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Chanel CSR - MGMT 320 Business Ethics
- 2. IN THIS PRESENTATION CHANEL’s BRAND PURPOSE OUR RECOMMENDATION CURRENT CSR ISSUES A LOOK INTO CHANEL ETHICS CHANEL CSR PRACTICES FLAWS OF CHANEL FRAMEWORKS TO UNDERSTAND
- 4. 1975 CHANEL EXPANDS CHANEL starts its world-wide distribution, owning a total of 310 stores today THE STORY OF CHANEL 1925 CREATION OF THE LEGEND CHANEL introduces the legendary tweed suit and little black dress that redefined womens fashion 1909 CHANEL IS BORN Gabrielle Chanel opens her first shop in Paris 2011 FONDATION CHANEL CHANEL starts its world-wide distribution, owning a total of 310 stores today 2018 FIRST CSR REPORT RELEASED In an effort to be more transparent, CHANEL releases its first CSR report to the public
- 5. A HUMAN DRIVEN COMPANY A CREATION DRIVEN BRAND A COMMITTED LUXURY LEADER
- 7. BIOPHYSICAL LIMITATIONS scarcity of materials, climate change, environmental sustainability ANIMAL EXPERIMENTATION animal testing regulations and standards in the beauty industry LABOR RIGHTS the health and safety of laborers, fair wages, unionizing rights, child workers
- 10. CHANEL Customers Suppliers Shareholders Top Management Employees Competitors Trade Unions Community Licensees and Business Partners Lenders and Financial Community Authority and Regulatory Bodies Media and Influencers
- 12. $1.46 BILLION $2.69 BILLION CASH USED TO INVEST IN INNOVATION & CREATION STRATEGIES TOTAL OPERATING PROFIT FOR 2018 $18 MILLION IN NET DEBT FOR FREEDOM IN FINANCING STRATEGIC INVESTMENTS 15% INCREASE FROM 2017 IN CASH USED TO INVEST IN INNOVATION & CREATION STRATEGIES
- 14. 1% vs 15% PRADA CHANEL Investments in CSR 12% vs 37% PRADA CHANEL Cooperation with non-EU suppliers
- 16. A CREATION DRIVEN BRAND A COMMITTED LUXURY LEADER A HUMAN DRIVEN COMPANY SECURING RAW MATERIALS WITH CARE FOR THE ENVIRONMENT PROTECTING AND DEVELOPING INCREDIBLE SKILLS OF THEIR ARTISANS SUPPORTING RELEVANT TECHNOLOGIES BUILDING A MORE SUSTAINABLE RETAIL MODEL REDUCING AND COMPENSATING FOR CARBON FOOTPRINT EXPLORING RECYCLING OF MATERIALS IMPROVING HUMAN RIGHTS THROUGH SUPPLIERS ENCOURAGING LONG-TERM ENGAGEMENT, PERFORMANCE, AND WELL-BEING OF EMPLOYEES ADVANCING THE ROLE OF WOMEN IN SOCIETY
- 17. A CREATION DRIVEN BRAND A COMMITTED LUXURY LEADER A HUMAN DRIVEN COMPANY SECURING RAW MATERIALS WITH CARE FOR THE ENVIRONMENT REDUCING AND COMPENSATING FOR CARBON FOOTPRINT ADVANCING ROLE OF WOMEN IN SOCIETY
- 18. 1 2 3 A SUSTAINABILITY STANDARD FOR PALM OIL GREEN COFFEE HARVESTING IN COSTA RICA VALUING & SECURING RAW MATERIALS HUMAN RIGHTS IMPACT ASSESSMENTS
- 19. 200+ Audits carried out among high-risk suppliers in 2017 Ensure their two main raw material suppliers, India and Madagascar, undergo in-depth assessments 500 Audits planned within the next two years HUMAN RIGHTS IMPACT ASSESSMENT VALUING & SECURING RAW MATERIALS 1
- 20. Set up a supply-chain resiliency plan to preserve the profitability of coffee used in CHANEL’s skincare products 3yr Signed a renewable framework agreement to support provide financial security raw material suppliers Efforts increased Costa Rica’s coffees purchase price and profitability PRESERVING GROWING TRADITIONS IN COSTA RICA 2 VALUING & SECURING RAW MATERIALS
- 21. 50 Suppliers for palm oil used in CHANEL makeup products Conducted a traceability study of supply chair for palm oil to identify risky suppliers Educate these risky suppliers on their sustainable-sourcing approach A SUSTAINABILITY STANDARD FOR PALM OIL 3 VALUING & SECURING RAW MATERIALS
- 22. 1 2 3 REDUCE EMISSIONS TO ADHERE TO PARIS AGREEMENT TARGETS COMPENSATE FOR THE INEVITABLE EMISSIONS PRODUCE WITH GREEN POWER A CONSCIOUS CARBON FOOTPRINT
- 23. 1 A GOAL OF REDUCING EMISSIONS A CONSCIOUS CARBON FOOTPRINT 40% reduction of carbon footprint for glass perfume bottles 40,000 tons of CO2 direct emissions cut in half by 2030 162,000 tons of C02 indirect emissions cut by 46%
- 24. 100% Renewable energy increase the use of plant based ingredients Purchasing of Green Tariffs PRODUCE WITH GREEN POWER A CONSCIOUS CARBON FOOTPRINT 2
- 25. Empowering the local community The Sandalwood Program to replant trees Renovate and salvage buildings rather than creating new ones COMPENSATE FOR EMISSIONS A CONSCIOUS CARBON FOOTPRINT 3
- 26. 1 2 3 ECONOMIC RESOURCES AND ENTREPRENEURSHIP FOR WOMEN HEALTH AND SOCIAL PROTECTION SERVICES EDUCATIONAL AND VOCATIONAL TRAINING FOR GIRLS ADVANCING THE ROLE OF WOMEN
