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

Buzz No 3: COP this !

We've gone Beyond, we've been through complicity … now it's time for … coffee… nope, not yet …it's time for COP. Lots of buzz about COP in Istanbul. Actually, there are two types of COP. There is COP, or even notable COP. And COP15. (Don't ask me about COP 2 – 14). So let's make a start with plain ole COP and then move upstage to 15.

COP = Communication On Progress
This is what participants do once they have confirmed their participation in the Global Compact of the United Nations. You all know the Global Compact, right? It's a framework of 10 principles relating to the responsibilities of business to uphold human rights and labor standards, and to work to improve environmental impacts and anti-corruption. The UNGC has over 5,000 participants from all over the world and is supported by a web of networks who advance active application of the principles. It was in this context that I joined the Human Rights Working Group meetings last week in Istanbul. A COP is a mandatory annual communication for participating companies to publish the ways in which they are advancing the UNGC principles. Guidance on how to write a COP can be found here. A "notable" COP is one which the UNGC team finds to be particularly comprehensive and clear, and a model for others, for example here. Finally, businesses which do not communicate get kicked out. Which is as it should be, right ? COP is a kind of voluntary corporate disclosure, i.e. a report, which means that COPs fit perfectly into this reporting blog. Might just do a little COP analysis over the next few weeks. Once i get past the buzz.

COP15 = Copenhagen 15
This is way the climate-connected refer to the meeting which will take place in Copenhagen (COPenhagen .. COP … get it ? ), the United Nations Climate Change Conference on December 7 to December 18, 2009. It's a kinda climate change annual hot spot (geez, that pun thing again). The Kyoto Protocol, which was adopted in 1997, sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas emissions at the rate of an average 5% against 1990 levels between 2008-2012. At the 13th conference in Bali it was decided to work towards an agreement for the subsequent years. This agreement is to be negotiated in Copenhagen in 2009. Stakes are pretty high, it seems, as the influences on emission reduction decisions are dominated by economic-geo-political decisions, especially relating to China and India. By now, if you follow my blog, you will realize that I am not terribly competent about things environmental, so I contented myself with a quick look at the conference guide. Connie Hedegaard, the Danish Minister for Climate and Energy says : “We must move the world from an era of talk to an era of change” In this spirit, it is important to know that attending Heads of State will be offered eco-friendly transportation, and other conference travel will be offset. Towels in hotels will be shared on a one-to-four-rooms basis, and specially constructed conference seating will enable participants to peddle in-situ to generate energy to power their laptops. (so what if I got a little carried away). Follow the conference on Twitter , Facebook , take the climate quiz (I got 7 out of 10, which proves that this quiz was designed with first graders in mind, and it helps if you are Danish). I can't help being impressed with the locations of all these climate change conferences: Berlin, Rio, Kyoto, Bali, Copenhagen, New Delhi, Poznan, Marrakesh, Milan, Nairobi, Montreal etc … how about next year in Darfur, Mogadishu, Gaza, Karachi, Teheran or Baghdad ? Anyway, you have until Dec 7 to place your bets on COP15 outcomes. Cop that?

What else was buzzing in Istanbul ? Stick around to find out. It was a really buzzful week.

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

Buzz No 2: Complicity aka the Ostrich Defense

Buzz number 2 from the Global Compact meetings in Istanbul : Complicity.
Websters definition: com·plic·i·ty
1 : association or participation in or as if in a wrongful act 2 : an instance of complicity

So here you will understand that complicity always has an association with something negative or wrong. Like, its bad, ok ? And in the context of sustainabilty, and human rights in particular, complicity is an important concept. And one which came up several times in the course of discussions on labor standards and human rights at the Global Compact Human Rights Working Group Meetings last week in Istanbul. This reminds me of a fashion show with the theme of sustainability that my client comme il faut staged last year. All the models in the fashion show walked the walk with their hands over their ears, eyes and mouth, denouncing corporate and even consumer attitudes. Hear not, speak not, see not. As though what we ignore doesn’t exist.

.

This has been pretty much the attitude of corporations over the years in relation to human rights in their operations and their supply chains, and the way the products they produce are used. The assumption was that if you outsourced it, it was no longer your responsibility. If you sold it, it was the buyer's responsibility. If you passed on the responsibility, then you were left with none. Well, the concept of complicity blows this notion right off the validity radar.

Let's take a first look at what is expected of corporations with respect to human rights. The mother document for human rights is of course the Universal Declaration of Human Rights of the United Nations. This was approved in 1948. Ever read it? Did you know that you had ALL THOSE rights, just be virtue of being you? I would be a little interested, if I were you. (I proposed that the UN add the right to a daily serving of Chunky Monkey, but the High Commissioner has yet to pronounce on that one). I had to smile at the recent Marks and Spencer plc CR Report 2009 which states on page 38: "Our employment policies meet the requirements of the United Nations Universal Declaration of Human Rights." Sorry, M&S. The UDHR is not an Employee Handbook. For a start, it doesn’t contain dates of all the office parties for the next 5 years. Wonder how many of the M&S Human Resources team actually read the UDHR . Still, full marks for good intentions, eh ? (oops, bad pun, get it ?)

What M&S should have referred to is the ILO Declaration on Fundamental Principles and Rights at Work. Adopted in 1998, this " is an expression of commitment by governments, employers' and workers' organizations to uphold basic human values - values that are vital to our social and economic lives." The ILO declaration is based on 8 conventions "that should be considered as fundamental because they protect basic workers rights".
These are:

• Freedom of association and the effective recognition of the right to collective bargaining
• The elimination of all forms of forced or compulsory labor
• The effective abolition of child labor
• The elimination of discrimination in respect of employment and occupation

The Labor Principles of the Global Compact ( principles 3 – 6) are the expression of these principles with regard to the responsibility of businesses. But then, you all knew that, right ?

So what does this mean for corporations and where does complicity come in to the picture?
Well, this post by Christine Arena, author of the High Purpose Company, one of the best books around and worth a read, makes reference to the $15.5million settlement by Royal Dutch Shell who was accused of complicity in the execution of Ken Saro-Wiwa and others in Nigeria. Shell didn’t actually order the executions nor is there any evidence to suggest they were directly involved. But there is plenty of evidence, including letters of thanks to those who made ole Ken's life a little difficult, to suggest that Shell not only knew what was going on but privately encouraged the oppression of the Ogoni tribe's opposition to Shell's activities in Ogoniland.

Another example: Nike's Indonesia Manager, then John Woodman, is quoted as saying back in 1994, when asked about problems at the company's subcontracted plants. "I don't know that I need to know," he explained. "It's not within our scope to investigate.". This was termed "The Ostrich Defense". Wonder why?! Nike's tune is a somewhat different now of course. And there are many more examples and many more quotes. But I gotta end this long post sometime before the end of this century, and I think I have made my point.

There are clear frameworks for upholding human and labor rights in all parts of a business's operations. Corporations must make it their business to know, and be responsible for, and account for, what goes on in their supply chains. And I have just skimmed the surface of this complex subject.

But back to complicity. This is a good piece by Amnesty International. If you are really keen. When you think that there are STILL 12.3 million people in forced labor, and STILL 218 million, yes, 218 million kids, in child labor, then you kinda get that complicity still plays a role in our supply chains around the world.

Next post. Chunky Monkey. Oops, sorry, not. Something else from Istanbul. Betcha can't wait to find out, right ?

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