Friday, June 26, 2009

The Lóreal paradox..for better and for worse....

The paradox of corporate responsibility is that there are companies that can be both soooo positive and soooo negative at the same time. What does it take to say a company is corporately responsible ? That the critical mass of good things outweights the bad things ? Or that there are only good things ? Or that there is just an absence of bad things ? Should we accept that all corporations are basically irresponsible and not accountable for all their impacts. But that some have embarked on a route to address and account for some of them. The case in point featured in this post is the cosmetics giant L'Óreal. You've heard of L'Óreal, right ? Two news items about L'óreal. First. the good news:

L'Oréal Sets Green Goals and Promotes an Eco-Responsible Business Model

L’Oréal has renewed three long-term environmental targets for the period 2005-2015, applicable to its factories and warehouses:

  • Halve its greenhouse gas emissions: In 2005, the total CO2 emissions were 230.3 thousands of tonnes.
  • Halve its water use per unit of finished product: In 2005, the water consumption was of 0.72-litre per finished product.
  • Halve its waste generated per unit of finished product. In 2005, the waste generated per unit of finished product was of 32.2 grams.

What i like about the GHG target is that it is a firm commitment measured in absolute terms against the Company's own performance. Not per employee, not per site, not per unit. The total GHG's unrelated to business growth. Water and waste targets are per unit... which i find frustrating as L'oreal produces so many units of so many product types and sizes that this target doesnt say much about the Company's total impact. I looked at L'óreals 2008 CR report to see where they were 2 years after the original targets - 20% of time gone (2 years out of 10):

  • GHG emissions : 2005 - 229.7 ktons, 2007 - 218.2 ktons - 5% reduction
  • Water consumption per finsihed product: 2005 - 0.72 litre, 2007 - 0.65 litre - 10% reduction
  • Waste per finished product: 2005 - 32.1 gram , 2007- 29.9 gram - 7% reduction

Seems that there is still some way to go. Total GHG and water reduced over this period, total waste remained static. Interesting thing is that nearly 30 grams of waste is generated for each finished product. I wonder if that includes the packaging. Probably not. But in any event, for a cosmetics company whose products are mainly low weight, 50, 100, 500 grams .... this seems like a helluvalotta waste, no ? but good consistency in reporting regularly against these good aspirational targets. So good news for L'óreal.

And now for the BAD news:

French cosmetics giant L’Oréal guilty of racial discrimination

L’Oréal was " found guilty of racial discrimination for considering black, Arab and Asian women unworthy of selling its shampoo" brand named Garnier .The court ruled that Adecco, the temporary recruitment agency who hired the hostesses, was also guilty of racial discrimination. The Paris Appeal Court fined both L’Oréal and Adecco €30,000 (£25,500) and ordered them to pay a further €30,000 each in damages to SOS Racisme, the anti-racist campaign group, which brought the case. The court was told that Garnier’s hostesses were ordered from the recruiting agency and told be aged 18 to 22, wear size 38 to 42 clothes (British sizes 8 to 12) and be “BBR”. BBR, for the uninitiated is "bleu, blanc, rouge" or the colors of the French flag.

Now, L'Oreal declare that diversity is a basic value and their commitment is "To promote the self-fulfilment of its employees within a multicultural, stimulating community, rich in diversity and talent, to which all individuals contribute their creativity and enthusiasm." Heart-warming, right ? L'Óreals 63,500 staff is made up of 62% women of and 56% managers are women. 35% of mamagement committee members are women, quite a high level amongst reporting companies. Additional data on diversity from the CR report for 2008 is :

  • 21% of managers are from minorities
  • 34% of the total workforce are from minorities
  • 32% of new managers recruited in 2007 were from minorities
  • Increased spend with women and minority owned firms.
  • Over 3,000 employees have completed diversity training.

So what went wrong ? The whim of the Garnier brand manager? The lack of judgement of the Adecco manager ( a woman!) who determined the specification for the models? Profit before values ? Hard to say... L'oreals CR report, and its credibility, does provide some balance for this pretty damning incident, which is reflective of the draconic practices in the beauty industry with the creation of supermodels and idealization of women, causing great negative impacts on the position of women in our society.

So L'oreal, pay up and shape up. Not the BBR way, the ECITR way. Which for the unititiated means :every color in the rainbow.....

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm based in Israel. Visit our website at: www.b-yond.biz/en

3 comments:

Lavinia said...

Elaine,

Did L'Oreal buy Anita Roddick's Body Shop?

If so is that run as a separate company or included in their CSR reporting.

I think your report is thorough and you are really touching on some serious new metrics after your gender post. The notes you make regarding diversity are outstanding.

CSR for years has been primarily focused on metrics of environment and health.

Now I see you pointing out some valuable new thought. I went to the ISO 26K site this morning and discovered they have not defined the CSR metrics yet. I think this new generation of CSR is going to be astounding.

Thanks for writing up your views and what you do. You are adding in a considerable way to what I think about in terms of how to bring empower a new culture of SR and Sustainable Education in local community with a global view in business or any sector.

elaine said...

thanks Lavinia, this was an old post from last year, and Loreal bought Body Shop in 2006. Must have got past your radar, though there was a lot of talk at the time about loss of Body Shop core values, much as there is now with Kraft Cadbury takeover. I believe Body SHop continues to run as a separate entity and reports separatly. Thanks for reading my blog and commenting, and I am please to contribute to the way you are developing your own important initiatives.
warm regards, elaine

Lavinia said...

Just for the record, Gary Hirshberg, CEO of Stoneyfield Yogurt addressed the issue of sustaining core values in a merger as critical to part of the negotiation. He claims Stonyfield has been able to sustain itself. He talked about this in his book, STIRRING IT UP.

I am indeed beginning to blog about the emerging new Sustainable sector, because I believe at least in the US, companies e.g. Stonyfield
and Roddick operated from a set of core values that many of the initial people in social ventures did not understand. Roddick and Hirshberg created jobs and did not operate core groups of decision makers that operated for the success of the owners. This is why so many companies are now under fire re: hiring and creating new jobs. But I will say more at my blog.

Thanks, Elaine.

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