Body Shop arranged for the independent auditing of its Against Animal Testing supplier monitoring systems and for their certification using the ISO 9002 quality assurance standard. The organisation was one of the first to sign up to the Humane Cosmetic Standards scheme (HCS) in 1996. This internationally recognised framework was conceived and implemented to enable consumers to easily identify in the purchasing process, cosmetic and toiletry products that have not been tested on animals. In 2004, The Body Shop Foundation (BSF) awarded  £20,000 to The Centre for Alternatives to Animal Testing at John Hopkins University to support research into alternatives that might eradicate the need for animal testing entirely. In 2005, the Royal Society for the Protection of Cruelty to Animals (RSPCA) awarded the company first place in the cosmetics category for ‘Achieving Higher Standards of Animal Welfare’ in recognition of its efforts on this issue (RSPCA, 2005). The following year, it was awarded first place in the ‘Best Cruelty-Free Cosmetics category by People for the Ethical Treatment of Animals (PETA). Lauren Bowey of PETA said at the time of the presentation that ‘The Body Shop is a driving force in promoting a more humane lifestyle. By renouncing animal tests, The Body Shop has shown beauty doesn’t have to have an ugly side’ (The Body Shop, 2006b). In 2008, the RSPCA once again recognised the achievements of The Body Shop, by presenting it with the Good Business Award and in 2009 the society bestowed its ultimate accolade, A Lifetime Achievement Award upon the company. The Body Shop was presented with a special lifetime achievement award for its longstanding commitment in campaigning for animal welfare, and for the work of Dame Anita Roddick in being instrumental in driving legislative change, which has seen an European Union wide ban on animal testing come into force this year’ (RSPCA, 2009). Despite its seemingly impressive track record, there are those who argue that The Body Shop’s stance against animal testing did not develop from deeply hel d ethical beliefs concerning animal welfare, but was rather a commercially motivated strategy to enhance the company’s profitability. Anita Roddick, apparently held no strong views on the issue, but after the use of a Not Tested on Animals slogan was proposed by the company’s first cosmetic consultant Mark Constantine and was later proven to have improved sales, her commitment to this cause seemed to shift. Indeed, no mention is made of animal testing or lack thereof in any of the company’s early promotional literature, nor could its customers reasonably deduce The Body Shop’s ethical position on the matter from logos or slogans on the packaging of its initial product lines. It was not until 1987, when The Body Shop undertook a promotional campaign with the British Union Against Vivisection (BUAV) to end testing on personal care products, that the company’s alignment and identification with the issue against animal testing for cosmetics products can be said to have taken place (Entine, 1996). The Not Tested on Animals claim that became almost synonymous with The Body Shop brand has also been the target of much criticism by animal welfare campaigners and others who argue that the statement is clearly and demonstrably false. For example, it is not possible for The Body Shop or any other cosmetics producer to guarantee that its products contain materials or ingredients that have never been tested on animals. All cosmetics contain fragrances, colourings, preservatives and other formulations that must comply with international regulation and certification processes. It is the case that compliance with such regulatory mechanisms almost certainly involves the use of animal testing, even if it is acknowledged that such tests were conducted some time ago. Indeed, The Body Shop’s shift from the use of Not Tested on Animals to the adoption of Against Animal Testing logo in 1989 was influenced to a large extent by legal challenges in Germany and in the United States following complaints from cosmetic companies and animal welfare groups. The objections were not solely concerned with The Body Shop’s unjustified and exaggerated claims, but the organisation’s portrayal that its policies and practises vis-a-vis animal testing were somehow more ethically robust and superior to those of other companies. In making the transition from one position to another, The Body Shop redoubled it publicity campaign giving the impression in the public domain at least, that it was strengthening its opposition to animal testing in the production of its cosmetics. Perhaps the most significant attack against the Body Shop by animal rights supporters and indeed those who subscribed to and took seriously the notion of corporate social responsibility, followed the sale of the company by Anita and Gordon Roddick to L'Oreal in March 2006. Despite vowing to give away the ? 30 million that she apparently made from the sale, Anita was accused of ethical hypocrisy and abandoning the principles that she had espoused during the course of her entrepreneurial career and upon which her Body Shop empire had itself been based. At its core was the policy of opposition to animal testing, a position that was not one shared by L'Oreal and for which Roddick herself had criticised the company in the past (Roddick, 1992). Campaigners against animal testing also pointed to L'Oreal’s link with the Swiss multinational firm Nestle that held a twenty six per cent share in the company (Milmo, 2006). Nestle, had attracted condemnation in the past for its alleged role in promoting baby powder in the developing world and had also been voted as the ‘world's least responsible company’ in an internet poll (Berne Declaration, 2005). Support for Community Trade Community Trade is a system that promotes the purchase of gifts, products, natural ingredients and accessories from communities around the world that are socially or economically marginalised and is a concept that The Body Shop has actively supported for more than twenty