Businesses have been under growing pressure to extend their obligations towards global communities, encompassing a broader array of human values. It is clear that fulfilling social responsibilities holds great significance, as prominent multinational companies such as Nike, Reebok, and Nestle have suffered considerable harm to their reputation for not meeting social responsibility criteria.
The sustainability concept, also referred to as the triple bottom line, has been thoroughly examined and debated in academic and practical contexts. Its objective is to ensure that businesses give equal importance to economic performance and social responsibilities. This essay aims to offer a comprehensive evaluation of the current understanding of the triple bottom line or sustainability concept. Additionally, it will evaluate The Body Shop Corporation, a company renowned for its dedication to environmental consciousness and its groundbreaking initiatives in incorporating sustainable practices within its operating communities.
The purpose of this essay is to examine the Body Shop case and explore the notion that corporations have a duty to enhance societal well-being in their operational contexts. The concept of corporate social responsibility emerged in the early 19th century, coinciding with advancements brought by the industrial revolution, which provided workers with housing and basic amenities. Over time, this idea became deeply embedded in corporate culture, emphasizing the significance of addressing the interests of various stakeholders such as shareholders, employees, suppliers, communities, and customers (Thompson et al., 2007).
Throughout the decade, there has been significant progress in developing the concept of acting responsibly in response to societal demands. However, many multinational corporations have disregarded this principle, resulting in unexpected financial setbacks. An example of this is the sweatshops controversy that arose in the 1990s involving child labor within Nike’s subcontractors situated in impoverished nations. This socially irresponsible conduct led to a substantial decline in Nike’s global business as customers boycotted their sportswear products. As a result, Nike suffered considerable financial losses and had to undertake marketing campaigns to rebuild its reputation (Luthans and Doh 2009).
John Elkington introduced the concept of the triple bottom line in 1995, which encompasses social, economic, and environmental responsibility. Referred to as ‘People, Planet, Profit’, this principle has since been widely adopted in global business strategy and decision-making. It has become a crucial aspect of modern corporate practices.
Critics have differing opinions on the application of theory in organizations. Some argue that it mainly serves to enhance the organization’s public image (Schilizzi 2002), while others believe it promotes engagement in socially and environmentally responsible activities (Cheney 2004; Brown, Dillard, and Marshall 2006). However, it is evident that businesses cannot ignore their responsibility to society. Instead, they should strive to operate honorably and show a social conscience (Thompson, Strickland, and Gamble 2007, p.42). This emphasizes the significance of considering how business decisions and actions impact humanity, employees, local communities, the environment, and society as a whole while also affecting their economic performance. Therefore, whether operating locally or globally, companies must demonstrate social responsibility and adhere to the triple bottom line for survival and success. Additionally, sustainable action by corporations requires building trust and respect from all stakeholders.
The concept of the triple bottom line, or more precisely Corporate Social Responsibility (CSR), will serve as a guiding principle in analyzing and evaluating The Body Shop’s socially responsible business behavior in the following sections. Firstly, The Body Shop has garnered significant attention due to its dedication to social causes and its core business values. Anita Roddick established the company in 1976 with the aim of providing financial security for her family.
The initial business strategies were applied in a unique manner against commonly accepted beliefs. Sir Roddick pioneered the use of natural ingredients in a wide range of cosmetic products and simplified packaging. Instead of extensive advertising, the company cleverly positioned itself as an underdog. It was well aware of the growing popularity of natural cosmetic products and openly declared that its products were free from any ingredients derived from animal exploitation.
The Body Shop adopted a new approach to product testing, opting for tests on volunteers instead of animals. This decision was motivated by the belief that animal testing was cruel, despite its prevalence in the toiletries and cosmetics industry (Dennis, Neck, and Glodsby 1998; Kent and Stone 2007). Furthermore, The Body Shop actively encouraged its suppliers to sign agreements pledging to abstain from any animal testing within the past five years or in the future (Ven, Nijhof, and Jeurissen 2009). This commitment has since become one of The Body Shop’s core values, differentiating it from competitors.
