Is cosmetics' corporate social responsibility altruistic or just good business? Julian Ryall and Phillipa Jones in Paris, James Burns in Toronto and Raghavendra Verma in New Delhi examine CSR approaches around the world
“It is better to be beautiful than to be good,” wrote Oscar Wilde in The Picture of Dorian Gray. Many cosmetics and personal care companies worldwide may still believe this statement to be true, but being, or at least claiming to be ‘good’ has become an essential part of the sector’s public image.
Europe has been especially taken with commercial do-goodery, or corporate social responsibility (CSR). In recent years showing a caring face has become increasingly important for the success of most, if not all, European industries. Beauty companies are no exception and their board members now happily discuss sustainable development, greenhouse gas emission reductions and fair trade products on the same par as profit and loss.
“All the major cosmetics, toiletry and perfumery companies have well developed CSR programmes and take the issue very seriously,” says Paul Crawford, head of regulatory and environmental services for the UK Cosmetic, Toiletry & Perfumery Association (CTPA). Pierre Simoncelli, director of sustainable development for the French beauty behemoth L’Oréal agrees. “L’Oréal is the world’s leading beauty company and as such it needs to be an authentic example of sustainable development,” he says. “We believe that lasting business success is built on high ethical standards and on a genuine sense of responsibility to the community at large.”
Simoncelli believes that CSR initiatives are becoming ever more important to beauty product consumers. “Corporate responsibility now attracts more media attention than ever, which has created a growing need to share progress with consumers,” he tells SPC. He cites in particular the creation of the L’Oréal Corporate Foundation, which with a budget of t40m over five years will oversee the company’s philanthropic initiatives in education, science and solidarity. The company is also trying to ensure it applies better sustainability criteria when sourcing its raw materials, to use more fair trade products and to find alternative methods to animal testing.
Simoncelli says that while L’Oréal practices sustainable development in all countries in which it works, the weight given to different topics may change. “In the UK, for example, the two current key issues in the public domain are finding alternative methods to animal testing and reducing packaging.” But he admits that while “the big picture of what we’ve achieved [in CSR policies] in the past five years is great... we still have some way to go and are working on our long-term strategy and targets”.
L’Oréal recently received a major shot in the arm in CSR terms when acquiring the trailblazer of such policies in the beauty industry, The Body Shop. Despite being absorbed into the L’Oréal fold, The Body Shop spokeswoman Roisin Long says it remains and would remain true to its founder’s, the late Anita Roddick’s idea that businesses have the power to do good. “This philosophy continues to drive everything we do as an ethical cosmetics company,” says Long. She highlights the fact that over 50% of The Body Shop’s products contain community trade ingredients or are produced through the community trade programme, which creates sustainable trading relationships with disadvantaged communities around the world. The Body Shop has also focused in recent years on raising awareness and funding for women affected by domestic violence.
PITFALLS IN PRACTICE
So is CSR a good thing? Certainly it is always hard to argue against good behaviour, but as with anything associated with public relations, there is a degree of murkiness associated with the practice. What would a company be doing normally that is found expedient to label CSR? And what actually is corporate social responsibility anyway? And who decides?
This is particularly important in a marketing heavy sector such as the personal care industry. Take North America where there is debate amongst cosmetics and fragrance producers about what constitutes corporate social responsibility.
“Everyone defines CSR differently,” says Lisa Powers, vice president for public affairs and communications for the Personal Care Products Council (PCPC). “We represent over 600 companies involved in the manufacturing, distribution and supply of personal care products in the US and each company defines it differently. Some companies are committed to improving the environment, some to making the lives of consumers better. They see the need to be socially responsible, both internally and externally.”
The PCPC itself takes social responsibility seriously, having created the Personal Care Products Council Foundation, which has run the Look Good...Feel Better (LGFB) programme since 1989. This works on the principle that if someone with cancer can be helped to look good, their improved self-esteem will help them approach their treatment with confidence. Available in every US state, LGFB has almost 12,000 volunteers giving over 100,000 hours of service, using around $10m of cosmetics donations annually.
Many of the council’s members claim to take CSR seriously. Johnson & Johnson says it has pursued what would now be called CSR policies for over 100 years.
In 1900, a hurricane devastated the town of Galveston, Texas. Johnson & Johnson donated and shipped medical supplies that were used by relief workers. And as early as 1947, the company developed “Our Credo”, a range of policies to give back to the communities in which the company operates as well as to its employees and shareholders.
Today, those policies include making HIV/AIDS drugs more affordable for African countries, an assistance programme providing medicine to uninsured Americans, a programme to promote good health amongst its employees and a campaign to help alleviate the nursing shortage in the US. From a sustainability standpoint, the company is committed to reducing greenhouse gas emissions and water use at its plants. Across North America, the company has introduced a wide variety of innovations including natural skylights to reduce lighting costs, tree planting, air filters to reduce pollution and increased waste recycling.
“Our Credo is not just words on paper,” says Shaun Mickus, director, corporate communications for Johnson & Johnson. “We live it every day. CSR is rooted in our history; it’s part of our DNA. In the communities where we are we try and make a positive impact.” Mickus claims the company was acting out of principle in being committed to CSR. “We take it very seriously and we take it to heart,” he says. “As a health care company, it’s the right thing to do.”
CSR AS STRATEGY
Procter & Gamble is another large company that says it takes its social responsibilities seriously. Its “Live, Learn and Thrive” programme has improved the lives of over 50 million children worldwide and its Children’s Safe Drinking Water programme has yielded millions of litres of clean drinking water. The company is also committed to reducing emissions, energy and water consumption.
“Sustainability is a business strategy at P&G,” says P&G ceo AG Lafley. “It is integrated into day-to-day business decisions and is an important part of how P&G is designed to grow – now and for generations to come.”
