Award Winning Case - Third prize in the Oikos sustainability case writing competition 2007, organized by University of St. Gallen, Oikos foundation for economy and ecology, Switzerland

The Body Shop: Social Responsibility or Sustained Greenwashing?

The Body Shop: Social Responsibility or Sustained Greenwashing?
Case Code: BECG067
Case Length: 25 Pages
Period: 2002-2006
Pub Date: 2006
Teaching Note: Available
Price: Rs.500
Organization: The Body Shop International Plc.
Industry: Beauty Care, Cosmetics
Countries: UK, Europe, USA
Themes: Corporate Social Responsibility
The Body Shop: Social Responsibility or Sustained Greenwashing?
Abstract Case Intro 1 Case Intro 2 Excerpts

A Controversial Makeover

On March 17, 2006, The Body Shop International Plc. (Body Shop), a retailer of natural-based and ethically-sourced beauty products, announced that it had agreed to be acquired by the beauty care giant L'Oréal SA5 (L'Oréal) in a cash deal worth £652 million (US$ 1.14 billion). The deal valued the shares of Body Shop at a premium of 34.2 percent to their price before the acquisition. It was also a major windfall for its founder Dame Anita Roddick (Roddick).

Following this announcement, Body Shop and Roddick came under severe criticism. Body Shop was regarded by many as one of the pioneers of modern corporate social responsibility (CSR).

The company was also strongly associated with the social activism of Roddick.

Since its inception, the company 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.

Body Shop was one of the first companies to publish a 'Values Report' in 1996. Through these initiatives, the company had cultivated a loyal customer base who shared these values of the company.

On the other hand, L'Oreal was viewed by activists as the face of modern consumerism - a company that tested its cosmetics on animals, exploited the sexuality of women, and sold their products by making women feel insecure. Moreover, Nestlé owned 26 percent of L'Oreal. Nestle 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.

Body Shop's critics said that they felt betrayed by the deal as Roddick had previously been quite vocal in her criticism of companies like L'Oreal. They called for a boycott of Body Shop's products as they felt that the company had sold out its values and principles. Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies Body Shop and Roddick defended the deal by saying that L'Oreal would not compromise Body Shop's ethics and that the merger would give Body Shop a chance to spread its values to L'Oreal. L'Oreal also announced that Body Shop's values would not be compromised and that it would continue to operate as an independent unit....

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