Values and Business Practices of The Body Shop

Introduction

“I just want The Body Shop to be the best, most breathlessly exciting company – and one that changes the way business is carried out. That is my vision.”

– Anita Roddick, Human Rights Activist & Founder of The Body Shop

This was the vision with which Anita Roddick started off The Body Shop in The United Kingdom. Anita had stepped into this industry in 1976 when she used £4,000 to finance for a small stand-alone shop of natural-ingredient cosmetics and personal care products. Her idea was inspired from a visit to a shop with a similar name in California. Her aim, at that time, was to support herself and her two daughters while her husband had gone horse-riding for two years. The interior design of her store, product packaging, and marketing approach were all born from survival instinct to support the livelihood of her family. She used dark green paint on the walls to hide cracks (and not in symbolism of the environment!). The clear plastic bottles she used then, that received much appreciation were in fact urine sample containers which she has purchased from a local hospital.

She saw success promptly. Her cosmetic store flourished, and she was motivated to open another even before the company had their first anniversary. When her husband Gordon Roddick returned in 1977, he joined hands with his wife in her thriving business. Together they realized that they wanted to franchise the operations of their enterprise during the company’s second year.

By 1984, The Body Shop already boasted of 138 stores, 87 of which were located overseas, i.e. not within the territory of United Kingdom. Over time, franchising soon took over the number of openings of company-owned stores in 1994 franchises comprised 89 percent of Body Shop stores.

Over the years of success Anita decided to support and contribute to social and environmental change through her enterprise. Initially she associated The Body Shop with reputable groups, which include Greenpeace, Amnesty International, and Friends of the Earth. Later she launched her own campaigns, specifically on ones that focused primarily on recycling and abolishing animal testing in the cosmetics industry. Body Shops put up posters and made petition sheets for the customers. Half way through the 1990s, the franchises were also asked to support some of these campaigns a year for such causes as AIDS education, voter registration, and opposition to animal testing in the cosmetics industry.

The Body Shop, now has 2,400 stores in 61 countries, and is the second largest cosmetic franchise in the world, following O’ Boticario, a Brazilian company. The Body Shop is headquartered in Little Hampton, West Sussex, England, is now part of the L’Oréal corporate group.

Cultural values of The Body Shop

The Body Shop follows the mission statement: “To dedicate our business to the pursuit of social and environmental change.” Dame Anita believed that businesses have the power to do good, contrasting with the traditional view of profit-driven businesses. In 1999, few days before third ministerial conference of the World Trade Organization (WTO), she campaigned against WTO’s ‘profit-obsessed’ system that overlooked social and ecological aspects of businesses. These standards transcend to personal values and motivating factors for external stakeholders, employees and consumers to do good for the society and at the same time, act as strategic marketing tools to gain popularity and reputation for the organization. Every product in The Body Shop has a story to tell; each communicates ideas on business ethics, human rights and environmental issues. From raw material extraction to product packaging, every process is inseparable from the firm’s values. The five core values include activating self-esteem, protecting our planet, against animal testing, supporting community trade and defending human rights.

Activate Self-Esteem

Dame Anita believed that being confident in appearance and feeling good about self are crucial in developing one’s self-esteem and confidence. While The Body Shop uses people to portray vigor, energy and attitude that embrace one’s style and self-worth, it does not use very thin and young models to avoid giving the impression that size and age defines beauty, unlike many other beauty products out there in the market nowadays. They look for pink and fresh faces that are full and blossomed.

Treating women with respect and empowering them boosts confidence and self-esteem. This belief ties in with the value ‘support community trade’ as the firm outsources its natural ingredients to marginal communities, using trade to empower women and giving them employment, improving the lives of their family in more than one ways.

Volunteerism is intertwined with The Body Shop’s philosophy of looking good, feeling good and doing well. The global volunteering policy was implemented in 2008, offering all employees at least 3 paid volunteering days yearly and maximum to 6 different locations. An ‘Anita Week’ was also introduced to encourage employees to undertake additional volunteering activities.

Individual self-development is highly embraced as the firm provides leadership training and management development programs for its employees worldwide, providing opportunities for learning, self-improvement and skills upgrading. It also rolled out a ‘Learning is Of Value to Everyone’ (LOVE) program which funds employees for courses, events, training and health treatment, encouraging them to learn new skills, and stay fit and healthy.

Protect our planet

The Body Shop dedicates enormous amounts of efforts in its efficient environmental system and continues to review their high, yet achievable targets set through the voluntary European Union Eco Management and Audit Regulation, ensuring constant progress in protecting our planet. The firm pays attention to fine details of supply chain processes. Even when sourcing for natural raw materials, the Body Shop obtains supply only from those sustainable plantations and rainforests, ensuring no deforestation or destruction of fragile ecosystems associated. Since the beginning of 2008, all soaps have been sourced from suppliers successfully audited against the Roundtable on sustainable palm oil (RSPO) criteria. With the progress of obtaining its 63% of wood from sources managed by the Forest Stewardship Council (FSC) in 2008, The Body Shop aims to source 100% of its wooden products by the end of 2010.