years. By allowing producers to access markets that would otherwise be unavailable to them and ensuring that remuneration for the materials, ingredients and products that are supplied is fair and ethical, Community Trade has the very real potential to provide stable sources of income for producers in some of the most socially and economically disadvantaged parts of the world. Indeed, Community Trade and other variants of it such as Fair Trade, is a central pillar of corporate social responsibility and as an identifiable scheme or programme, can have demonstrable benefits for those individuals and groups who participate in it. Under the banner of Trade Not Aid, The Body Shop purchased its first Community Trade products in 1987 from Tamill Nadu, a small community in Southern India. In 1991, Kayapo Indians used their skills to harvest the Brazil nut oil which Body Shop used in one of the company’s bestselling hair conditioning products. Similar projects quickly developed in various parts of the world such as New Mexico where the Pueblo Indians were commissioned to supply The Body Shop with Blue Corn, an essential component of its scrub mask product. Since then, the organisation has identified and worked with trade partners in over twenty countries and is now helping over twenty five thousand people throughout the world to earn a fair wage. It is also that case that more than half of The Body Shop’s core product lines contain one or more ingredients acquired through Community Trade (The Body Shop, 2006c) and that in 2009  £7. 4m was spent to support the Community Trade programme itself (Body Shop, 2009b). Over the years, the Community Trade programme has enabled The Body Shop not only to source high quality, sustainable and demonstrably natural ingredients and other products from across the world, it has allowed the organisation to make a real contribution to the lives and future of those with whom it has developed trading links and partnerships. ‘Community Trade is our commitment to trading fairly and responsibly with suppliers. We actively seek out small-scale farmers, traditional craftspeople, rural cooperatives and even tribal villages, all of them highly skilled experts at their work’ (Body Shop, 2009b). Through its Community Trade programme, The Body Shop has also supported initiatives in its supplier’s local communities, with projects that involved the building of wells, schools, community centres and the supply of educational material to enable learning and the acquisition of knowledge. Indeed, The Body Shop’s pioneering efforts in the area of Community Trade is regarded by many as a model within the cosmetics industry and one that the organisation itself hopes that others will strive to emulate (The Body Shop, 2006c). In 1996, a Code of Conduct was constructed by The Body Shop which outlined the ethical standards to which all of its suppliers should adhere. The Code was developed further in 2005 to ensure its alignment with the Ethical Trade Initiative (ETI) Base Code that sought to identify minimum standards for workers within a global context (The Body Shop, 2005). The Body Shop gave operational expression to the Code by setting up monitoring and assessment systems to ensure compliance by all its suppliers. The Body Shop also worked with those groups whose practices or conditions fell below that which was expected as it believed an educational and awareness raising approach was a more responsible and imaginative way to deal with none compliance than more Draconian responses. Indeed, there is evidence that by engaging with this audit process, suppliers have become more valuable as partners, not only for The Body Shop, but for other retailers and in some cases have caused suppliers to implement their own ethical trade agreements with others further down the supply chain. Whilst The Body Shop would appear to have pioneered the notion of Community Trade, at least if one were to accept the accuracy of the organisation’s publicity and promotional material, some anthropologists and activists have criticised the company for exaggerating the scale and nature of its programmes and other claims that have been made regarding its support for indigenous communities throughout the world. In 1994, it was estimated that Community Trade spending accounted for less than 0. 6 per cent of The Body Shop’s gross sales (Bavaria et al. , 1994). This figure is clearly meagre when compared with the finances of the fair trade organisation Traidcraft, which in the same year disclosed that no less than 31 per cent of its turnover came from fair trade sources (Entine, 1995). Such comparisons are used to question why The Body Shop focuses so much public attention on a programme that accounts for such a small proportion of its total business. Terence Turner, an anthropologist at the University of Chicago has argued that The Body Shop’s purchase of Brazil Nut oil from the Kayapo Indians did nothing to prevent the destruction of the their rain forests, as the company claimed in its public pronouncements. According to Turner, the Kayapo derived most of its income from selling logging and mining concessions on their lands, the very the activities that the Body Shop claimed to have protected through its Community Trade programme. Turner also argued that whilst The Body Shop used images of Kayapo Indians extensively in its stores and in other ‘informational broadsheets’, to enhance its depiction as a culturally sensitive company, the villagers have not been fully compensated for the use of their images by the company in this way (Bavaria et al. , 1994). There is evidence also that some of The Body Shop’s Community Trade associations are patronising and have brought mixed economic benefits for producers, whilst creating tensions, divisions and evoking widespread disruption to the existing social order for indigenous communities. It has certainly not helped the Indians come together as one people; on the contrary, it has contributed to internal antagonisms and divisions, not to mention social dislocation and alienation