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Avon 2008: An uplifting report for women

By Elaine Cohen (BeyondBusiness) on November 11, 2009 at 1:22pm.
Content: 

"Ding-Dong Avon Calling!" This is the jingle that pops into my mind when I think of Avon. The Avon I remember from my childhood is a more primitive version of the Avon Products Inc. we know today, a sprawling $10 billion company with 42,000 employees (called associates), 5.8 million independent sales representatives, a client base of over 300 million, and sales operations in over 100 countries around the globe. Avon claims to be the world’s largest direct seller of beauty and beauty related products. This is only the second corporate responsibility report by Avon, “the company for women,” though Avon claims a long standing ethical approach since 1886 based on core values of “trust, respect, belief, humility and integrity.” Avon now commits to a two year reporting cycle with interim web-based updates.

The title of Avon’s report is “Making the world more beautiful” which immediately created an association in my mind with the flawed beauty industry which perpetuates unrealistic visions of beautiful women and perfect body images in order to maintain a market for beauty products. This subtle message “If you are not beautiful, you don’t count” has been the cause of much damage to women’s self-image over the years. Avon’s mission, however, is improving the lives of women – their report is a testimony to the company’s massive positive contribution to the economic empowerment of women and support for women’s health. An unfortunate report title, I feel, but the report itself reflects the difference Avon makes in the lives of women, and society in general.

Andrea Jung, Chairman and CEO (though why she continues to sign off as Chairman, and not Chairwoman, makes me wonder) confirms that Avon is “the world’s largest microlender for women, extending some $1 billion in product and credit each year to help women start their own entrepreneurial businesses.” I think this important aspect of Avon’s business is often overlooked. Avon’s business model, which provides 5.8 million women with the opportunity to start their own enterprise, has clearly pioneered women’s economic empowerment. For a $10 commitment, a representative can get started, receive sales training, benefit from massive Avon advertizing, become an “upline” representative, recruit and train other women and potentially join the Avon Leadership program. Representatives are supported by “management associates on the ground in nearly every zip code around the United States and around the world.” That’s some network. In addition, Avon’s “philanthropic” program includes initiatives such as “Hello Tomorrow” which provides $5,000 weekly grants for women and girls to improve society for women.

Avon is a tireless campaigner for women’s rights, women’s health and women’s wellbeing, as evidenced through campaigns such as “Speak out Against Domestic Violence,” “Walk around the World for Breast Cancer,” and Avon’s global flagship pink ribbon campaign in support of breast cancer awareness and more. All these positive initiatives are well presented in Avon’s report.

Nonetheless, the report doesn’t discuss the challenge of maintaining active representatives, how many actually generate sales, and the actual scale of improved economic conditions of representatives. The report features testimonials of the most successful women who have realized their dream through Avon, but what percentage of Avon’s reps are so successful? How do reps perform against sales targets? And what are the problems that arise in supervising this massive network?

I am surprised by this report’s lack of attention to the end customer. In 2007, an Avon report found that “four in ten women in the United States (ages 15-64) had purchased an Avon product in the past year.” A large percentage of these women have the benefit of a direct relationship with the Avon sales representatives, yet very little is said about how the needs , concerns or complaints of these customers, a key stakeholder group, are reflected in Avon’s approach to business, corporate responsibility and product development. Avon reports investing in new technology to process consumer feedback, so hopefully the next report will be more enlightening in this respect.
 
Avon’s management of direct environmental impacts is well reported and shows reductions per product unit since 2004 in energy consumption (35%), GHG (30.8%) and water (10%). However, Avon’s overall absolute performance in energy consumption is static, GHG emissions are higher than 2004 levels (though improved in 2008 versus 2007) and water consumption reduced only in 2008. There is some discussion of the ways in which Avon is addressing absolute environment impact reduction strategy. Andrea Jung, Avon’s Chairman, initiated a Hello Green Environmental Stewardship Task Force in 2008 but no progress of direction is reported so far.

Supply chain management is under-reported – an area that Avon is working on more comprehensively. It is not clear how many factories or distribution centers Avon operates, or how responsible practices are enforced among its 16,000 strong supplier base. No data is provided about Avon’s supplier auditing program activities and results.

Finally, a comment on Avon’s workplace responsibility: 9 out of the 22 people on the Board are women, and 41% of the top Executive team is female – a high relative level but less than I would expect of a business so strongly identified with women and for women. Women make up 72% of the total workforce. Avon runs five associate networks in the company for Asians, Black Professionals, Hispanics, Parents and PRIDE (GBLT) associates, which promote diversity and representation of these groups’ needs to Management. I wondered how actively subscribed these networks are and what they actually achieve. Beyond this, however, there is no serious reporting of workplace impacts.

Communication:

This report was designed for online viewing only, and the PDF download is an add-on. The PDF is the exact content of the online website report, with each page of the PDF representing a page of on-line content. There is no index with page numbers in the printed version, which makes it hard to navigate the PDF – you have to go online to find the data – but all the PDF hyperlinks take you to the website anyway. The web-based report is easily navigable and pleasantly presented, and gives you the option to build your own report. The web-site also includes a nicely developed online survey which asks for quantitative and qualitative feedback.

Credibility:

This report is an uplifting report for women everywhere, in many ways. Avon’s contribution to women’s economic and personal wellbeing cannot be denied. But the report misses what I consider to be a number of material issues for Avon’s business – the impact of Avon in and on the beauty industry, the greening of Avon products beyond the direct environmental impacts of manufacture, the impacts of product packaging in the sales chain including disposal of Avon packaging by consumers, and more. The report is not assured, and contains no external commentary, which always reduces credibility in my view. This report is much like a first report – elementary, a little fragmented, full of promises to do more. As Avon’s strategic corporate responsibility matures, I am sure their reporting will as well.

Recommendations:

1. Perform a comprehensive materiality analysis and re-evaluate core issues for reporting.
2. Report more transparently on workplace and supply chain impacts.
3. Change the title.

elaine cohen
October 2009
elaine cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz/en , a leading CSR reporting and consulting firm, specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses. Elaine Cohen is an independent reviewer and has no relationship with the reporting company.