Essay: Lush Corporate Social Responsibility

Lush Ltd is a private limited company founded in 1995 by a beauty therapist and a trichologist. In terms of the market, lush is associated with retail industry in a cosmetic sector as a dependable and organic cosmetic brand, defined by its customers as verdant, green and fresh.

• What are the key industry issues that need to be addressed by a CSR program?

Public’s communication regarding cosmetic firm often comes with doubts questioning about its record of ethical trading and social responsibility being adequate enough.

Companies operating in cosmetic sector consider their corporate social responsibility strategy as an asset in differentiating themselves from their competitors and in appealing to their target market.

Sustainable cosmetic summit is being held every year to overcome any potential issues that cosmetic industry can draw themselves into by presenting new and more innovative approaches. Major issue featured by the summit is switching to renewable sources instead of using non-renewable, defined as Green Formulations.

The key issues we need to have look into when assessing cosmetic industry are:

1. Disruption of Ecosystems – with large companies’ production comes consequences in large source of natural ingredients which leads in disruption of ecosystems and depletes non-renewable natural sources. Using non-natural ingredients such as chemical components are released into our ecosystem in various forms.
2. Sustainable Packaging – packaging element of the cosmetics we buy needs to be addressed in cosmetic industry as the concerns about plastic pollution rise day by day.
3. Transparency and traceability – specifically referring to supply chain, which has become global and came with difficulties in tracing the ingredient origins.
4. Working Conditions and Human Rights- These refers to the working environment and each aspect of employees’ terms and conditions of their employment and the working environment being behaved in an ethical way.
5. Consumer safety – Company operating in a cosmetic sector has to make sure that consumer safety is their number one priority to prevent any potential health injuries by offering only harmless products.
6. Social Impact – many companies are focusing on environmental impacts but are leaving behind the importance of social impact. It is vital in cosmetic industry to create a social value in communities and for their stakeholders.

2. What does the company’s Web Site say about its commitment to social responsibility and ethical behaviour? What specific activities is it involved in?

K. Paetzold (2010) addresses the CSR as a self-regulating act which incorporates two elements. These are the sufficient focus by the enterprise on its contribution to the welfare of society and the environment in the long term and the relationship with its stakeholders and society at large.

According to a number of researchers, the Internet is the prime communication channel in this century and stakeholders are increasingly relying on the Internet as a source for information (Dellarocas, 2006; Isenmann, 2006). Lush presents its commitment towards the social responsibility in order to maximize the positive impact on its stakeholders.

Lush acts as a socially responsible company and it shares its policies, activities and initiatives by storytelling on their website that operates as a blog in certain way.

Company’s CSR activities towards environmental issues:

• Packaging – manufacturing products that most of require no packaging; above 70% products sold in stores are naked – meaning no packaging; 1/2 of products can be taken home with absolutely no packaging required; encouraging customers to bring their own bags or tins; recycled pots and bottles that can be returned to the shop ( bring 5 get 1 product for free) as Lush reuse them into new packaging – beyond recyclable; using paper bags, paper trays, ‘furoshiki’- knot wrap/fabric. Lush is recycling 85% of their waste and trying to reduce their amount of waste by using reusable transit packaging.
• Energy – as a part of their ecological footprint they are using LED lights in their store and factories, which use 10% less energy than the lights used in normal stores. Lush has implemented BIO mass boilers in their factories.
• Transport – as a global business, transport has a big impact and therefore Lush has decided to help climate change and reduce Air Freight by banding domestic flights in the UK for transportation and introducing Carbon Tax. Lush pays 50 pounds for a pot, because they think that the government is not taxing the aviation as it should. Lush keep taxing themselves and then they take the money and fund transport and climate change groups.
• Disruption of Ecosystems – Lush uses only organic, vegetarian and vegan ingredients that are renewable. No chemicals are being used and all the ingredients are processed in sustainable way. (Handmade policy)

Company’s CSR activities towards ethical issues:

• Ethical Buying Policy – Before buying any ingredients Lush focuses on ingredient origins, workers’ rights, working conditions – health & safety, working hours; workers’ freedom, no child labour and no testing on animals. Lush has for many years had a policy of aiming to purchase their materials directly from producers: e.g. the farmers, growers and processors, in order to learn the true story of each ingredient.
• Lush has started Animal Testing Fight before they even opened they first store. It has been their number one priority to boycott against animal testing and it’s their vision to take animal testing out from cosmetic industry. Instead Lush has started Human Testing. In 2012 Lush performed campaign in one of the London’s stores, where an actress has been sitting nearly naked in glass window while a man performed brutal experiment on her for 10hours to support Animal Rights Movement.
• Is it legal? Is it ethical? Every person participating on Human Testing is a volunteer. The feedback form Lush’ customers has been a huge success.
• ‘Myself & my daughter find it difficult to buy beauty products as we both suffer from sensitive skin I’ve tried lush products numerous times as there naturally made some are fine & we’ve bought more but some still irate don’t know why I’d love to be a tester for you & review your products for others in a similar situation thank you’ Comment taken from Lush Website as an example of Why would someone consider volunteering in Human Testing?

