Body Shop misses some opportunities to chart its progress effectively
By Tom Branczik
Back in the 1980s Body Shop blazed a trail for ethical business. Three years after its purchase by L’Oréal the company’s new report stays focused on the core values that have driven it since its founding. It is proud of its record and continues to plough its own furrow with an individual report.
The report starts well with a clear explanation of the company’s values and governance structure. There is a strong emphasis on stakeholder engagement, which has guided the report content, and a summary of stakeholder panel recommendations. But it is not entirely clear who sits on the panel, how often it meets and how independent it is since it is chaired by the company’s co-founder Gordon Roddick. Further validation is provided in external commentary by Alan Knight – a fellow trailblazer, formerly at B&Q. His thoughts are included throughout the report, including the comment that this is “one of the most interesting CSR reports I have read this year”.
The bulk of the content covers responsible sourcing and environmental impacts, and there is plenty of interest here. Body Shop’s other value areas are covered more briefly: animal testing, self-esteem and, obliquely, human rights. And there are short sections on campaigning and community involvement.
Strong sourcing
Responsible sourcing is the strongest area. Good case studies highlight the extensive use of Body Shop’s Community Trade ingredients in product ranges such as foot care treatments, and the impact of a Community Trade agreement on farmers in Nicaragua. The section also lists the number and type of non-compliances found in Body Shop’s supply chain. And it provides an in-depth description of the company’s approach to two topical issues: sustainable palm oil and sustainable wood sourcing. It is clear the company puts a premium on its Community Trade partnerships but there is little context about their scale, geographical location or value in relation to conventional sourcing.
Much like the company’s stores and packaging, the report has undergone a facelift from previous years. It looks more professional with good use of design features such as shaded boxes that guide the reader’s eye through performance summaries. But there are some design oddities, particularly charts in the environment section that are far too large. They occupy up to half a page followed by empty space. As a result, what could be covered on one page takes up two.
While the report deals with Body Shop’s core values it omits subjects that less experienced companies routinely cover, such as employee matters. Body Shop employs more than 10,000 people in 60 countries yet they merit less than one page out of 54. Some data on employee numbers by region, retention numbers and career opportunities should have been included. A summary of the type of employee challenges faced in different markets would also have been a good a addition. This seems like a missed opportunity to stress the international nature of the business and how it responds to the many cultures it operates in.
Glossing over
The glossy feel of the document extends to the content, which comes across as a little rose-tinted. This is evident from the start, with a chief executive introduction that fails to mention any challenges or put the report in the context of recent economic events and what they mean to the business. The report get better but never quite shakes off a tendency to gloss over challenges and setbacks or provide enough information to be truly open and honest. It does this most successfully in the environment section when talking about the challenges in achieving CO2 targets. But then it fails to provide an adequate explanation of why absolute and normalised emissions have risen despite energy-saving initiatives.
In other areas the document is frustratingly short of details. For example, it says two new ingredients are lined up for conversion to Community Trade in 2010, and others will follow. But they are not named and there is no indication of the impact they will have on the proportion of products with Community Trade ingredients.
This suggests rather ad hoc activity, confirmed by a recommendation from the stakeholder panel to develop a formal Community Trade model. This should have happened years ago. Similarly, only now is Body Shop beginning to develop a sustainable development strategy. As Alan Knight observes, “the next step is to have more strategic intent”.
Snapshot
Follows GRI? No
Assured? No
Materiality analysis? No, although the company says that stakeholder views influenced the report’s focus.
Goals? Some
Targets? Some
Stakeholder input? Yes – summary of stakeholder panel recommendations and independent expert commentary.
Seeks feedback? No
Key strengths? Responsible sourcing
Chief weakness? Too much focus on Body Shop’s values without a strategic direction.
Pleasant surprise? All soaps are made from RSPO certified sustainable palm oil.
Tom Branczik is a consultant for Context.
thomasb@econtext.co.uk
www.econtext.co.uk