The Body Shop takeover could mark 'major turning point' in corporate sustainability movement

The recent takeover of The Body Shop by an ethically-minded global cosmetics firm could represent a "major turning point" in the transition towards the private sector operating as a "force for good".

Chris Davis believes the takeover could spark a fundamental shift in boardroom executives favouring long-lasting responsible behaviour over short-term profit

Chris Davis believes the takeover could spark a fundamental shift in boardroom executives favouring long-lasting responsible behaviour over short-term profit

That’s according to The Body Shop’s international director of corporate responsibility and campaigns Chris Davis, who described this month’s purchase by Natura from French beauty giant L’Oreal as a “dream come true”. The €1bn deal brings together three companies, Natura, The Body Shop and Aesop, which have all displayed a historic commitment to sustainable and ethical approaches.

Natura, Brazil’s largest cosmetics firm with operations across Asia, Europe and North America, became the first publicly traded company to attain B Corp sustainability certification in 2014, and ranks 19th in the latest Corporate Knights report of the world’s most sustainable companies.

The firm’s CSR commitments includes a series of partnership agreements with Brazilian communities to ensure its ingredients are sourced with respect for the environment, while investment in an education programme has given more than 2.6 million young people and adults the opportunity to learn to read and write.

And with a shared belief in key principles such as promoting fair trade and sustainable packaging materials, Davis believes that the new business makeup provides an ideal platform for The Body Shop to create iconic natural beauty products in a truly sustainable manner.

“What we’re seeing is the creation of this company, three multi-million pound brands, all dedicated to a triple bottom line,” he said. “I’ve not seen anything like this before. I’ve not seen a group of likeminded, philosophical companies come together, saying ‘this is what we’re going to do, and this is how we will be judged on that’, and it’s a really amazing thing when you think of it like that.”

‘Turning point’

Immediately after the acquisition, Natura’s founders delivered a message to employees at The Body Shop’s head office, where the company’s late founder Dame Anita Roddick had developed the firm’s principles on ingredients and testing. The founders reassured staff that they would keep the legacy of Dame Anita alive, a message which evoked “very powerful, emotional” feelings among Body Shop personnel, Davis said.

He believes the move could spark a fundamental shift in boardroom executives favouring long-lasting responsible behaviour over short-term profit, citing Kraft Heinz’s failed takeover attempt of Unilever earlier this year. That deal broke down after Paul Polman insisted that there was no appetite at the boardroom level for a deal centred on financial short-termism.  

In a similar vein to the long-term strategy that underpins Unilever’s Sustainable Living Plan, Natura has in place a strategic sustainability vision for 2050, hailed by Davis as a “massive statement”. According to Davis, these emerging business models, acutely focused on long-term sustainable growth, could provide a catalyst for positive change across the private sector.

“Maybe this could be the beginning of something,” he said. “It could be a major turning point of how we see the need for business to be good. People have always challenged the notion of scaling up business for good and when companies come out and saying ‘we’re going to be good, we’re going to be dedicated to it, we’re going to look at long-term profit’, you are always a bit sceptical.

“What we’ve got here is a business that is saying, ‘we’re in this for the long-term, we’re in this to drive sustainable growth, to deliver positive impacts’. Yes, absolutely to our shareholders, because profit is going to drive our success, but in equal measures, environmental and societal measures are critical to us. We measure our success on those three metrics. I hope we can look back and say this was a turning point for us.”

Force for good

By Davis’ own admission, The Body Shop had started to lose it ways under Loreal’s ownership. Sales have been in steady decline in recent years, in part to due to a watering down of the firm’s environmentally-friendly brand image.

But rather than dwell on previous shortcomings, Davis insists that he and his new colleagues are eager to focus on how a revitalised CSR strategy can be coupled with a strong financial performance.

“Certainly I would say we have been too quiet as a company. I would say that the experience of working within the L’oreal group has been challenging for us and our freedom at times. That has had an impact on how we’ve been able to speak, think and act. We know that the culture was not perhaps one we would want to embrace at The Body Shop, but we move on.

“New colleagues of Natura absolutely don’t want to look backwards at what we could or should have done or how bad it was. They are just saying, ‘we know what moves us forward, we know what our purpose is, let’s go back to doing what we’re really good at', which is driven by the philosophy that business can be a force for good, that trade done fairly can be a route out of poverty for many millions of people.”

Enrich not Exploit

Looking ahead to the future, The Body Shop will aim to make progress on its goal to become the world's "most ethical and truly sustainable business". In 2016, the retailer launched a new ambitious global sustainability strategy - Enrich not Exploit - which incorporated 14 specific, measurable CSR targets for 2020.

While solid work has been laid down towards realising specific ethical goals such as ensuring 100% of The Body Shop’s natural ingredients are traceable and sustainably sourced, progress in other areas, such as carbon reduction, has stalled. Davis insists that, while a steep curve will be required in the upcoming years, the collective positive mindset of a reenergised workforce will prove crucial in helping The Body Shop achieve its objectives.

“The progress so far is pretty good but of course it could be better,” he said. "The targets are quite challenging but that’s the point of targets. What am I expecting to see over the next couple of years, and indeed decades? I’m expecting us to drive forward with our quest for true sustainability, hand-in-hand with Natura.

“We have got some work to do. We are still determined to hit those targets. We’re not doing as well as we would like, and we will try and improve where we are not doing very well, and we will continue to be very honest about that.

He added: “The one greatest thing I have learned over the last five years is that a business’s culture drives its mindset, and its mindset is the magic ingredient to any company. The mindest of our people is the critical thing, and that’s why I love our franchise, and that’s why it works so well.

"Our people have such a deep belief about what we stand for, and Natura do too. They don’t have to do it, they have a choice, but they have a deep belief in what they do. And for The Body Shop, a revival of that mindset is only going to improve our activities, happiness and results.”

George Ogleby


Tags

sustainable business | Corporate Social Responsibility

Topics

CSR & ethics
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