which recently ruptured the community completely’ (Corry, 1993:11). Environmental Protection As one would expect from a company that has aligned itself so fundamentally with ethical principles in its business practices and operations, environmental protection forms a significant part of The Body Shop’s philosophy of sustainable development. Indeed, since its creation, the organisation has supported the use of technologies and materials that cause minimal harm to the environment and its inhabitants and has promoted the use of resources and ingredients in its product lines that are renewable and sustainable. In 1976, when The Body Shop set up its first UK store in Brighton, it was the one of the first cosmetics companies to provide a refill service and actively encourage its customers to return their used containers and packaging for recycling, a practice that continues today (Roddick, 2006). In continuing its tradition of waste reduction The Body Shop has recently introduced plastic bottles made from one hundred per cent recycled material, an initiative that built upon the company’s replacement of all its carrier bags in 2008 with recycled and recyclable paper bags, the environmental benefits of which are apparent (The Body Shop, 2006d). The Body Shop also sources wood products through suppliers who are Forest Stewardship Council (FSC) certified and hopes ultimately to become a carbon neutral retailer by 2010 (The Body Shop, 2006d). In seeking to turn the rhetoric of its environmental protection objectives into reality, the Body Shop is constantly exploring new ways to improve business practices that result in the reduction of the company’s carbon footprint. Many of its stores have already benefitted from structural refurbishment projects that have resulted in energy efficiencies and more are planned in the future as part of an ongoing programme. Low energy lighting and heating systems, conversion of company cars to lower emission models and the reduction of air travel by Body Shop staff are all hoped to contribute towards the longer term objective of carbon neutrality. Where it is possible, The Body Shop is also committed to using renewable sources of energy to run its offices, stores and warehouses throughout the world. In the UK for example, sixty five per cent of its stores are linked to renewable energy contracts. Such energy saving and conservation strategies have been underpinned by awareness training for staff members, which it is hoped will lead to further reductions in the company’s use of finite environmental resources (The Body Shop, 2009d). Although regulatory changes are planned in the future (DEFRA, 2006) public companies are not currently compelled by law to report on their environmental record, unlike the publication of financial statements, nor indeed maintain systems though which such data can be accurately captured. It is the case however that The Body Shop voluntarily published three independently verified environmental statements in 1992, 1993 and 1994, each of which met the criteria of the European Union Eco-Audit, which is now the Eco-Management and Audit scheme (EMAS). In 1994, The Body Shop enhanced and developed its environmental reporting strategy, by combining it with evidence based information of its performance and progress in a number of other areas. The outcome was the production of The Body Shop’s Values Report 1997, a document that is often seen as ‘one of the most significant social performance reports ever prepared’ (Carroll & Buchholtz, 2009:798) and for which the company developed its own ethical auditing methodology (The Body Shop, 2008). Since then The Body Shop has produced further Values Reports, the latest of which includes contributions from a stakeholder’s panel and an external advisor Alan Knight. Alan serves on the UK Sustainable Development Commission and is a highly respected voice, whom we felt would challenge and provoke us’ (The Body Shop, 2009:8). Despite the apparently positive stance taken by The Body Shop on matters of environmental protection and its portrayal in the public domain as the very epitome of a progressive company, there are those who have challenged this perception and rather than being a champion of green issues within the cosmetics industry, believe the org anisation is concerned more with the pursuit of profit than it is with saving the planet (Suzuki, 1996). Whilst publicly declaring its commitment to recycling, The Body Shop has in the past printed its catalogues on ReComm Matte paper, a product produced by Georgia Pacific, a company based in Atlanta notorious for its environmental problems and the large scale harvesting of rainforest timber. Sources within The Body Shop at the time said that the firm had switched from the post-consumer waste recycled paper it was then using to the Georgia Pacific product in January of 1993, apparently because it was cheaper and glossier than the material it had replaced (Entine, 1996). The Body Shop has also phased out the use of reusable and more easily recyclable unbreakable glass containers in favour of plastic receptacles made from petrochemicals that are not recyclable in the majority of markets within which The Body Shop operates. Once again, sources within the company suggest that this move was motivated by escalating shipping costs and thus the imperative to save money, although was apparently promoted in the media and within company literature as being environmentally progressive. There is also evidence that some of The Body Shop’s processing operations have resulted in the discharge of non-biodegradable and some toxic chemicals into local sewerage systems. David Brook, former head of The Body Shop’s United States Environmental Department has confirmed a number of incidents that involved the leaking of materials from the company’s facility in New Jersey. This is underpinned by public records held by the Hanover Sewerage Authority that cites three cases of discharge, although Michael Wynne, an official with the organisation suspected that there were probably more (Entine, 1994).