In 2001, the Body Shop partnered with Greenpeace International in a joint campaign, raising awareness on renewable energy to combat global warming. In becoming a Carbon Neutral Retailer the firm actively seeks renewable sources, achieved 30% reduction of store carbon emissions and reduced emissions from transportation of products by using 93% hybrid cars and offsetting all air travel.

Even at the end of life of each product, environmental considerations are taken into account. While as little packaging is used for all products, recycled used plastic known as Post Consumer Recyclate (PCR) is used to make bottles of the products that are sold are retailed. Also, the 100% recyclable and 100% biodegradable paper bags used in all stores are strong enough to be re-used several times after being taken from the stores. They even looked into delicate details such as use of water-based ink that contain no harmful solvents. The meticulous nature of this kind is remarkable.

The Body Shop carefully selects chemicals, ensuring the quality, safety and efficacy of products to maintain a good environmental record. It resorts to use of synthetic chemicals only when there are no other appropriate natural alternatives available. With regular reviews, following up updates on environmental research on chemicals and constantly refining guidelines for product production, the Body Shop phases out and bans chemicals that are harmful, i.e. polycylic musk that contributes to the fragrance component.

Against Animal Testing

The Body Shop is known for its effort in advancing Cosmetics Directive successfully in March 2009 to ban animal testing on all cosmetic products in The European Union. It is one of the few firms that adhere to the “Human Cosmetics Standards”(HCS), an internationally-recognized scheme that allows consumers to identify and purchase cruelty free products. While the Body Shop collaborates with suppliers endorsing non-animal testing ingredients only, it has regular audits both internally and externally to ensure adherence to HCS. The Body Shop invests heavily in developing alternatives for animal lab-based tests. Recently, it bought Loreal’s non-animal skin irritancy test technology which develops artificially grown human skin for all Body Shop’s product testing.

Even where animal-derived ingredients are used, the Body Shop commits that these ingredients do not cause or derived from the death of animals and they are suitable for vegetarians’ use. Common animal-derived ingredients include bees wax, honey, wool wax (lanolin) and shellac (resin secreted by lac bug).

Community Trade

Community trade is another aspect that The Body Shop has been actively practicing. Being the pioneer of the program, the company performs a fair trading relationship with its suppliers which involve income fairness, community development, and predicable supply. In line with the values, the organization has been trading with communities from third world countries with regards to ingredients used, gifts and accessories. Such an approach is utilized so that these communities will be able to benefit from the trade and use the financial resources to develop the area around them and for education of the youth.

To begin with, natural ingredients are obtained from marginalized communities from Brazil to Samoa. Ethical concerns are addressed by ensuring workers’ human rights are in accordance to international standards. Most importantly, child labor and excessive hours are prohibited as suppliers adhere to The Body Shop Code of Conduct. Moreover, to tackle the issue of deforestation, palm oil for Body shop’s products is sourced reliably to prevent deterioration of this global phenomenon. Over the past years, new trade relationships have been forged with communities such as Kenya Organic Oil Farmers’ Association and CADO from the mountains of Ecuador. The organization have also traded with Teddy Exports, a manufacturer based in Tamil Nadu with the aim to solve social problems in the region by exporting timber and textile related products to both domestic and international market. In all, over 25, 000 people in more than 20 countries have benefitted from this approach.

Defending Human Rights

Not all social issues can be resolved due to inadequate awareness and low coverage by the media. Thus, the company decided to focus on areas of social issues that are usually ignored in an attempt to overturn the situation.

One example of social issue faced by the world is domestic violence. To put a stop to the rampage of this human right abuse, The Body shop aided by raising awareness of the public, generating funds for the victims and their families as well as work alongside with governmental bodies to prevent at-risk and affected individuals. Increasingly over the years, there has been a rise in markets undertaking the campaign of “Stop violence in the home”. Since The Body Shop is not expert in working on the issue, funds were raised and contributed to non-governmental organizations that focus on them. Training programs were also administered to employees globally enabling them to become active campaigners rather than passively promoting the issue. In total, more than 375 million of children are affected positively and the markets participating in the campaign raise both funds and awareness to protect the children from further harm.

Another social issue faced is the prevalence of HIV and AIDs, where The Body Shop has been partnering with MTV international to increase the awareness amongst young people and raise funds for the fight against the issue. Raising awareness of how the disease is transmitted is one of the best ways to prevent the spread of the epidemic, as prevention is always better than cure. Amounts are also granted to entrepreneurial projects to reach out to youths at risk ad keep them safe from HIV. More markets around the world have also joined in to reach out to millions of young people worldwide.

