The Honest Company

This week, our group presented on the case of Lululemon and their commitment to the environment. They claimed “Corporate Social Responsibility” and prided themselves in their innovative approaches to the environment, specifically in using environmentally friendly fibers such those found in their VitaSea line. They claimed to make athletic leggings with a seaweed-based fiber that promised health and beauty benefits. However, when tested, the results could not conclusively prove seaweed was a component in the fiber.

Much like this scandal, Jessica Alba’s “The Honest Company” has faced similar problems with environmental ethics. With a company that “prides itself on truthful marketing and using only safe, non toxic ingredients in its household cleaners, diapers, and personal care products,” why then is it facing a toxic scandal? The Honest Company faced backlash for using a chemical ingredient in their laundry detergent that the labeling promises is not contained within. Sodium Lauryl Sulfate (SLS) can irritate the eyes and skin has been linked to being toxic. So, in light of the scandal, samples of the laundry detergent were sent to independent labs in order to discover if “The Honest Company” was, in fact, being honest. Both results were positive with a representative from one of the labs (Impact Analytical) confirming “there is a significant amount of sodium lauryl sulfate (in the detergent).” “The Honest Company,” dissatisfied with the results, decided to conduct their own test. Their results were negative. However, their lab results came from the company’s chemical supplier, who didn’t test for the presence of SLC.

Still, the company denied all claims and the company began to explain that the surfactant Sodium Coco Sulfate, which like SLS is derived from coconut oil, was, in fact, the natural chemical alternative actually in the detergent. This is not the first allegations of false advertisement that the company has faced and with their reputation in jeopardy, “The Honest Company” should figure out how they are going to gain back their customer's trust. Rather than lying about great ingredients they could stick to just presenting the ingredient they do use in a simple way. Their value proposition focuses on natural ingredients; in addition, parents, who are the company's main customers, don't have to worry about the products being bad for the kids. Honest should move back towards natural and simple ingredients instead of creating false claims that they cannot live up to.

The Honest company agreed to pay $1.55 million to settle the lawsuit for the laundry detergent debacle (CNN). This isn't the first lawsuit that the company has had to deal with, yet it's customers continue to stay very devoted. It probably doesn't help that Jessica Alba, a very famous celebrity, is the face of the company. Anytime a celebrity is involved with anything, there is immediately a ton of attention drawn to the situation, which then can lead to controversy. Although the lawsuit has been settled the company still denies any wrongdoing in the case of the detergent. The company continues to grow every year and even has an estimated worth of $1.7 billion in 2015 (CNN). For the time being the company is still growing; however, with every lawsuit or scandal, the company takes another hit to its brand. How many more punches can the Honest company take before knocking out? Only time will tell.

-Group 5: Kelley Brennan, Keely Watland, Ashley Arcos, Daniel Begazo


Image: https://www.google.com/imgres?imgurl=http%3A%2F%2Fwww.schwimmerlegal.com%2Fwp-content%2Fuploads%2F2017%2F09%2FHonest-Comapny1.jpeg&imgrefurl=http%3A%2F%2Fwww.schwimmerlegal.com%2F2017%2F09%2Ftext-of-complaint-in-the-honest-company-v-honest-herbal.html&docid=mDrlCU-uWBhrhM&tbnid=_pvzzxd0WItDqM%3A&vet=10ahUKEwiRlczLl8fXAhVM_mMKHWCYDzYQMwjMASgGMAY..i&w=748&h=384&bih=949&biw=1920&q=honest%20company&ved=0ahUKEwiRlczLl8fXAhVM_mMKHWCYDzYQMwjMASgGMAY&iact=mrc&uact=8

Product Differentiaton: Unilever and SmartLabel

There exists a strong desire by sustainability oriented companies to bring attention to their environmentally friendly products. However, as demonstrated by the wine industry, confusion or misinterpretation caused by an imperfect eco-label can have an undesired effect on a consumer’s perspective.

The SmartLabel initiative appears to be leading the way in a new wave of product differentiation through transparency. Its online FAQ describes SmartLabel as a tool that provides customers access to detailed product information including nutrition facts, ingredients, third-party certifications, social compliance programs, relevant advisories, and other pertinent information. SmartLabel’s digital information can be accessed through an online product search feature or by scanning a product’s QR code through the app.

SmartLabel can potentially help consumers make more informed choices about the products they are purchasing while simultaneously allowing companies to environmentally differentiate themselves from their conventional counterparts. Although one might assume that this tool is used for exposing unfortunate realities within the production side of a business, that is not necessarily the case. For example, through SmartLabel, Hellmanns was able to discover that a key ingredient in their mayonnaise was actually domestically sourced. This allowed customers to resonate with their product, a food item that is a staple to traditional American foods.

