Leading article: The value of corporate ethics


It is the end of an era for the Body Shop. Thirty years after its first store opened in Brighton, the ethical retailer is to be taken over by the French cosmetics giant L'Oréal in a £650m deal. Dame Anita Roddick, who stands to make about £130m from the sale, argues that it is a good thing for the company she founded. Others are calling it a gross betrayal of the Body Shop's founding principles. The Ethical Consumer magazine has threatened to slash the Body Shop's ethical rating if the deal is completed. It cites the fact that L'Oréal tests its products on animals and is itself a quarter owned by Nestlé, the bête noire of anti-poverty campaigners.

Without doubt, this deal tarnishes the brand and raises uncomfortable questions for Dame Anita. Her homespun philosophy of ethical business practices, feminism and environmental sensitivity seem a world away from the practices of the world's biggest cosmetics company. This is, of course, the attraction for L'Oréal - while the Body Shop is not the first ethical business to slide down the corporate route. Ben and Jerry, the two hippie ice-cream makers from Vermont, became hate figures for the anti-globalisation movement after they sold their company to Unilever six years ago. In the same year, McDonald's bought a slice of the socially conscious sandwich chain Prêt-à-Manger. Green & Blacks, the "fair trade" chocolate maker, was recently swallowed up by Cadbury Schweppes.

It is a shame when companies that have loudly trumpeted their anti-corporate values sell out to the very concerns they have always reviled. But we should not be too depressed: the very fact that these buyouts are taking place is indicative of the stunning growth of the ethical consumer market in recent years. Multinationals have no choice but to tap into this. While this may not excuse any individual hypocrisy, such mergers can actually be interpreted as a rather encouraging sign of the times. Consumers can take comfort from the fact that it would be commercial suicide for the parent company to tear up the ethical guidelines of their new acquisitions. And it can put pressure on the new owner to clean up its own act.

On the immediate level, it is disappointing when a trailblazing ethical company appears to swallow its principles along with its independence. But we should not lose sight of the bigger change in society that such companies have helped to bring about - and for that, at least, Dame Anita deserves some credit.

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