Discuss about the European Corporate Responsibility Reporting.
This memorandum is constructed in order to evaluate the sustainability report of L’Oreal so all the issues related to the organization can be discovered. The sustainability report is a form of an organizational report that provides basic information about the environmental, economic social and performance of the governance. This sort of a report is not generated from any data but is instead a process to improve and adopt the firm’s commitment towards sustainable enhancement in such a way that they can be validated to the stakeholders, both external and internal.
It is important to establish a sustainability report for L’Oreal so that all the policies and the plans that have been established by the organization can be understood and a clear idea can be framed as to whether the polices and the sustainable implementations undertaken by the firm are actually real. It is seen that the sustainability report of the firm comprises of the producing, innovating, developing and living that enhances the current position of the organization. The following is the Balance Score Card that provides the sustainability report of L’Oreal. The balance score card is given below:
The innovative sustainability that is undertaken by the organization involves decreasing the footprints that are related to the environment within the formulas that are used in order to manufacture their products. It is seen that L’Oreal wants to assure their customers that they are undertaking various experiments with respect to their products so that the products they produce are environment friendly but there are no hints of the process used to manufacture the product in front of the market and the consumers. L’Oreal has the aim of respecting the biodiversity of the global environment so that all their products are eco-friendly and they do not have an impact on the diversified ecosystem.
The company has the aim of optimizing their level of packaging by making use of biodegradable items as their packaging items so that they do not harm the environment. The bottles and the boxes they use for packaging are recyclable so that they can be used again again for the packaging the same product. The aim concern for the global environment is the issue of deforestation that is leading to rise in pollution and global warming. L’Oreal has focused on manufacturing their product with the help of items that do not lead to deforestation. They try to make use of the sap that are available from the trees and with the help of innovative scientific process undertake various researches to create healthy cosmetic items that will be beneficial for the consumers. L’Oreal is against deforestation and they have undertaken various promotional activities and CSR activities in order to aware the consumers about the effect of deforestation.
L’Oreal is under the impression that the only way to reduce the negative impact on the environment is by taking positive initiatives by all the organizations who are functioning in the world. L’Oreal tries to manufacture their products with the help of new and improved techniques so that the level of CO2 emission reduces thereby taking care of the environmental issues. There has been an increase in population with the advent of time and it is seen that the level of water consumption has increased (Maon & Lindgreen 2015). Therefore, the company tries to decrease the level of water consumption so that optimal use of the resources can be achieved. The firm tries to reduce their level of waste by making use of various waste reduction techniques that can reduce the level of waste and thereby developing the environment where the organization operates.
L’Oreal has always been trying to generate their living sustainability as it uplifts the image of the firm in front of the consumers. The firm tries to evaluate the footprints that are undertaken by the product thereby finding out what steps can be taken in order to improve the initiatives the products undertake in order to make a sustainable environment that will develop the economy and the environment.
L’Oreal is under the impression that sustainability can be accomplished by increasing the consumer awareness with the help of training programs and awareness activities through advertisements that will promote the need for environment to be preserved properly.
L’Oreal are focused on enhancing the sustainability in the environment and within the organizational culture. L’Oreal looks to motivate and promote the admission of the employees in developing sustainability program so that new ideas can be generated that can be implemented so improve the sustainability policies of the organization (Epstein & Buhovac 2014). The firm even tries to include the society within the sustainability program so that their issues can be recovered and new ideas can be introduced in order to rectify the problems and develop a better developmental plan.
The company is under the impression that if they join hands with the suppliers with respect to their commitments then the suppliers can understand what the organization requires and accordingly the suppliers can bring about changes in their manufacturing style that will even improve sustainability of the organization.
The firm tries to globalize their social model by spreading its wings in various corners of the world and thereby distributing their idea about an eco-friendly environment can be accomplished.
The process of environmental accounting has an influential impact on the company report. It is because of the fact that this method is influential for examining their effect on environmental performance and the value of the organization (Gatti & Seele 2014). This process is even ideal for the reducing the cost of the organization that can lead to better performance of the firm. Environmental accounting can even lead to rise in profit and will thereby lead to increase in market share.
L’Oreal has the aim of increasing the promotional activity with respect to awareness among the consumers with respect to decrease in the level of pollution from the environment and optimal use of the scarce resources. The organization tries to manufacture products that are eco-friendly and has ingredients that are obtained from the nature so that these products become useful for the consumers.
