Environmental
Performance Report

The Body Shop

Prepared by: Sue McSkimming
Background
4 4
5
Environmental Policy 6 7
Reference List 11
Background
The Body Shop is a well-established multinational company with over 2,500 stores in 60 markets worldwide (The Body Shop, 2011). Dame Anita Roddick opened the very first the Body Shop store in 1976 in Brighton, on the south coast of England. The Body Shop specialise in the production and retailing of skin care ranges, with an emphasis placed on developing natural and sustainable products. They carry a wide range of over 1,200 products for the body, face, hair and home, including body butters, make up, full skin care ranges as well as specialised men and baby ranges. As well as selling their products at brick and mortar retail stores they also have a direct-selling channel called the 'Body Shop at Home' which involves consultants selling products at organised parties in people's homes. This operates in two countries, the UK and Australia. Customers can also buy online in the UK, the USA, Canada, Australia, Korea and Japan. The Body Shop's mission statement includes the following:
-Dedicate our business to the pursuit of social and environmental change.
-Creatively balance the financial and human needs of our stakeholders: employees, customers, franchisees, suppliers and shareholders.
-Courageously ensure that our business is ecologically sustainable, meeting the needs of the present without compromising the future.
-Meaningfully contribute to local, national and international communities in which we trade by adopting a code of conduct which ensures care, honesty, fairness and respect.
Passionately campaign for the protection of the environment, to defend human rights, and against animal testing within the cosmetics' dustry.
-Tirelessly work to narrow the gap between p' ciple and practice, whilst making fun, passion and care part of our daily ves. in order to make sure that their business practices follow this mission statement, The Body Shop has created five core values. 1) Against animal testing, 2) Supporting community trade, 3) Activate self esteem, 4) Defend human rights and 5) Protect the planet. These values act as a practical guide to decision making at all lev~ of their company, helping them ensure that their profits are all made with principl~.
Environmental Issues
One of The Body Shop's values is to 'Protect the Planet', therefore practicing responsible environmental principles and encouraging strong climate change legislation is a priority for the company. The Body Shop has been campaigning on environmental issues ~6ht from the beginning in 1976 when being 'green' wasn't fashionable and p pie weren't as well educated on their effects on the environment as they are toet? . A number of years ago, The Body Shop decided to outsource its manufacturing. Although they no longer manufacture their own products, they still have a high interest in their environmental responsibilities in terms of the products they produce and the provenance of what they sell. As well as the manufacturing of their products, the retail stores also bring environmental issues for the company. Retail stores generate large amounts of waste, such as paper and cardboard as well as plastic and polystyrene packing. In addition to the large amount of the waste generated in retail stores a substantial proportion is passed onto consumers, in the form of packaging of the products and plastic bags used to carry them. Because waste has significant environmental risks, The Body Shop is constantly working on finding new ways to reduce and create more sustainable packaging. Retail stores also use a lot of energy. In a typical retail store, lighting, cooling, and heating represent about 60 percent of total use (ESource, 2006). As well as this, computer systems are often operating all day and display lighting is left on over night to attract sales and as a form of security. Another environmental issue for the Body Shop is transport of their products and people. They must work to find the bes~f transport, which uses the least amount of CO2.

Environmental Regulations
The Body Shop has voluntarily been practicing environmentally friendly principles for many years, before the new age of corporate responsibility and government enforced regulations. However, in Australia recently The Body Shop has joined with more than 50 other companies to sign a statement backing a change on putting a price on carbon. They believe that with the introduction of a charging for carbon use it will help reduce total emissions. In New Zealand the Government has chosen the Emissions Trading Scheme (ETS) as the least-cost way of putting a price on emissions and creating an incentive for all of us, especially businesses and consumers, to change our behaviour. Under the Kyoto Protocol, New Zealand has agreed to reduce its greenhouse gas emissions back to 1990 levels by 2012 or pay for any excess. The ETS puts a price on greenhouse gases to provide an incentive to reduce emissions, invest in energy efficiency, and plant trees. Some businesses in New Zealand have a legal obligation to acquire and submit their emission units, however the majority are not obliged but do have the choice to apply to opU to the scheme if they carry out any relevant activity. /