- 27. 1,600 Women gained employment or created businesses through training program Encouraged opportunities for refugees Supporting the sales of artisans in rural Vietnam ECONOMIC RESOURCES AND ENTREPRENEURSHIP ADVANCING THE ROLE OF WOMEN 1
- 28. EDUCATIONAL AND VOCATIONAL TRAINING 2,000 Young women who have completed vocational training Training women to install solar panels in rural India Financially supporting French women entrepreneurs “Les Audacieuses” ADVANCING THE ROLE OF WOMEN 2
- 29. HEALTH AND SOCIAL PROTECTION SERVICES 60,000 Women and girls benefited from improved accessibility to health services Breaking the cycle of poverty for vulnerable women and girls in the Bronx Improving the quality of life for women living with HIV/AIDS ADVANCING THE ROLE OF WOMEN ADVANCING THE ROLE OF WOMEN 3
- 30. FLAWS OF CHANEL
- 31. CURRENT FLAWS USE OF ANIMALS AS MATERIALS Leather bags & fur accessories CONTRIBUTING THOUGHTFULLY TO SOCIAL TO CULTURAL NORMS Cultural appropriation and diversity in representation ANIMAL TESTING LAW DIFFERENCES Ethical integrity when dealing with international laws
- 32. A LOOK INTO CHANEL ETHICS
- 33. DEONTOLOGY Shows public that CHANEL listens and acts to fix the problem Spreads awareness about tree cutting Sets an example for other companies CONSEQUENTIALISM Low investment comparably to reward Quick response results in lower damage Maintains the brand image
- 35. INITIATE THOROUGH SUPPLIER AUDIT PRACTICES AND PRACTICE SUPPLIER DEVELOPMENT CONTINUE SOCIAL REPORTING TO INCREASE TRANSPARENCY AND ACCOUNTABILITY COMPENSATE FOR PAST ACTIONS WHILE ALSO BEING PROACTIVE UNDERSTAND THE CORE MISSION OF THE BRAND AND REFLECT THIS INTO THE PRACTICES
- 36. APPENDIX STAKEHOLDER ANALYSIS PARIS AGREEMENTS FONDATION CHANEL FOCUS AREAS FONDATION CHANEL FUNDING CHANEL VS PRADA 4 CORNERS ANALYSIS CITATIONS PESTLE ANALYSIS HOW LUXURY BRANDS MUST EVOLVE LEATHER SUPPLIER: TANNERIES HAAS
- 37. PARIS AGREEMENTS (Additional Research +2 points) The Paris Agreement is an agreement within the United Nations Framework Convention on Climate Change, dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, starting in the year 2020 ● Keep temperature rise below 2 degrees celsius ● Must become more transparent and report emissions and their efforts to combat global warming ● Cut CO2 emissions by 596 tonnes from 2013 to 2014 ● 82% of the paper they use is recycled and certified ● Cut 2,595 tons of CO2 in indirect emissions from 2015 to 2017
- 38. STAKEHOLDER ANALYSIS Stakeholders Interests Sources of Power Salience Business/ Nonprofit Partners Working with Chanel to help the world, relationship with Chanel, practicing corporate social responsibility Informational Yes Customers High quality products, buying from socially responsible companies Economic Yes Suppliers (Tanneries Haas) Profits, relationship with Chanel and other partners, keeping the business family owned Economic, Informational Yes Shareholders Profits, Chanel’s long term growth, corporate social responsibility Economic, Informational Yes Top Management Profits, corporate social responsibility, luxury brand image, long term growth Economic, informational Yes Authority and Regulatory Bodies Chanel following all laws, prevention/reduction of harm to society Legal Yes
- 39. Shareholder Interests Sources of Power Salience Trade Unions Safety, fair wages, fair competition Political Yes Media and Influencers Brand image (theirs aligning with Chanel’s), relationships with Chanel and followers, money Informational Yes Licensees Brand image, long term growth, relationship with Chanel, profits Economic Yes Lenders and Financial Community Investing in profitable companies, return on investment Economic Yes Employees Corporate Social Responsibility, fair compensation, job security Economic, Informational Yes Community Social programs, environmental protection, economic security Political No STAKEHOLDER ANALYSIS
- 40. FORBES: HOW LUXURY BRANDS MUST EVOLVE (Additional Research +2 points) JUST FOR PUBLICITY? CHANEL released a boomerang product that retailed for $3,200 The company was ridiculed for cultural appropriation of aboriginal boomerangs “It’s more about the mood of the times, not something you have to translate” - KARL LAGERFELD Accused of used other cultures as a minimalist design element
- 41. FONDATION CHANEL FUNDING (Graph +1 point)
- 42. FONDATION CHANEL FOCUS AREAS (Chart +1 point)
- 43. CHANEL FINANCIAL INFORMATION (Financial Information +2 points) $2.66 BILLION in OPERATING PROFITS $1.46 BILLION OF CASH REINVESTED INTO INNOVATION STRATEGY AND PRACTICES 2017 = 15% INCREASE IN CASH REINVESTED INTO INNOVATION STRATEGY $18 MILLION IN NET DEBT