Till date, the Body Shop has made some notable achievements around the world:

Organized street march in Seoul, calling for the government to provide better rehabilitation services, more financial assistance and increased protection for victims of domestic violence

Sponsorship for the site to tie in with “Stop violence in the home” campaign in Switzerland and took the message in classrooms.

Long term partnership with The National Coalition Against Domestic Violence to help create awareness in US. Programs such as Face-to-Face reconstructive surgeries for victims to rectify fatal injuries caused by domestic violence benefitted from the funds that were raised.

Charitable Organization

Last but not least, the organization set up a charitable trust known as The Body Shop Foundation that annually donates to more than 3000 projects around the world. To induce social and environmental changes, innovative projects are funded to aid in promoting the common good. Currently, the foundation is working on environmental conservation in Romania, education in Zambia as well as domestic violence initiatives across Europe and child trafficking in Asia.

Critiques

Authenticity of Claims

In reinstating its position as a company that cares for its environment, Body Shop claims to be many things:

To use all natural products

To be involved with environmental protection

Trade not aid

Anti-animal testing

Natural Products

Despite its claims, many of the ingredients used are not being disclosed appropriately and are dubious with regards to origins. This is unlike industry norm wherein companies marketing the same products would in their packaging state the original sources of their ingredients.

Any discerning consumer should note that the seemingly superiority attached to the word “natural” over “man-made” is not always guaranteed. In actuality, many natural ingredients can conjure allergies and are thus less safe than the well-tested synthetics. Moreover, the marketing counterparts of consumer companies are quick to exploit the loophole due to deficiency in universal meaning accrued to the word, “natural”. The public at large may gullibly assume a product that reads 100% natural to be free from any synthetics, when in fact; they may just as well be derived from petrochemicals.

Although synthetic chemicals were said to be introduced only to prolong shelf-life of its products, it has been shown that they were used for other reasons as well. In fact, the Body Shop has used synthetic colourings and fragrances widely in their line of products. In fact, these cheerfully-coloured perfumes and lotions became part of the company’s trademark. In effect, this seems a case of exploitation the word “natural”.

Environmental Protection

Given its extensive greening efforts, ranging from sourcing of ingredients to materials for packaging, the Body Shop serves as a Green Model for other companies. Even so, there exist some environmental contradictions and setbacks.

Long gone are the days when the Body Shop offered the option of refills for customers as part of its innovative take at reducing packaging and waste. However, it is due to the heightened safety-regulatory issues that this service has been terminated. To overcome this setback, the Body Shop uses recycled materials in manufacturing of the packaging. This allows for significant reduction of resources, bypassing the need for customers to transport them back.

Also, standing in contention with the 100% recyclable paper bag, in 1993, the Body Shop switched to printing their pamphlets on ReComm Matte paper from Georgia Pacific, infamous for rainforest logging.

Trade not Aid

Whilst the Body Shop claims that it “ethically sources” its products and takes prides in its Trade Not Aid policy, which pays first world prices to third world workers. The impact of this program is queried by many industry observers and critics. For instance, according to renowned journalist, Jon Entine, the company failed to match up to its claims and commitment on emphasizing trade with other third world countries. In fact, in 1993, these products made up less than 1% of Body Shop’s overall purchases.

In particular, the controversy centered its sourcing of Brazilian nuts. Broken promises to former face of this promotion, Kayapo Chief, Pykati-Re, landed in a successfully lawsuit against Body Shop International (BSL) for exploitation of the natives’ image. In words of Dr Turner, “Body Shop gets the aid in the form of native images and in return, natives get almost no trade”in return.” Currently, the term has been replaced by “Fair Trade”.

Nevertheless, Roddick has facilitated the idea that trade was superior to aid, in the long run; poor people were better off with businesses of their own, rather than with dependency on handouts.

Animal Testing

What immediately conjures to mind when we think of the Body Shop? The phrase “Against Animal Testing” is bound to be amongst the first. It is pivotal that we note that this was a fairly recent phenomenon, with BSI revision (in1996) that they will cease to use an animal-tested ingredient for the cosmetic industry after December 31, 1990. Their efforts today are evident in clearance of the regular audits which ensures adherence to Human Cosmetics Standards (HCS). However, an internal memo exposed in 1992 suggests that almost 50% of the company’s products are linked with animal testing. According to Hoffman LaRoche, vice president of cosmetics specialties, Dave Djerrasi , purchased animal-tested Vitamin E acetate in 1991 from Hoffman LaRoche for use in sunscreen.