Of course a cynic might say that such programmes are great for brand building and that sustainability is just another way of describing the cost efficient use of resources, but maybe that is just the point – companies work best when taking care of their customers.
Take Japan. Companies across all business sectors have been enthusiastic participants in CSR programmes, with cosmetics firms amongst the most active and innovative. Indeed the two largest names in Japan’s beauty sector – Shiseido and Kanebo – can justifiably claim to have been giving back to society here since their formation more than 100 years ago.
“The name of the company, Shiseido, has a connotation of creating new value and being of service to society,” says Shigesato Kobayashi of the company’s public relations division. “From the time we were founded in 1872 to the present we have maintained that concept.” The company’s five principles – product quality, mutual cooperation and prosperity, customer orientation, integrity and respect for virtue and duty – date from 1921 and a CSR department was formally established in 2004.
Specific schemes range from make-up advice activities for people who are concerned about birthmarks or white patches on their skin, using the exclusive Perfect Cover range, to a Social Beauty Care Centre in the up-market Ginza district of Tokyo, beauty seminars for elderly and disabled consumers and tree planting schemes in China. An estimated 1,700 events in Japan have helped some 30,000 people in the last 60 years, according to Kobayashi, and similar events are now under way in Italy, Germany, Singapore and New Zealand.
Kanebo Cosmetics has similarly invested in its relationships with customers, hosting medical beauty therapy sessions since 1966 designed to encourage rehabilitation after skin surgery. “Research and treatment along these lines has been carried out at more than 30 university hospitals and medical facilities across Japan, with Kanebo often offering a free service to patients in collaboration with dermatologists,” says Dinah Imanari, a spokeswoman for the company.
Kanebo also spent ¥10.7bn ($97.4m) on environmental commitments in 2007 and is ranked among the top three corporations in Japan for its CSR activities.
“Kanebo Cosmetics, as a beauty expert, is ideally positioned to bring joy and enrich the lives of people,” says Imanari. “Not only to our customers, but also to less privileged members of society for whom skin care treatment or professional make-up advice can be a significant step towards mental and physical rehabilitation, helping them to regain a positive outlook on life and return to full participation in society.”
Yet while analysts agree that Japanese companies are moving in the right direction with their CSR schemes, and arguably lead the world in the area of environmental management, they still lag behind firms in Europe and the US in terms of labour and human rights issues.
“About eight years ago, all the talk was of CSR projects, but that seems to have trailed off recently,” says Mariko Kawaguchi, senior analyst in the management strategy research department of the Daiwa Institute of Research. “Larger companies have incorporated key elements as core elements of their business strategies, but the gap is widening between them and smaller firms.” She is also more than a little sceptical of cosmetics companies’ trumpeting their own achievements in the field of sex equality in the workplace, primarily because these companies should have a greater number of female employees because they are producing items almost exclusively for a female clientele.
DEVELOPING POLICIES
It is interesting to compare these assumptions with those in a developing country market, namely India, where CSR is sometimes regarded almost as an indulgence rather than decent behaviour.
“CSR awareness is very low among Indian companies and is usually associated with the need to spend money,” says Reena Ramachandran, director of JK Business School in Gurgaon: “It is projected as a luxury in which only the large companies with resources at their command can indulge.”
That said, most cosmetic companies in India claim to be doing something related to CSR. Take Shahnaz Husain, the country’s best known beautician and a herbal cosmetic industry entrepreneur as ceo of Shahnaz Herbals.
In 1979 Husain started to train ordinary housewives to set up herbal beauty salons in their own homes, and under a franchise agreement gave them the right to use her name and products. This helped many women to have a career and still be close to home and family. “I have seen how shy, submissive women blossomed into confident entrepreneurs,” she tells SPC.
The other aspect of Husain’s business model is its emphasis on herbal products, which she considers to be a part of her CSR policies. According to her, she has even refused to offer treatments such as skin bleaching creams or hair perms to highlight the dangers of chemical substances. “I wanted to open the windows of the world to the rich Indian herbal heritage and treatments based on the Ayurvedic system,” she says. “I have reinforced my philosophy that nature is the best cosmetologist.”
Of course, some might say that a herbal cosmetics business is based on customers adopting such philosophies, but there’s no denying that these products are probably healthier than skin bleaches.
Husain’s philosophy has however not influenced many young Indian girls with darker skin complexions who have created a $300m market for skin whitening products. Hindustan Unilever (HUL), whose Fair & Lovely brand dominates the segment, started a whole foundation in the name of this product with various women-centric development programmes. Earning CSR points seems to be a clear objective as the marketing of this product and this tactic raises angry passions in various quarters, notably women’s rights activists opposed to women whitening their skin.
To offset such negative publicity and gain marketing benefits Indian companies also associate themselves with various kinds of charity work. A good example is Dabur India, which has supported charities in adult literacy, diagnostic and health care facilities, health camps, cutting and tailoring training, bee keeping training, animal husbandry and self-help groups for farm development. Ramachandran, however, considers these activities more related to the brand value than CSR.
Another important aspect of Indian companies’ CSR work is a proclaimed concern for environment conservation, with labels listing materials used in production processes. This has not convinced activists either. Meneka Gandhi, animal rights activist and politician from the Gandhi family (although not a Congress party supporter) tells SPC that personal care product ingredient lists can be cunningly written in small type and worded confusingly. “There is no point [in] killing part of the earth and then giving a few dollars to feed children in Ethiopia or creating AIDS awareness,” she says.
But maybe that’s why CSR policies are actually important – as a way of mitigating some unpleasant effects of commercial practice that look bad to consumers. After all, while saying “it is better to be beautiful than to be good...” Oscar Wilde did add “but it is better to be good than ugly”.