The earlier section describes about the operations and the objectives that are performed by L’Oreal with respect to their sustainable and environmental policies. There are various issues that are related organizational policies of L’Oreal that creates a wrong impression to the consumers. The most important issue that has been identified with respect to L’Oreal is their promotional policies of their subsidiary ‘The Body Shop”. The products that are sold by Body Shop smells nice and they are felt nice when they are applied on skin. The firm claims that all their products are made from natural ingredients by undertaking various publicities through their icons, websites and their promotional activities like protection of the world through community trading support, protection of the planet, self-esteem activation and initiatives against animal testing (Lam & Quinn 2014). The firm promotes their product as 100% biodegradable and they maintain the eco-conscious standards. Body Shop has stated that their products are even non-toxic and does not have an impact on aquatic species. They are even able to minimize the level of packaging waste and thereby creating an image in front of the world that their products are safeguarding the environment.
However, there rose a controversy right after Body Shop was acquired by L’Oreal. The media disclosed that L’Oreal were undertaking tests on animals to find out the effectiveness of the product and to discover whether they have any side-effects. The products were sold to the public after the animal tests were successful. This issue was against the value that was highlighted by Body Shop. The firm tried to undermine these allegations by awaking the consumers regarding wrong information but these approaches were not sufficient to change the mindset of the consumers.
The issue that generated after this incident was that even though the firm highlighted “green’ products on their website, consumers wanted to know the level to which the products were actually green. This showed that the company undertook the policy of green washing by which the company promoted their products to be eco-friendly. The labels on the product claiming to have an Eco-conscious standard were able to create an impression that the products were made of natural products but without the labels, this promotion sounded meaningless as there were no elaboration about the products that were used. The symbol on the product showed that eco-conscious standards are met but the actual truth is that the product is not even meeting the international standards. Therefore, the process of green washing is a significant issue that requires to be amended by L’Oreal in order to preserve their customer base in the market.
Another issue that is seen with respect to L’Oreal is their faulty advertisement. The organization undertakes advertisements that looks to highlight their products having natural ingredients and are very effective of personal healthcare. The company ascertains that they look to provide eco-friendly products but during advertisements, their focus is on how the products provide smooth skins and beautiful hair. The advertisements do not seek attention to the focus on eco-friendly and non-toxic products. Therefore, these are the main issues that are pertinent with L’Oreal and require to be resolved in order to create a better reputation in the market.
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SWOT Analysis |
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Strength |
· Largest Cosmetic and Beauty Company · Has a continuous Research and Development Activity · Good brand and product portfolio · High Quality Products · Integrated market communications · Widespread Distribution · Natural and Organic in nature |
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Weakness |
· Too many subdivisions · Lower profit margin · Degrading hair care treatment |
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Opportunities |
· Market Potential · High demand for organic cosmetics · Expansion of product mix · Revival of the Body Shop |
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Threats |
· Cash Crunch · Dynamic feature of cosmetics industry |
The analysis of the issues that have been explained earlier in the memorandum shows that there requires a drastic change in the organizational policies of L’Oreal because even though the organization shows that they are focusing on manufacturing eco-friendly and natural products the problem that was discovered during the acquisition of The Body Shop has changed the mindset of the consumers. It is important for the firm to transform their advertisement and promotional strategies where the focus will be on protecting the environment and the planet.
It is essential for L’Oreal to undertake a market research and analyze the strategies that are undertaken by their competitor especially Unilever that will help them understand their position in the market. L’Oreal should even look at the strategies implemented by Unilever so that they can undertake necessary changes so that they can stay one step ahead of them and brand their product efficiently better. The organization should even publish their sustainability report in front of their stakeholders and in the official website so that anyone can access them and have an idea that what the firm is really undertaking for the environment. The firm should even venture into markets where they have not accessed yet and thereby increase their revenue. L’Oreal should even make undertake brand extensions with the introduction of new and improved eco-friendly and natural products that will add value and will even generate revenue. The use of extensive and proper advertisements will enhance the sales in the market and increase their market share. The changes in the management policies and additional supervision on the progress of the market and the production process can be influential. The use of all these activities can be useful in enhancing the firm in the economy.
Reference List
Epstein, M. J., & Buhovac, A. R. (2014). A new day for sustainability: is your company ready to take on increased responsibility for its activities throughout the globe?. Strategic Finance, 96(1), 25-34.
Gatti, L., & Seele, P. (2014). Evidence for the prevalence of the sustainability concept in European corporate responsibility reporting. Sustainability science, 9(1), 89-102.
Lam, J., & Quinn, F. (2014). The role of sustainability in enterprise risk management. Workiva White Paper.
Maon, F., & Lindgreen, A. (2015). Reclaiming the child left behind: The case for corporate cultural responsibility. Journal of Business Ethics, 130(4), 755-766.
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