The company’s core values are as follows:
- Against animal testing: Testing products or ingredients on animals is considered morally and scientifically indefensible.
- Support community trade: Small producer communities around the world who supply accessories and natural ingredients are supported by the company.
- Activate self-esteem: Each individual is treated individually and their individuality is respected by the company.
- Defend human rights: It is believed by the company that every individual has a responsibility to actively support those whose human rights have been denied.
- Protect the planet: The company believes it is every business’s responsibility to protect the environment in which it operates, both locally and globally.
The Body Shop is renowned for its ethical business model, which is founded on explicit ethical principles (Pearce and Doh 2005). A code of ethical conduct is vital for the company to be recognized as an ethical corporation (Knight 1998). Experts and professionals alike concur that cultivating trust, promoting a culture of learning, and implementing knowledge-generation systems are crucial elements in realizing the fundamental value of sustainability within an organization (Livesey and Kearins 2002).
In order to build trust among stakeholders, The Body Shop emphasized the significance of transparency and openness. They believed that this approach would not only foster organizational learning and knowledge enrichment but also contribute to achieving business objectives (The Body Shop 1998). According to The Roddicks’ statement, the support from stakeholders would not only benefit the business but also enhance operational effectiveness by leveraging their knowledge and contributions (The Body Shop 1998, p4).
The Body Shop has always been at the forefront of enhancing its auditing and data collection processes, as well as enriching its understanding of products, to demonstrate progress. The company has also improved its internal communication system, making sure that its environmental and social policies and practices are easily accessible to the media and public. Moreover, The Body Shop is known for its innovative approach to employee welfare. This is exemplified by initiatives like remunerating voluntary work, which represents a prominent embodiment of corporate social responsibility.
The Body Shop 1996 and Sodeman 2003 state that the company is willing to pay half of a day’s wage to staff who choose to participate in community services. These innovations are essential for building trust, reliability, and promoting ethical values within the business model. Additionally, Dennis, Neck, and Goldsby 1998 highlight The Body Shop’s impressive track record of social responsibility. This includes charitable donations, campaigns against domestic violence, and the Trade not Aid program – all showcasing the company’s dedication to ethical practices.
Since it was established, the Body Shop has made charitable contributions to various communities. These include selling a total of 3.5 million shares to the public to support child abuse prevention, women’s issues, and the funding of an art museum in 1994. They also donate 3 percent of their before-tax profit to charity funds, as well as contribute to other occasional charities. Notably, the Body Shop has created the ‘Trade not Aid Program,’ which aims to assist developing countries by engaging in trade with their suppliers rather than simply giving them money.
The Body Shop stands out in the global market and has experienced rapid growth due to its innovative social actions. For instance, the company purchases nut oil from Kayapo Indian villages in rainforests at prices higher than the market rate (Rosenthal 1994). Moreover, environmental concerns are a priority for The Body Shop. One notable initiative is green packaging, which focuses on reducing, reusing, refilling, and recycling cosmetic containers (Mehegan 1996). In contrast to other global cosmetic corporations struggling with wastewater management, The Body Shop was recognized as the first international cosmetic corporation to successfully address environmental challenges. They achieved this by installing an on-site Living Water Waste treating system that uses an experimental and ecologically sustainable approach to process raw production waste (Roderick 1993).
The Body Shop was recognized as the top environment-friendly company in the United Kingdom in 1997 due to their contributions to environmental protection (Boulton 1997). Despite receiving accolades for their pioneering efforts in social responsibility, there are additional aspects that the Body Shop should address as a sustainable corporation. Firstly, the Trade not Aid program, which aims to benefit developing countries, has faced public skepticism despite being extensively promoted.