Franchising and IPO

According to Paul Burns an observer of the company, ‘Body Shop brand is inexorably linked with its culture, which in turn is based firmly in its ethical and environmental beliefs and values’. However, with its extensive franchising and expansion to different location across the globe, there appears to be a dilution of its corporate culture. For instance, according to Paul Burns, in Body Shop, employees are given time off to work on local social projects, however, it would be very difficult to enforce this on every single Body Shop outlet across different countries, even if they were to state it in a clause, enforcement itself would be difficult too. In relation to their massive expansion and foray into the equity market, as any finance and behavioral management would postulate, a decrease in ownership stake would meant less incentive for the owners to be involve in the company which also arises from lesser control over their company. For the case of Body Shop, after a failed attempt at re-privatization and voluntarily limiting their involvement in the company, the Roddick’s eventually resign from the company in 2000. This is especially detrimental to Body Shop’s image as Anita is often regarded to be the human face of Body Shop and the soul of its many humanitarian initiatives. Hence, Body Shop’s authenticity as an activist for the environment is increasingly challenged as Body Shop expands.

The Loreal Takeover

The company’s authenticity as an activist for the environment is further challenged after takeover by Loreal -a large MNC with an opposite business culture as Body Shop: ruthless profit maximization versus profits with a conscience. In an attempt to lessen the connection between Loreal (an MNC) and Body Shop, Loreal’s CEO reassures that Body Shop will be run as an independent subsidiary from Loreal. Roddick justified the decision to merge with L’oreal using the “Trojan Horse” Theory, which means that to enact any change, The Body Shop has to enter the company. However, it remains questionable as to whether full autonomy is really possible given the strong capitalistic outlook of Loreal and if two distinct corporate culture remained independent from each other even after merger.

Conclusion

At its heart, Body Shop is a profit-generating company, the very fact that it is a listed company meant that its main obligations stems from its promise to its investors to generate revenue that matches with their expected return on this investment. The question remains as to whether Body Shop is able to fulfill its dual responsibility: one to its investors and the other to the environment; and whether these two responsibilities are inherently contradictory with one another.

When Dame Anita Roddick began her campaigning ways, social marketing was a radical stance in the corporate world. Now, every part of the company appeared to be going green. Arguably, many of these “socially responsible” initiatives have their origins in promotions embraced. This raises an important question: What is Anita Roddick’s real legacy? Did The Body Shop “walk its talk” as Anita and her husband, Gordon used to boast?

However, the fact still remained that the Body Shop had a good record of environmental audit and disclosure. The Body Shop was a signatory of the CERES principles, an environmental code of conduct that was created by environmentalists and social investors. Apart from that, the Body Shop was one of the few companies to have an efficient environment management system and environment audit which followed the voluntary European Union Eco Management and Audit Regulat

References

Funding Universe. (2003). The body shop international plc. Retrieved from http://www.fundinguniverse.com/company-histories/The-Body-Shop-International-plc-Company-History.html

Hope, C. (2005). Anita Roddick to give away entire £51m fortune. Telegraph.co.uk. Retrieved from http://www.telegraph.co.uk/finance/2928175/Anita-Roddick-to-give-away-entire-51m-fortune.html

National Post. (2007). The myth of the green queen. Retrieved from http://www.canada.com/nationalpost/news/issuesideas/story.html?id=41bea314-6b01-4697-83c1-593f4a22d0c1

National Public Radio Morning Edition. (1994). Body Shop International takes heat with ethics charges. Retrieved from http://www.jonentine.com/articles/NPR.htm

Paul, B. (2010) Case Studies in Entrepreneurship. Entrepreneurship and small business. (3rd Ed.) Retrieved from http://www.palgrave.com/business/burns/students/pdf/06%20Body%20Shop.pdf

Roy, S. & Ghosh, L. (2008). “Business as unusual”: A case study on the Body Shop. Journal of Applied case research. Retrieved from http://www.swcrahome.org/Cases/Body_Shop.pdf

The Body Shop International PLC. (2008). Chemicals Strategy. Retrieved from http://www.thebodyshop.com/_en/_ww/services/pdfs/AboutUs/BSI_Chemicals_Strategy.pdf

The Body Shop International PLC. (2009). Living our values: values report 2009.Retrieved from http://www.thebodyshop.com/_en/_ww/values-campaigns/assets/pdf/Values_report_lowres_v2.pdf

The Body shop International PLC. (2010). How we make our customers and employees feel good about themselves? Retrieved from http://www.thebodyshop.com/_en/_ww/services/pdfs/AboutUs/BSI_Chemicals_Strategy.pdf

The Body Shop International PLC. (2010). Our history. Retrieved from http://www.thebodyshop.com/_en/_ww/services/aboutus_history.aspx