The Body Shop believes that business has a moral responsibility to tell the truth about itself and face up to the things that need to change.

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1 The Road Ahead A Highlights Package THE BODY SHOP AUSTRALIA S SOCIAL & ENVIRONMENTAL REPORT 2011/2012 MEASURING UP The Body Shop Australia is a diverse business with hundreds of people working toward common goals. We want it to be obvious for anyone to see what we do, why we do it and how. Our Social & Environmental report is an ambitious document which defines our future challenges and helps guide our actions to seek improvements in the way we engage and interact with our stakeholders. What follows is a highlights package; of The Body Shop Australia s performance. Why Social and Environmental Values Reporting? The Body Shop believes that business has a moral responsibility to tell the truth about itself and face up to the things that need to change. The Body Shop is a high profile advocate of social and environmental causes. For The Body Shop to continue to mix business with campaigns, it has to take its supporters and stakeholders, including staff, customers and suppliers along with it! Social Report A Social Audit requires measurement of performance against policies, internal management systems, programs, stakeholder expectations and external benchmarks. During 2011 The Body Shop Australia worked with Best Practice Australia on a consultation process with our stakeholders. The results summary is published here. Environmental Report The Environmental section of our report covers our sustainability plan and performance to date. How do you measure the way people think? Welcome to The Body Shop s 2011/2012 Social & Environmental Values Report. This report comprises 2 sections covering the company s track record on social and environmental performance within our business during this period That is the overriding challenge of Social Auditing, which tries to apply tangible measures such as numbers and statistics to intangible human thoughts and emotions. At The Body Shop Australia, we have been measuring our social performance since We could quantify our social impact in obvious ways: numbers of people employed, statistics on equal opportunities, pay and benefits and donations. But we needed more than that. We needed to understand what our stakeholders thought. Our Audit involved market research type questionnaires and focus groups with our key stakeholders: staff, customers, suppliers, Values Partners and The Body Shop At Home Consultants. In all more than 9000 people were consulted.

2 Our SOCIAL statement What follows are some of the highlights and hotspots, together with an indication of what the company is doing to address some of the issues. The results will continue to be discussed in focus groups so that future action plans can be prioritised with the ongoing aim of making The Body Shop more efficient, more accountable and still more effective. EMPLOYEES Inspiring and developing our people Ours has always been a business that puts a high value on our People. We are committed to treating our staff in a fair, considerate and supportive way. As you would expect, this means we have forward thinking policies on issues like diversity and equality, because we believe passionately that it s not your background, race, sexuality, gender, or disability that defines who you are, but the talent you have and the commitment you re prepared to give. In the last few years we ve formalised most of our People policies. These cover recruitment and on boarding, learning and development, performance appraisal, reward and engagement and career development. There are detailed tools and processes supporting all of these and they re underpinned by the basic principles we follow in all our dealings with our teams, which are transparency, dialogue, and mutual commitment. 93% of staff believe there s something special and unique about working for the organisation 89% of staff trust the business to always act ethically in business dealings 86% of staff trust the business to make a difference 83% of people are proud of the achievements of the organisation 80% of staff believe it s a truly great place to work 59% of staff believe workloads are fair & equitable 67% of staff believe there is a strong sense of purpose and direction 63% of staff rate The Body Shop well on the amount of environmental information available 62% of staff are satisfied with opportunities for professional/ personal development s To achieve 80% and more across all indicators related to staff satisfaction with their employment, in particular across workload, development and environmental responsibility.

3 THE BODY SHOP AT HOME CONSULTANTS Inspiring our Consultants Our independent Consultants are the life blood of The Body Shop At Home business. We have a vision for the At Home business that empowers individuals to run their own businesses and to choose their own lifestyle. To achieve this all independent Consultants with The Body Shop At Home are provided with a clear income, a career path and receive training which enables them to achieve success. 94% of Consultants agree The Body Shop provides important Learning and Development programs 90% of Consultants agree The Body Shop At Home is committed to a range of social issues and upholds values 87% of Consultants agree The Body Shop At Home provides them with support 81% of Consultants agree The Body Shop At Home meets their most important expectations 67% of Consultants are satisfied with the systems for representing their views to The Body Shop 66% of Consultants are satisfied that field meetings meet their business needs 41% of Consultants are satisfied with the availability of and access to Learning and Development courses s To achieve 80% and more across all indicators related to Consultant satisfaction with opportunities to build their business, in particular across Learning and Development, communication and income and career plans. CUSTOMERS Supporting campaigns All the research we ve done shows that people believe in our products and trust our intentions. It s no surprise that our customers tend to be concerned about the same issues that we re concerned about and are very conscious of what they buy. Our campaigning activities are so close to the heart of The Body Shop it s about being the voice in our community, a business that is a force for good, driving long-term change. (above The Body Shop s 70% benchmark 91% of customers believe The Body Shop provides honest and reliable information about social & environmental issues 94% of customers believe in the importance distributing information and educating through campaigns 98 % of customers stated their most important reason for shopping at The Body Shop was for product 90% of customers stated their most important reason for shopping at The Body Shop was because of the company s social and environmental commitment No major hotspots at this stage. The Body Shop is committed to maintaining this high satisfaction rating from our customers. To achieve 80% and more for all indicators related to customer satisfaction with TBS Australia s campaigning around social and environmental awareness.

