When thinking about climate change, we often feel the problem is just too large or complicated for us to do anything about it. With so many facts and figures thrown out and often used as part of a political agenda, it\u2019s easy to feel overwhelmed and simply disengage from the conversation. L\u2019oreal is proving that doesn\u2019t have to be the case. We can impact climate change one corporation at a time, as long as we are willing to do our part and think creatively about the issues.<\/p>\n
Company Pledge<\/u><\/strong><\/p>\n L\u2019oreal Group, an international beauty company with a portfolio of 32 brands, 2015 sales of over \u20ac<\/em><\/strong>25B and profit of over \u20ac<\/em><\/strong>4.4B [1], employs over 80,000 people worldwide [2]. Through its \u201cShared Beauty for All\u201d pledge, the company has made a sustainability commitment to reduce its environmental impact by 60% by 2020 (from a 2005 baseline) [1]. This means reducing emissions at their factories and distribution centers, reducing water consumption and waste, and sourcing 100% renewable raw materials from sustainable sources. Also impressive is their commitment to \u201czero deforestation\u201d by 2020. They intend to generate carbon gains corresponding to the amount of their greenhouse gas emissions [3]. This is quite an impactful pledge and one that sets the example for the $460B and growing global cosmetics industry [4].<\/p>\n \u00a0<\/strong>How will they get there?<\/u><\/strong><\/p>\n While L\u2019oreal has laid out a four-pronged approach, I will focus on just two of them.<\/p>\n How is this \u201csmart for business\u201d and what does this mean for L\u2019oreal?<\/u><\/strong><\/p>\n This is a commitment that ultimately impacts both L\u2019oreal\u2019s operating model and bottom line. It impacts how they think about sourcing and transporting raw materials, and about waste and water usage for each product line at every step of production. They are putting their money where their mouth is by funding programs and advancements towards this mission to the tune of $35M [9].<\/p>\n Is there anything in it for them? YES!<\/strong> 45% of consumers are willing to pay more for a product from a company known for being environmentally friendly [10], so L\u2019oreal does stand to gain. Millennials and Generation Z care about corporate responsibility \u2013 they take notice of companies doing their part for the environment.<\/p>\n What\u2019s more? It is predicted that companies that address climate change are more likely to thrive as a decrease in availability of natural resources like water will shape future profit and loss and drive new markets [11].<\/p>\n Are they doing enough?<\/u><\/strong><\/p>\n While L\u2019oreal has garnered quite a bit of press and customer attention for their efforts, should they be doing more? Should they get rid of their packaging altogether considering people simply throw the box away when they get home? Perhaps they shouldn\u2019t include the product claim insert and instead have people scan barcodes with their mobile device to show product benefits and ingredient listings digitally. And maybe they should reduce all print advertising if they really care about zero deforestation. Or is it all too little too late \u2013 should they be getting to their pledge sooner? What do you think?<\/p>\n \u00a0<\/u><\/p>\n (758 words)<\/p>\n <\/p>\n Sources:<\/p>\n [1] L\u2019oreal Group, 2015 Annual Report, p.197 [http:\/\/quicktake.morningstar.com\/stocknet\/secdocuments.aspx?symbol=lrlcy<\/a>], accessed November 2016.<\/p>\n [2] L\u2019oreal USA Press Release \u201cL\u2019oreal, Leading Company in Fight Against Climate Change\u201d [http:\/\/www.loreal.com\/media\/press-releases\/2016\/oct\/loreal-leading-company-in-the-fight-against-climate-change<\/a>], 10.25.16, accessed November 2016.<\/p>\n [3] Carbon Disclosure Project \u201cCase Study: L\u2019oreal,\u201d [https:\/\/www.cdp.net\/en\/articles\/climate\/case-study-loreal<\/a>]<\/u>, accessed November 2016.<\/p>\n [4] Business Wire, “Research and Markets: Global Cosmetics Market 2015-2020: Market was $460 Billion in 2014 and is Estimated to Reach $675 Billion by 2020,” [http:\/\/www.businesswire.com\/news\/home\/20150727005524\/en\/Research-Markets-Global-Cosmetics-Market-2015-2020-Market], 7\/27\/15, accessed November 2016.<\/p>\n [6] V. Kasturi Rangan, Michael W. Toffel, et al., \u201cSustainability at IKEA Group,\u201d HBS No. 9-515-033 (Boston: 性视界 Business School Publishing, 2015), p. 6<\/p>\n [7] L\u2019oreal Website [http:\/\/www.sharingbeautywithall.com\/en\/innovating<\/a>], accessed November 2016<\/p>\n [8] L\u2019oreal USA Press Release \u201cEPA Recognizes L\u2019oreal USA Among Nation\u2019s Leading Green Power Users\u201d [http:\/\/www.lorealusa.com\/media\/press-releases\/2016\/aug\/pressrelease<\/a>], 8.18.16, accessed November 2016.<\/p>\n [9] \u201cL’oreal USA reduces CO2 emissions by 57%\u201d (2015).\u00a0Global Warming Focus<\/em>, 357. Retrieved from [http:\/\/search.proquest.com.ezp-prod1.hul.harvard.edu\/docview\/1678791019?accountid=11311<\/a>], accessed November 2016.<\/p>\n [10] Rebecca M. Henderson, Sophus A. Reinert, et al., \u201cClimate Change in 2016: Implications for Business,\u201d HBS No. N2-317-032 (Boston: 性视界 Business School Publishing, 2016), p. 10<\/p>\n\n
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[5] L\u2019oreal USA Press Release \u201cL\u2019oreal Announced New Carbon Balanced Ambition for 2020\u201d [http:\/\/www.loreal.com\/media\/press-releases\/2015\/sep\/loreal-new-carbon-balanced-ambition<\/a>], 3.9.16, accessed November 2016.<\/h5>\n