The Body Shop: Social Responsibility or Sustained Greenwashing?

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BECG067 For delivery in electronic format: Rs. 500 ;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Corporate Social Responsibility
Case Length : 25 Pages
Period : 2002-2006
Organization : The Body Shop International Plc.
Pub Date : 2006
Teaching Note : Available
Countries : UK, Europe, USA
Industry : Beauty care / Cosmetics

Abstract:

This case is about the issue of sustainability rhetoric and greenwashing. In March 2006, The Body Shop International Plc. (Body Shop), a retailer of natural-based and ethically-sourced beauty products, announced that it had agreed to an acquisition by the beauty care giant L'Oréal SA1 (L'Oréal) in a cash deal worth £652 million (US$ 1.14 billion).

The announcement brought in its wake a spate of criticism against Body Shop and its founder, Dame Anita Roddick (Roddick). Body Shop was regarded as a pioneer in modern corporate social responsibility (CSR) practices. The company was also strongly associated with Roddick's social activism.

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Since its inception, it had endorsed and championed various social issues such as opposition to animal testing, developing community trade, building self-esteem, campaigning for human rights, and protection of the planet. Through these initiatives, the company had cultivated a loyal base of customers who shared these values.

L'Oréal, on the other hand, had been severely criticized by activists for allegedly testing its cosmetics on animals, exploiting the sexuality of women, and selling its products by making women feel insecure. Moreover, Nestlé owned 26 percent of L'Oréal and Nestlé was one of the most boycotted companies in the world for its alleged unethical business practices and aggressive promotion of baby milk in developing countries.

Some of Body Shop's critics and customers said that they felt betrayed by the deal as Roddick had previously been vocal in her criticism of companies like L'Oréal. They called for a boycott of Body Shop's products. However, Body Shop and Roddick defended the deal by saying that the acquisition by L'Oréal would not compromise Body Shop's ethics; the merger would, in fact, give Body Shop a chance to spread its values to L'Oréal. L'Oréal also announced that Body Shop's values would not be compromised and that it would continue to operate as an independent unit.

This case discusses the reactions of consumers, activists, and CSR experts to the acquisition of Body Shop by L'Oréal. The acquisition throws up some questions such as: Is Body Shop guilty of greenwashing? Does it have the influence to extend its values to L'Oréal? The case also looks into the issue of whether L'Oréal was trying to improve its own image and to buy CSR through this deal.

Issues:

» Understand the issue of sustainability rhetoric and greenwashing with regard to the acquisition of Body Shop by L'Oréal

» Understand the challenges faced by a company in building a corporate image and brand on the social marketing concept

» Appreciate the importance of the cultural and CSR factors in mergers and acquisitions vis-à-vis financial and strategic parameters

Contents:

  Page No.
A Controversial Makeover 1
Background Note 2
The Pioneer in Modern CSR 6
Body Shop's CSR Initiatives 6
Criticisms 11
Body Shop's Response 14
L'oréal Buying CSR? 15
Outlook 15
Exhibits 18

Keywords:

The Body Shop International Plc., natural-based and ethically-sourced beauty products, L'Oréal SA, Dame Anita Roddick, Corporate Social Responsibility, Greenwashing, Consumerism, Mergers and Acquisitions, Consumer advocacy activism, environmental management , Beauty Care, animal protection and testing, Community Trade product, Product boycott, Business Ethics

A Controversial Makeover - Next Page>>


1] L'Oréal SA, headquartered in Clichy, France, is the world's leading cosmetics and beauty company. Its portfolio includes various brands in the field of cosmetics, concentrating on hair color, skin care, sun protection, make-up, perfumes, and hair care. In 2005, L'Oréal's revenue was €14.53 billion and it earned a net income of €1.639 billion. As of December 2005, it employed 52,080 people.

 

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