Critics argue that the Body Shop has not disclosed the specific percentage of its raw ingredients sourced from certain countries (Bavaria et al. 1994). This lack of transparency could result in farmers receiving less benefit if a smaller percentage of raw materials is obtained, ultimately benefiting producers instead. Moreover, evidence suggests that despite marketing their products as natural, many of them actually contain synthetic ingredients (Bavaria et al. 1994). This contradiction contradicts the ethical commitment consistently proclaimed by the company since its inception. Unfortunately, the recent shift from purely natural to naturally-based product range supports doubts about their natural claims’ validity; Entine (1997) asserts that most naturally-based cosmetics only include a few natural ingredients. It is evident that the Body Shop’s environmental friendliness may not be as genuine as advertised.
The company’s commitment to donate 3 percent of its before-tax profits to charity appears to have been unsuccessful, which is disappointing. According to Entine (1995), the company did not make any donations during the first nine years of its operations, greatly falling behind the promised amount. These actions have negatively affected the Body Shop’s reputation as a role model for social responsibility and business ethics (Kurschner 1996). There has been significant debate about whether or not the Body Shop is truly a sustainable corporation, and it is evident that there are further steps the company could take to address its own challenges and alleviate public doubts.
The ethical and sustainable business practices of Roddicks core values have been highly regarded by critics. However, the company should consider implementing measures for each aspect of corporate social responsibility. Various academic discussions recommend clear application of economic, environmental, and social measures in the business model (Slapper and Hall 2011). By examining these categories, the Body Shop can assess its current approaches and make appropriate changes according to specific requirements.
Furthermore, the Body Shop must not deviate from the initial promises and philosophy made by the Roddicks, as it has been unable to keep up with its business growth. The company’s sustainable production practices have not been able to keep pace with the rising market demand, which could harm its reputation. It is imperative to reassess and develop new sustainable commitments that can guide the company in this new era. Moreover, since its acquisition by L’Oreal in 2006, the Body Shop has gained fresh prospects to reinforce its existing values in alignment with contemporary CSR approaches.
The Body Shop could benefit from SkinEthic’s development of new technology that tests cosmetic products on artificial human tissue. This technology was recently acquired by L’Oreal. Fortunately, The Body Shop is able to maintain its claim of ‘non-animal testing’ for its products. Many international corporations find it more effective to seek new technologies instead of sticking to old techniques in order to fulfill their commitments to society. It is important for individuals to decide whether they consider The Body Shop as a typical example of Corporate Social Responsibility (CSR) or as a socially irresponsible company.
Organizations must prioritize sustainability as it directly impacts their success and survival. The Body Shop has prioritized sustainability by focusing on two themes that appeal to the cultural creatives. They have developed products and a corporate image that align with social and ecological values, providing both tangible and intangible benefits. Additionally, they have influenced the cosmetic industry by promoting body care as a lifestyle choice, making a significant industry-wide impact.
Despite its dedication to society, The Body Shop still has a long way to go in order to become a sustainable corporation. It must address various shortcomings as it continues to grow and contribute to the global business landscape. Furthermore, it needs to serve as a positive example of corporate social responsibility.
References:
Bavaria, J., Becker, E., and Billenness, S. (1994). “Body Shop scrutinized.” Insight, September 15.
Boulton, L. (1997). “Body Shop tops league table of ‘green’ reports.” Financial Times, London Edition, February 2, p. 12.
The Body Shop International (1996) provided The Values Report 1995. In 1998, the same organization released The Road Ahead: A Summary of The Body Shop Values Report 1997. A study by Brown, D., Dillard, J., and Marshall, R.S. (2006) from Portland State University discussed the concept of the triple bottom line as a business metaphor. Cheney, G. (2004) explored the corporate conscience and the triple bottom line in Accounting Today. Dennis, B., Neck, P.C., and Goldsby, M. (1998) conducted a study on Body Shop International and its corporate social responsibility in Management Decision. Elkington, J. (2004) discussed the triple bottom line in The Triple Bottom Line: Does it All Add Up?. Entine, J. (1995) and Entine, J. (1997) provided articles on The Body Shop in Drug & Cosmetic Industry. Lastly, Kent, T., and Stone, D. examined the role of design in retail branding for The Body Shop.
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