4 COMMUNITY PARTNERS & NON-GOVERNMENT AGENCIES Volunteering and campaigning We truly believe that a business can effect positive change in the communities in which it operates This is part of our DNA. We don t do it because it s fashionable; we do it because this is who we are, this is the way we do business. Campaigning with our Values Partner NGO s on key social and environmental issues is at the core of what we do. We ulitise our store teams and consultants to campaign on key issues. Our store windows and website act as giant billboards to campaign for causes we believe in and that support our five core values: Protect the Planet, Defend Human Rights, Against Animal Testing, Support Commuity Fair Trade and Activate Self Esteem. We also believe that volunteering is an important part of life and we encourage our teams to be as active in the local community as they can. We have a policy to allow every member of staff up to 2 paid volunteering days every year. Our staff work as volunteers in the community during work time. The range of volunteering work our employees perform is always impressive. During the FY2011/2012 we donated 4,418 hours which is a 98.17% completion of our total allocation of hours. 90% recognise The Body Shop s positive reputation 100% believe The Body Shop takes active steps to make its business more socially responsible 88% believe The Body Shop has high ethical standards 88% believe The Body Shop delivers positive social & environmental change 87% believe The Body Shop consistently meets their most important expectations 81% believe The Body Shop is focussed on developing and maintaining an effective relationship 58% are satisfied with effectiveness of The Body Shop volunteers 60% satisfaction with The Body Shop s volunteer s performance 60% are satisfied with The Body Shop volunteer s willingness to carry out tasks To achieve 80% and more across all indicators related to our Community and Values Partner s satisfaction with The Body Shop and its work on supporting community issues, especially around volunteering.

5 SUPPLIERS Working with our Suppliers The Body Shop is committed to an all-encompassing and inclusive business improvement program through Social Auditing. This continuous improvement process provides an opportunity to better understand our suppliers needs, to evaluate performance and ultimately to strengthen our business. 83% believe The Body Shop acts with integrity at all times 80% believe The Body Shop operates in a professional manner 74% believe The Body Shop consistently meets their most important expectations 77% believe The Body Shop is focussed on a mutually beneficial relationship 66% believe The Body Shop effectively communicates with its Suppliers 67% believe The Body Shop can be relied upon to respond promptly to issues and concerns To achieve 80% and more with all indicators related to our suppliers satisfaction with how The Body Shop does business with them, especially around communication and issues resolution.

6 The Body Shop s ENVIRONMENTAL statement REDUCE OUR CO2 EMISSIONS BY 30% BY 2016 The Body Shop aims to solidify our position as a carbon accountable business through effective review of our business practices, staff engagement, data capture, monitoring and reporting of our carbon emissions. Voluntary action in climate change The Body Shop Australia as a whole is committed to reducing our CO2 emissions by 30% in our by Our focus is on devoting our resources to improving our own performance through emissions reductions and offsetting the rest. In short, we endeavour to be a carbon managed business. Lighting The energy we consume in our business through lighting makes up a significant proportion of our carbon emissions and we ve been working hard to make them more efficient through: 1. Reducing the amount of store lights used or wasted 2. Changing the type of globes used in stores to LED lights to improve their efficiency without compromising quality. We are pleased that our outright CO2 emissions have stayed more or less level, despite an increase in the size of our store numbers. Of course, this isn t enough if we are to meet our challenging 30% reduction target, but we believe that a continued and successful roll out of LED lighting via our refit program and behavioural change will help to accelerate this trend and achieve our 30% reduction target by Business Travel (Flights) The second largest contributor to The Body Shop s carbon emissions comes from domestic flights. This puts us in a good place to take strong action to reduce our footprint via a variety of actions. Our staff are encouraged to minimise the number of business journeys they make and use phone conferencing wherever possible and despite increasing store locations, air travel fell between 2009 and 2010.We continue to monitor this closely and will invest in improved facilities for conference and video calls to get us back on track Waste and recycling Waste and recycling is another big area of focus for us and we continue to look for productive ways to reuse or recycle items in our shopfits. We re also using specialist waste management collection companies to ensure as much of our waste is recycled as possible. Carbon Offsetting The final step with Carbon Accountability, after reducing, is to take meaningful action to offset residual emissions. We calculate and offset greenhouse gas emissions generated by our daily business activities through the purchase of Gold Standard carbon credits from Climate Friendly, a leading carbon reduction and offset organisations that provides leadership a reduce-and-offset approach to carbon management. ref: Climate Friendly s Gold Standard carbon credits from renewable energy projects help the renewable energy industry grow, puts more renewable, clean energy into the power grid and makes a difference to global warming. For the year 2010/2011 The Body Shop offset tonnes of Co2.

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