Case 6: The Body Shop Flashcards
Values of The Body Shop ?
1) Against animal testing
2) Support community trade
3) Improve self esteem
4) Defend human rights
5) Protect the planet
What did they do against animal testing (1. value)?
Could one argue that they did greenwashing here?
- Several campaigns
- did not perform animal testing for their products
- 1996: biggest petition against animal testing
- initiated changes in law, e.g. petition with 4 mil signings -> UK banned animal testing
=> BUT (greenwashing):
o ingredients of some products might be tested on animals by other companies
o L’Oréal, the new owner, uses animal testing
What did they do to support community trade (2. value)?
Could one argue that they did greenwashing here?
- Community Trade Products (CTP): Sourced products from marginalized communities for a fair price (“half of their products” included at least on CTP-sourced ingredient)
- Initiated fair trade
BUT:
o CTP accounted less than 1% in revenues (BS created another image of huge impact as “half of their products” included at least on CTP-sourced ingredient)
What did they do to improve self esteem (3. value)?
Could one argue that they did greenwashing here?
- Several campaigns that supported diversity and health instead of misleading product promises and thin models
- Global campaign against domestic violence where they raised money through recycling mobile phones
BUT:
o Beauty ideal on website is no different from other companies
What did they do to defend human rights (4. value)?
Could one argue that they did greenwashing here?
- BS ensured that the products were sourced and produced in regions where human and civil rights were respected
- Founding member of the Ethical Trade Initiative (ETI)
BUT:
o Critics say they pay low wages
o They are against unions – thus showing they want to keep control over their employees such that they don’t improve working conditions
What did they do to protect the planet (5. value)?
Could one argue that they did greenwashing here?
- Supported materials and technologies that caused minimal harm to the environment
- Promoted the use of renewable resources and sustainable ingredient
- Customers can recycle packaging in stores
BUT:
o Contribution to charity was less than 1.5% of pre-tax profits
o Former employees said: Use of chemicals even though BS claimed not to
What is greenwashing?
Greenwashing = disseminating a misleading picture of environmental friendliness and providing misleading information about how the products of a company are more environmentally sustainable. For example, when a company spends more effort on advertising their sustainability actions than on these actions in order to improve the public image and mislead the customers. It’s basically an attempt to profit from the growing demand for sustainable products by signaling to do good. If companies are genuinely green, they will back up their claims with facts.
Arguments pro BS was guilty of greenwashing?
- initial public offering signals that the focus is on finance and not on values
- profit driven -> acquisition by L’Oréal
- problems with products; use of chemicals though claimed the products are natural –> not that different from competitions
- low wages for store workers, no unions
- only 1.5 percent of pretax profits for charity (=average of US companies)
- Made it look like CTP has huge impact but only accounted for 1% of selling -> marketing-driven
=> CTP as marketing strategy - products contained ingredients tested on animals by other companies
- values report only in some years (inconsistency)
- Roddick turned down takeover by Lush because its founder was not ethical enough but agreed to takeover by L’Oreal some years later (L’Oréal is company known for practices that contradict the values of BS and who is partially owned by Nestlé, a company known to be “least responsible”)
Arguments contra BS was guilty of greenwashing?
- transparent according to reports
- initiated CSR movement -> pioneers in many ways (value reports, greenbook, against animal testing, improving self-esteem, CTP, campaigns for human rights, …)
- marketed its products honestly without misleading promises
- initiated some real changes, e.g. law against animal testing
- many awards
- Roddick seems to be credible
Link to CSR theory: Body Shop in Carolls Model?
- Philanthropic Responsibilities: No, didn’t contribute company resources to community.
- Ethical Responsibilities: Yes. They used natural ingredients and were pioneers in many CSR activities. For example, they supported customers self-esteem and started campaigns against domestic violence. However, after the L’Oréal acquisition critics might say that the acquisition by L’Oréal is not ethical since L’Oréal and its owner Nestle are not really ethical.
- Legal Responsibilities: Yes, they obey the law.
- Economic Responsibility: Yes, their business model is profitable.
Link to CSR theory: Body Shop in the visions of CSR?
BS fits to the second vision (delegated philanthropy, the firm as a channel of expression of the citizens values):
BS says they do many social things, e.g. fair trade, animal-friendly and green products. Thus, BS attracts customers as the demand for CSR is growing and customers can create a good feeling/set a statement by buying at BS. Also, customers can recycle the plastic packaging in stores and by buying BS’s products, they show that they share the same values. However, the growing demand for CSR provides incentives for BS not only to act good but also just to signal doing good (dark side of image concerns), i.e. greenwashing. One could argue that BS (= disseminating a misleading picture of environmental friendliness) is guilty of greenwashing in order to attract many customers. (Arguments see above)