Environmental Reputation
The Body Shop has successfully developed a brand image of being a caring company that is helping to protect the environment, people and preventing the suffering of animals -whilst selling 'natural inspired' products. However, criticisms have evolved throughout the years about The Body Shop and the particular actions it has taken. The largest criticism came when The Body Shop, being the retailer of natural-based and ethically-sourced beauty products, announced that it had agreed to be acquired by the beauty giant L'Oreal for US$1. 14 billion on March 17, 200 () ~ . After this announcement The Body Shop came under huge criticism and the companies reputation was affected. The Body Shop was regarded by many as one of the early adopters of corporate social responsibility and caring for the environment before the 'green' movement which has occurred in recent years. By taking this approach and developing these values, the company had gained a loyal customer base who shared these values and respected the company. However, on the other hand, L'Oreal was viewed as the face of consumerism, a company that tested its cosmetics on animals, exploited the sexuality of women, and sold their products by making women feel insecure. On top of this, Nestle owned 26 percent of L'Oreal and was one of the most boycotted companies in the world for its alleged unethical business practices. The Body Shop's critics felt betrayed by this deal as the company had previously been quite vocal in their criticism of companies like L'Oreal. These critics called for a boycott of The Body Shop's products as they felt that the company had sold out its values and principles. The Body Shop defended the deal by saying that L'Oreal would not compromise The Body Shop's ethics and that the merge would allow The Body Shop a chance to extend its values and environmental beliefs to L'Oreal. L'Oreal also agreed and announced that The Body Shop's values would not be compromised and that it would continue to operate as an independent unit. However, many people felt The Body Shop would not be able to function independently and that an important player in corporate social responsibility had been lost. There were also questions raised about whether L'Oreal was trying to improve its image by buying the corporate social responsibility image that The Body
Shop had developed by supporting them and acquiring the company. Although consumer satisfaction of The Body Shop was found to have decreased by almost half since the acquisition by L'Oreal (The Independent, 2006) there has been a significant increase in revenue for The Body Shop, showing that people are still supporting and buying their products. In 2006 The Body Shop's revenue was £485.8 million, which has increased to £1,294.4 million in 2010 (Loreal Finances, 2011) showing substantial growth since the acquisition.
The Body Shop has also received criticism that they have misled customers by giving them the impression that all their products are made from natural ingredients. Where in fact they make wide use of non-renewable petrochemicals, synthetic colours, fragrances and preservatives in many of their products. Therefore, The Body Shop does now not claim its products are 'all-natural', but "inspired by ~

Environmental Policy
The Body Shops mission statement opens with the overriding commitment, 'to dedicate our business to the pursuit of social and environmental change'. The Body Shop is committed to being an environmentally responsible retailer and has clearly stated what their environmental policy is and how they commit themselves to achieving this. Their policy is based around being committed to the environment and this is done through minimising waste by using minimal packaging on their products, recycling materials, setting out clear policies to customers and suppliers and efficient use of energy in order to reduce their carbon emissions. The following has been taken from the Environmental Principles Report written in 2006, stating the companies environmental policy:
Our Commitments:
Supporting environmentally responsible materials and technologies by promoting the use of renewable resources and sustainable raw ingredients
-Minimising waste and resource use through minimal packaging and use of recycled materials -Minimising our contribution to Climate Change through efficient use of energy, use of renewable energy sources and offsetting of carbon emissions -Communicating clearly on our policies to customers and suppliers -Addressing stakeholder concerns by applying the precautionary principle when determining environmental and health impacts of our raw ingredients
We will ensure continuous improvement by: -Providing training and raising awareness among employees -Listening to stakeholders -Encouraging and assisting franchisees in raising standards
-Actively participating in focused initiatives to develop and promote sustainable raw ingredients
-Setting global standards for all company-owned operations
-Requiring all our business partners to adhere to relevant legislation and

internationally agreed conventions as a minimum
-Monitoring and reporting on our environmental performance

