David Coethica's Blog

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L’Oreal – Because Sustainability Is Worth It

with 4 comments


If beauty is merely in the eye of the beholder, nobody has told L’Oreal.

They have 66,000 employees, sell 161 products every second in 130 countries and produce 5.4 billion products every year.

Yesterday saw L’Oreal step up its sustainability engagement with the first of four planned global stakeholder engagement forum events, with the first held in London.

My expectations were similar to those before the Microsoft Accelerator Summit I was invited to last year, i.e. not huge due to minimal information sent beforehand, me being a busy 3BL Media bee and L’Oreal never over energetically communicating their activity, all against a backdrop of a couple of  slippery issues including animal testing and the acquisition of Body Shop part of their history.

Much more information on their sustainable development approach is available online here, but I’ll give you a brief perspective on the event and some of the key issues below.

The headlines include the company looking to double their business by 2015 whilst reducing CO2 by 50%, waste by 50% and water use by 50% (across the period 2005 – 2015).

L’Oreal are keen to use the term “sustainable consumption” (always brave) in their latest report and push an aspirational luxurious brand image; add the above mentioned scale, alongside historically challenging product testing practices and you could consider placing them near the top of the corporations to pick on list. Let’s put sustainability aside for one moment, it is easy to miss the link between the abundance of cosmetic products sold to consumers and the reality of our human ancestral use of natural dyes and colourings to define tribal groups and to communicate. In other words lipstick is a central part of civilisation and has been around in one form or another for thousands of years and is not going away any time soon.

Okay, back to the stakeholder forum…

Following a charismatic presentation from Francis Quinn, Director of Sustainable Development,  the conversation veered quickly toward communication. After seeing the ambition of their sustainability targets it surprised myself and others that such boldness seldom extends to the communication function companies, again like Microsoft. Yes, both organisations have reputation skeletons in the closet and you can almost see the inertia preventing them sticking any heads above any parapets, but taking some risk, especially when so much is at stake, is what leadership is about.

The conversation centred on challenging L’Oreal to fully embrace its leadership position to explore various communication channels and how to break through any perception of potential brand damage by becoming too overtly sustainable. How can a mainstream brand educate and raise awareness without losing its mainstream consumer base? I personally don’t think they would, they’d only gain those who appreciate the bigger picture but I can understand the reticence, after all they’re not my profits to lose. Regardless, when your consumers are responsible for 58% of the carbon emissions within the life-cycle of your products against 5% from your own operation, businesses have to start pushing harder.

One surprising barrier to improving sustainability communications was cited as the high turnover rate in marketing/communications personnel. Surely if all new employees receive responsible marketing training, even with a high turnover rate (which is a question in itself) there has to be a robust level of understanding and no real excuses; maybe the training needs overhauling if it isn’t working? I would suspect it has more to do with those at the top of the communications hierarchy than those toward the bottom.

Away from communication, a key element of the organisation’s operation is how it uses resources. They have thousands of ingredients across their product range but buy most of these in relatively small quantities, product volume. It did feel at one point that this was used as bit of a cop-out. In one example of the procurement of palm oil Francis said it was difficult to get suppliers to provide the qualities they needed in the relatively small quantities – I get the point but take this problem and innovate – support / create a smaller company (a social enterprise perhaps?) to provide a niche service to a guaranteed purchaser?

Brendan May (@bmay) asked the question about palm oil being so low on L’Oreal’s relevance axis. Francis was happy they had done pretty much all they could and ticked all the boxes expected of a corporation taking a leadership approach to the agenda. Brendan suggested that even though they had ticked the box today, that was only at the latest state of development of the certification standard (Roundtable on Sustainable Palm Oil – RSPO), which like many standards and labels is still immature and will continue to evolve over time, and therefore probably a more liquid risk and not as consistently low as they appear to be presenting (see diagram above).

If there is one element of their sustainability approach you look at, I’d check out Solidarity Sourcing. “Fairtrade is not really sustainable at all” was a bold statement by Francis, but backed up by evidence from 20 years of experience via The Body Shop and Solidarity Sourcing is L’Oreal’s new approach to a truly socially and environmentally sustainable procurement function launching this year (see diagram below & click image for more information).

After the formal proceedings during drinks Brendan suggested Francis started blogging and I for one wholeheartedly believe more people need to hear from both L’Oreal as a company and Francis as an engaging champion for sustainable business.

Overall: Not perfect (but nobody is); good performance across the board; maybe more women on the Board; some exceptional best practice, but yet another corporate needing to communicate much, much better and rise to adequately fill their sustainability leadership potential.

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4 Responses

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  1. Good post, very informative. I can’t help but feel sustainability needs someone like L’Oreal to put their head above the parapet in order to lead the way, yet the ‘greenwash’ label is such a strong deterrent, everyone’s afraid to put themselves in that line of fire.
    Can I just clarify, in your ‘overall’ summary do you mean there could be more women on the board? If so, what value do you think more women would bring to the sustainability argument, apart from the obvious point of equality/representation?

    Like

    Helena

    June 23, 2011 at 2:38 pm

    • Hi Helena

      I can’t agree more about the urgent need for greater boldness, especially in communication, from more sustainability leaders and those just behind. The private sector is already leading governments and consumers as drivers of action towards mitigating climate change and we need to further build on this momentum – but who will step up next? There are commercial risks and opportunities for those considering using sustainability as a competitive advantage, and in too many board rooms the ethos favours a risk management approach to ensure shareholder dividends rather than rocking the boat unless they have to. True leaders do what is right because of strong values, not profit motives.

      There was a discussion about gender diversity at both Board and Executive Committee level, and a little confusion over which figure represented which. Both were very similar at 3 out of a total 13/14 on each being female. 3 out of 14 isn’t a necessarily a bad ratio, especially compared to countless other male dominated boards with only token female representation, but in L’Oreal’s case, and with 90% of their consumers being female, there was an expectancy for stronger female representation at the top of the tree.

      David

      Like

      davidcoethica

      June 23, 2011 at 3:02 pm

  2. I do believe reducing CO2 by 50%, waste by 50% and water use by 50% (across the period 2005 – 2015) is a great step and I hope they indicated that they are on track to meet these goals.

    I am very curious if they mentioned the wide variety of chemicals used in their products and how much they and the waste from their packaging contributes to a lack of sustainability on their part.

    Thanks for sharing your feedback from the meeting in this post!

    Like

    Shauna Trainor

    June 24, 2011 at 2:17 pm

  3. Seems to be mostly about marketing and only the bottom line, surprise, surprise. Their products contain horrid ingredients! If I, a tiny, tiny maker & marketer of natural products can source organic, virgin palm oil from old family farms in Africa, why can’t an enormous company like L’Oreal? Same with every other ingredient. They could be leaders & would have enormous influence. I don’t think they need to be worried about being labelled as “green washing” cuz they’re nowhere near green!

    Like

    Jane Weeks

    June 24, 2011 at 2:32 pm


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