Company’s CSR activities towards social issues:

• Charity Support – ”During our last financial year in the UK, we donated over £1.6 million to small charities, campaigns and organisations working in the areas of environment, animal protection and human rights. Globally, we donated £6.3 million.’’ (Lush, 2015)
• Charity Pot and Body Lotion has been created in order to raise money and support people’s welfare.
• Lush Prize – the biggest prize in the non-animal testing sector rewarding £ 250,000.
• Slush Fund – to support small farmers and producers. More than £ 900,000 has been raised.

Company’s CSR activities towards economic issues:

Company Tax Policy – Lush pays a fair tax in every country they operate as they want their customers to have a safe living environment, access to good education and efficient healthcare services. Lush publicly speak out to government about how those taxes should be used.

3. Does the company have a stated set of values or an ethical code of conduct?

”A code of ethics and professional conduct outlines the ethical principles that govern decisions and behaviour at a company or organisation. ‘’

Lush highlights that ‘’No company should be trading from an unethical position and society has a right to expect as the norm fairness and resource stewardship from the companies that supply them.’’

Lush’ vision lies in enriching lives of every stakeholder that have a certain contact with them as a business and attempt everyone to benefit from Lush’ desired goals and set of values.

Lush stands for all the businesses that are being ethical and only trade fairly.

Ethical Strategy towards their customers:

Lush provides customers will all the products’ information needed. They believe that it is vital for the customer to have the information of what does the product contain, when and where has it been made and how fresh it is.

(Note: Nearly every Lush product has a face emoji on the back of the packaging to inform the customer who made the product, proves that is has been handmade and uses label: ‘best before’.)

Business ethics begins where law ends. Lush treats their customer ethically and legally.

Lush addresses that the customer is always right and that their goal as a company is to ensure that the customer gets what he was promised = Customer Rights Act 2015.

Lush follows Consumer Protection Act 2008 – legislation that makes it a criminal offence for businesses to engage in unfair business practices; untrue statements, aggressive sales techniques (harassment or misleading consumers), labelling, advertisements, digital media or product packaging. Businesses have to make sure that all activities performed are legal, decent, truthful, honest and socially responsible.

Ethical Strategy towards their stakeholders:

“We want to maintain the ethos and ethics of Lush and we want to recognise that the company is all about the people who are in it.” – Company director Karl Bygrave.

Staff are paid above minimum wage provided to all ages, genders and races. New commitment from the company towards Lush staff has been developed in order to put better initiatives including implementation of a living wage, improved parental pay, development of lush employee benefit scheme, improving maternity pay and securing a future in Lush for passionate and respectful people.

Lush believes in equality, dignity, freedom, fairness and mutual respect as the foundation of democratic society.

4. Who are the key stakeholders that the company works with in their CSR program? Why are they important?

A stakeholder has a certain interest in the success or failure of the business, it’s decisions, activities and operations. The term key stakeholder defines someone who is on the top of the list that is influenced the most by company’s decisions and its position in the market. In terms of Lush, it is vital to focus on the stakeholders that engage in their mission, set of values and the ones that benefit from the company’s initiatives, as it is known that Lush operates not just a as business selling products but also educates the public, sets the expectations of the right ethical behaviour for other businesses and contributes to the community’s welfare.

• Founders & Shareholders & department heads that make the major business’ decisions and lead the company towards its vision; share interest in profitable and well-performing company
• Suppliers provide Lush with organic, vegetarian and vegan ingredients that are produced in a sustainable way.
• Employees that are not only being treated in a way to meet human rights, which guarantees the business satisfied and fully determined employees but also they are being educated by attending seminars and different company’s meeting in order to spread the awareness of environmental issues, the lush’ vision, set of values and are encouraging their potential customers to by naked products, recycle, fight against animal testing and spread the message.
• Government as a system in organised community that regulates the operations of business which might not always cooperate with companies desired activities.
• Customers are the vital segment of the key stakeholder list are they the one profiting the company. When a customer purchases a product it also engages in company’s mission, spread the message and contributes towards company’s goals.
• Communities that businesses’ customers are part of, share certain common values, goals and create an identity in humanity at large.
• Charities play important role in Lush’ stakeholders list as the company’s philanthropic aim is to contribute to community and improve the quality of life.

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