Body Shop finances go back to ethical roots.

Ethical beauty product retailer Body Shop has been through the mill somewhat in recent years, but it is finally getting itself back together. Founder Anita Roddick may no longer be pulling all the strings, but her principles have certainly not been forgotten.

The company releases its interim results for the six months to 30 August next Wednesday and should show a healthy return. Body Shop is expecting to see modest improvements over last year’s results, which saw the company reach operating profits of £29.7m on turnover of £381m.

But perhaps of more significance to investors is the company’s recent decision to once again adopt sustainability reporting.

Sustainability reporting takes the financial aspects of reporting as just one part of an overall picture of the company. An increasing number of companies are finding that financial reporting alone no longer satisfies the needs of shareholders. Sustainability reporting provides a greater picture of the organisation’s progress on goals against economic, environmental and social performance targets.

Sustainable governance is also a key part of this practice, with ethical issues such as globalisation, income disparity and ecological vitality taken into account when top-level decisions are made by the board. Body Shop had previously run a sustainability reporting programme, but was forced to drop it as the company faced trouble times and underwent significant changes to the business.

It claimed that the changes hampered its ability to publish ‘consistent and meaningful reports’ on social and environmental performance. It is five years since sustainability reporting was dropped, but the process has been used again for this year’s figures.

‘Our real commitment to progressing our social and environmental agenda does not lie in the reporting itself, but in our strategic decision-making, our actions, and our behaviour towards stakeholders,’ said Peter Saunders, Body Shop chief executive.

The company will use guidelines from the Global Reporting Initiative to measure performance in these areas, although it has admitted that not all the indicators have been adopted. It is focusing on those it believes will be of most benefit to stakeholders.

It did concede that it would incorporate more indicators for future reporting to benchmark its performance against other organisations.

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