Ethical Performance
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The Body Shop speaks up



EP Journal

The Body Shop’s new CSR strategy is designed to make consumers realize why they fell in love with the brand in the first place.

by Tom Idle

The influential Harris Poll puts Amazon at the top of its annual Reputation Quotient (RQ) which ranks the corporate reputation of America’s 100 most visible companies as perceived by the general public.

The online retailer reclaimed the top spot for the eighth consecutive year, with the likes of Apple, Google, Johnson & Johnson and Samsung among the top 10, as more than 20,000 Americans were asked to consider the social responsibility, emotional appeal and the vision and leadership shown by well-known brands.

Unsurprisingly, emissions scandal-hit company Volkswagen dropped to the bottom as the only company to receive a ‘very poor’ rating falling more than 25 points on trust, admiration and respect, and 20 points on environmental and community responsibility.

Just how useful these types of rankings are in driving corporate reputation performance is debatable; the negative media attention associated with Amazon’s apparent efforts to avoid paying appropriate corporation tax in the U.K. seems to have little impact in the Harris Poll, for example.

But more and more evidence points to the fact that consumers are starting to do their homework before making purchases. And while price and convenience still dominate buying decisions, almost three-quarters (72%) of the RQ’s so-called ‘elite’ respondents – a sub-segment of the general public who are thought to be more informed about current issues – said they investigate corporate behaviour before buying. In fact, 57% of them claim to have decided against doing business with a company because of something they learned about how it conducts itself. A third of the general public indicated the same.

Clearly, public perception matters. Volkswagen has delayed its full-year results and annual shareholder meeting after admitting there is just too much uncertainty as to the true financial impact of its decision to install defeat devices to cheat laboratory emissions testing of its vehicles. “Corporate America take note: the majority of US consumers are seeking information about your practices, and in some cases, rejecting companies they interact with because of what they learn,” says Sarah Simmons, a senior reputation consultant at Nielsen, which owns The Harris Poll. “Putting muscle behind messages that support your reputational equity with the public has never been more important.”

One company keen to maintain public trust and enthusiasm for its brand is The Body Shop, the UK-headquartered cosmetics business considered by many to have been at the vanguard of ethical business practice since it began in 1976.

Founded by the late Dame Anita Roddick, the company, which has 3,000 stores in 65 countries, is using the occasion of its 40th birthday to reinforce and strengthen this leadership position with a bold, public ambition to be the world’s most ethical and sustainable business. The new strategy, to be known as Enrich Not Exploit, features14 specific, measurable commitments designed to be met by 2020 and set the business up to be the best it can be in the not-too-distant future.

For Chris Davis, The Body’s Shop’s international director of corporate responsibility, the unveiling of a new strategy couldn’t come soon enough. “We had been too quiet in recent years because we had lost a bit of confidence,” he says. (Roddick died in 2007.) The strategy was launched in part to honour the heritage of the company and Roddick’s original vision, he adds. But it also had to be something that nobody else could do. “There was no point in The Body Shop doing something that didn’t show leadership.”

Like a rock band hunkering down in a studio to record that difficult second album, Davis and his team – supported by the company’s relatively new CEO Jeremy Schwartz – have spent the last few years quietly plotting the bold new ambition, speaking to a range of stakeholders, academics and scientists to truly understand what is required for ultimate sustainability. “We went back to school to discover new things that helped to shape the strategy,” says Davis.

TARGETS

Central to this is the adoption of seven Future Fit principles, designed to keep the company on the right path in being able to flourish commercially while adding to the wellbeing of society as a whole. As such, the 14 targets within the new commitment include a promise to double its already impressive Community Trade programme to include 40 cosmetic ingredients, supporting the communities that produce them. It wants to make sure 100% of the natural ingredients that make up its range of body butters and shower gels are fully traceable and sustainably sourced, protecting 10,000 hectares of forest in the process. And it will build bio-bridges within producing communities to protect and regenerate 75 million square metres of natural habitat.

Elsewhere, there are plans to power all of its stores using clean energy, and to have 70% of product packaging being made without the use fossil fuels.

Some targets are more challenging than others, admits Davis. But taking such a bold approach is something the company’s customers expect of them – especially those coming to The Body Shop for the first time. “We did lots of consumer testing of the strategy and it is certainly hitting the spot – particularly among the Millennials demographic.

“It’s crucial that this commitment works commercially. We can’t fall into that trap of being green and lovely, but not making any money. And we make no apologies about that; we have to balance those two things.”

The Body Shop has not been without its critics. The 2006 sell-out to L’Oréal was widely derided, with the company’s ambassadors fearful that their beloved brand would be somehow destroyed by the behemoth of the cosmetics industry which, at the time, was yet to abandon animal testing. Those fears were soon allied as L’Oréal began to adopt learnings from The Body Shop; it’s ambitious Sharing Beauty With All strategy is testament to that positive impact and as Davis attests, The Body Shop is very much encouraged to trail blaze and experiment in pushing the envelope, especially when it comes to product design, packaging and ingredient innovation.

Failing to understand what it is consumers love or loathe about your company is suicidal in a growing market of more engaged and informed consumers that care about corporate reputation more than ever. The Body Shop is a good example of a brand that neglected, for a time, to share and communicate its values with its core customer base and, as it openly admits, was too quiet for too long, as competitors looked to move into the space fostered by Anita Roddick who started he company 40 years ago. “We had to jump further and this will be the reminder [of The Body Shops values] that people needed,” says Davis. “If it works it will be because people get it and shop with us more.”



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