On February 2, 2016, The Body Shop International Plc.

(Body Shop), a UK-based retailer of natural-based and ethically-sourced beauty products, unveiled a new global CSR strategy to reassert its leadership in ethical business. The commitment, entitled ‘Enrich Not Exploit’, outlined 14 new sustainability targets to be achieved by 2020 that touched all areas of the business. According to Jeremy Schwartz

(Schwartz), Chairman and CEO of Body Shop, “The Body Shop can be both a force for good and a successful, profitable business. 40 years ago [founder] Anita Roddick set out a challenge for The Body Shop to tackle the big issues of her time. We’re now tackling the big issues of today, We want our Enrich Not Exploit™ commitment to inspire a new generation of customers, supporters and especially millennials who truly care about how a company operates. Re-establishing The Body Shop as a leader will come from delivering our ambitious aim to be the world’s most ethical and truly sustainable global business.”2 Founded in 1976 by Dame Anita Roddick (Roddick), Body Shop was regarded as a pioneer of modern CSR. Since its inception, the beauty retailer, which was strongly associated with the social activism of Roddick, had endorsed and championed various social issues that complemented its core values–opposition to animal testing, developing community trade, building self-esteem, campaigning for human rights, and protection of the planet. Through these initiatives, Body Shop had cultivated a loyal customer base. But following its acquisition by beauty care giant L’Oréal SA (L’Oréal) in March 2006, both Body Shop and Roddick came under severe criticism.

Loyal customers felt betrayed as Roddick had previously been quite vocal in her criticism of companies like L’Oreal that tested their cosmetics on animals, exploited the sexuality of women, and sold their products by making women feel insecure.

After its acquisition, the fortunes of Body Shop took a sharp downturn. With a host of new competitors jumping on the natural products bandwagon and offering their own green cosmetic lines, its sales plummeted. The beauty retailer’s operating margin narrowed, reaching a seven-year low in 2015.

Body Shop’s ethical message also faded and by the company’s own admission it had been comparatively quieter on the sustainability front over a period of time.

To re-establish itself as the world’s most ethical and truly sustainable global business, Body Shop announced a new CSR commitment with the focus on people, products, and the planet. According to Christopher Davis (Davis), International Director of Corporate Responsibility and Campaigns at Body Shop, the new sustainability commitment would broaden Body Shop’s appeal to the next generation of customers and revive its image as a pioneering force in ethical retail. However, some analysts felt the new CSR goals were not exceptional. “With leading companies such as Marks & Spencer, Unilever, Smurfit Kappa and Skanska all placing sustainability at the heart of their business strategies, all formally disclosing their objectives and targets, and all committed to driving best practice right through their entire supply chains, the 14 goals of The Body Shop don’t seem particularly extraordinary,”3 remarked Senior Corporate Sustainability Adviser, Darina Eades. So going forward what could Schwartz and Davis do to distinguish Body Shop from its rivals who were more actively involved in CSR than before?

Would the new CSR approach help the beauty retailer in regaining its past glory as a leader of ethical business practices in retail and boost sales?

The Body Shop (1976–2006)
In March 1976, Anita Roddick and her husband Gordon set up their first Body Shop store at Brighton, UK. The store sold around 15 lines of homemade cosmetics made with natural ingredients such as jojoba oil, rhassoul mud, etc. From its very early days, Body Shop was associated with the social activism of Roddick, who was critical of what she called the environmental insensitivity of industry and wanted a change in standard corporate practices. By the late 1970s, the company had a number of franchisee stores throughout the UK.............

Question

1. How did Body Shop emerge as a champion of CSR while challenging industry norms? How important a contribution did Roddick make to the creation of Body Shop?
2. How did the acquisition by L’Oréal affect the ethical image of Body Shop? Discuss the problems Body Shop faced following the takeover.

3. Critically analyze Body Shop’s new CSR approach.
4. Do you think the revamped strategy will help Body Shop regain its lost glory as a leader in ethical business? What possible challenges could Schwartz and Davis face going forward and how can they be tackled?