Environmental Activities
The Body Shops mission statement states that they will "courageously ensure thatj their business is ecologically sustainable meeting the needs of the present without compromising the future." The Body Shop is actively working to address the environmental issues that they face and reduce their impact on the environment in the following ways:
Retail Stores: The Body Shop has implemented a number of initiatives at their retail stores to try to minimise the amount of energy used. These include energy efficient specifications for all store refits, providing energy efficiency training for all their store staff and installing new sign and backlighting units which are 70% more efficient. By taking these measures the amount of energy use in retail stores has decreased significantly. The Body Shop also responded to the issue of excessive packaging by offering refills to their customers, avoiding the need to buy new bottles and jars. However, due to increased safety legislation in most markets they had to cease this service. Other ways they are trying to reduce packaging and waste include using simple bottles and jars with no secondary packaging, which are recyclable. In 2008, The Body Shop started introducing 100% recycled plastic bottles, becoming the first global cosmetics and toiletries brand to achieve this level of recycled material in plastic bottles. Also in 2008 The Body Shop replaced all of their in-store plastic bags with paper bags. The new paper bags are produced from 100% recycled paper meaning they don't directly contribute to deforestation. They are also 100% recyclable and biodegradable. Whilst the bag is strong enough to be re-used several times before recycling, customers are encouraged not to use disposable bags at all, and are offered The Body Shop "bag for life" which is made from cotton and lasts longer. This is designed to reduce the overall number of disposable bags that they need to produce as a company, resulting in a cost benefit.
Transportation of Products The Body Shop decreased their product transport CO2 emissions between 2007 and 2008. They are continuing to minimise their air freight wherever possible as this is the most CO2 polluting form of transport.
Source: The Body Shop Values Report 2009
Transportation of People Employees at The Body Shop are encouraged to use air travel as their last resort. The Body Shop has a strict travel policy and sign-off procedure to ensure that only essential flights are taken. They also encourage video conferencing to eliminate travel requirements, however being a global business sometimes flying is the only option. The Body Shop also has a hybrid car policy with 93% of their fleet being hybrid cars at the end of 2008.
Carbon Neutral
The Body Shop made a commitment in 2006 to become a 'carbon neutral retailer' by 2015. This would be achieved by reducing their emissions and making every effort to source renewable energy wherever possible and using offsetting is a last resort. The following graph details The Body Shops C02 emissions across the company since 2006. These figures exclude franchised market stores:
Source: The Body Shop Values Report 2009
The Body Shop is constantly seeking new ways to improve their business FJ ctices and reduce their carbon footprint. /

Assessment and Recommendations
The Body Shop has a set of values in which they follow to ensure their profits are made with principles. They are constantly working hard to find new ways of keeping their business practices true to these values and clearly layout our short, medium and long term objectives in order to achieve these. In the changing world, where people are becoming more environmentally conscious, there is a large demand for fresh focus, new ideas and new solutions. There is the potential for The Body Shop to introduce new products, as well as new technologies and practices of developing these products.
Although I support The Body Shops values and active participation in trying to reduce their impact on the environment, I personally do not shop at The Body Shop or own any of their products. I often have a look around in their store at the Golden Centre in Dunedin as it is opposite Reload juice bar, so I visit while I am waiting for my smoothie! I do enjoy the look of the shop and their products, with attractive displays, packaging and lots of colour, however I never get a sense of their products being natural or environmentally friendly. This may have something to do with the commercialisation image I associate with the company or the brightly coloured and synthesised fragrance of their products. I do admire The Body Shop for having been a major player in the "green" retail sector many years before awareness and popularity was generated. However, there are many new players in the market now who I prefer to support. The brand I am most loyal to when it comes to body wash and shampoo's etc. is EcoStore. I buy EcoStore products over The Body Shop products as it is New Zealand owned and their products seem a lot more natural, with neutral scents and no colouring. Their products are also cheaper in comparison to the Body Shop -a bottle of body wash at The Body Shop ranges between $12­$15 as opposed to an EcoStore body was that I can buy from the supermarket for $8-$9 (Countdown, 2011). Being a student, with little disposable income, this is important to me as I like being able to buy eco-friendly products however the ust be within a reasonable price range.
I feel that there is an opportunity for The Body Shop to really embrace their environmentally-friendly image and create products with natural ingredients, with much more neutral fragrances and colours. They could also change their packaging to be more sustainable, without using glossy labels and the like. This would appeal to people who buy Body Shop products based on the company values. However it could have an effect on consumers who buy their products as they would any other cosmetic product, who are just wanting a pretty bottle and a nice smell.
Reference List
The Body Shop. (2011). Retrieved from http://www.thebodyshop-usa.com on 5 October 2011.
ESource. (2006). Managing Energy Costs in Retail Buildings. Retrieved from www.esource.com on 5 October 2011.
Climate Change NZ. (2011). ETS: The Basics. Retrieved from http://www.climatechange.govt.nz on 5 October 2011.
The Independent. (2006). Body Shop Popularity Plunges after Loreal sale. Retrieved from http://www.independent.co.uk on 5 October 2011.
Loreal Finance. (2011) Body Shop. Retrieved from http://www.loreal-finance.com on 5 October 2011.
Countdown. (2011) Online Shopping Retrieved from http://shop.countdown.co.nz on 5 October 2011.
The Body Shop. (2009). Values Report: Living our Values. The Body Shop International.
Fernando, Rand Purkayastha, D. (2007). The Body Shop: Social Responsibility or Sustained Greenwashing?