Unilever is the most notable company to begin implementation of SmartLabel with over 1,700 searchable products. One of the main benefits to using this platform is that it presents factual information in an unbiased manner. This can be viewed as a trust-building mechanism for consumers who are looking to learn more about a product but are skeptical for the possibilities of being deceived. This provides the customer with the ultimate decision as to whether or not that truly want spend their money on that product or not to.

Such a service can be useful to customers that want as much knowledge as possible about their food and products, but there’s also an accessibility and convenience factor. People who don’t have smartphones won’t have access to this information, and as for people who do have smartphones, many of them may find it a hassle to try to use the SmartLabels. As opposed to reading typical label printed onto the product, consumers must 1) pull out their phone 2) open or download the app (which adds additional hassle), and 3) scan the code on the product. Even then they must wait for the app to work and the information to load. All of this can making shopping more complicated and time-consuming. Ultimately, having SmartLabels can provide information more clearly to consumers, but may be a hit or miss with the type of consumers examining the product.

1. Could this technological approach to bridging the transparency gap between the company and the consumer actually avoid eco-label confusion/misinterpretation indefinitely?
2. Would customers be willing to use SmartLabel technology in the future? Why or why not?
3. Do you see any flaws with the app? Do you have any suggestions for improvement?

Halibut 11: Mark Biedlingmaier, Jessica Li, Jamie Liu, Mark Nguyen, Erick Ocampo-Ramos

Unilever’s page on their smart labels: https://www.unileverusa.com/brands/smartlabel/?gclid=Cj0KCQiAi7XQBRDnARIsANeLIesURQ2jjAjqASc760sJaUMpjY55zrcR_tGx-_k0yNvq7bxoNfPj1fkaAulSEALw_wcB&gclsrc=aw.ds

Label Insight’s research on smart labelling: http://www.foodbusinessnews.net/articles/news_home/Business_News/2016/11/How_Unilever_is_embracing_tran.aspx?ID=%7BB3C5DB43-CB5F-4002-A8A4-5A7BA786B1DC%7D&cck=1

How Sustainable SCM Diversifies Business Portfolio

This week we discussed how companies may be disconnected to their supply chains. In the Walmart case study, we saw the benefits that a company can gain from managing their supply chain thoroughly and ensuring that their supply chain is sustainable. There is a strong correlation between sustainability and efficiency. For example, a company can reduce its costs, improve transparency and awareness within its supply chain, and improve its reputation and relationship with consumers.

This article explains how China’s factories are being shut down because they are not meeting pollution regulation standards. In fact, the Chinese Ministry of Environment has charged 80,000 factories have been charged with criminal offenses. China is incentivized to crack down on its factories' pollution practices not only to reduce emissions, but also improve China's standard of living and better integrate themselves in global commerce. To maintain its business with Walmart and other powerful companies, China is improving its qualifications by aiming to reduce carbon emissions in all countries and investing in advanced coal generations that will reduce overall pollution levels. China wants to remain in business with international companies such as Walmart. By investing in environmentally sustainable practices, China diversifies their business portfolio and is more appealing to its business partners. Walmart's consciousness of its supply chain and implementation of sustainable practices within all sectors of its business shows how impactful a company’s decision to help the environment can be.

Article: https://www.environmentalleader.com/2017/10/china-crack-factories-may-help-market-american-retailers/

Contributors: (David) Heng Wah Zeng, Justin Lee, Laetitia Waliry, Yuta Higuchi

Trader Joe's and Lack of Convenience Zone Recycling

      
     Did you know that retailers in your area are either an option A or option B location? Well neither did I until yesterday. I live around the corner from Trader Joe's in Studio City, CA., and for years I have purchased their 42.3 oz. lime sparkling water for .99 cents a bottle with a .10 cents CRV fee. Weekly I would return my empty bottles back to T.J.'s, get my credit for the bottles, and apply it towards my groceries. However, when I went about my usual routine this week, I was told that I could no longer redeem my bottles there, and that I would have to take my bottles to a recycling center 3.5 miles away. I stood there holding my bag of bottles wondering how I could be charged a deposit fee in my local store, and forced to go out of my city limits to be refunded. When I asked the store manager why they suddenly decided to do this, he stated that it was becoming too inconvenient for them to provide this service, and that their other local store decided not to do it either, so they joined them. I then called the regional manager of Trader Joe's and asked her about this change, and she said that not everyone in my area cares about recycling or the money like I do, and that they actually had complaints about people coming in with their bottles. She stated that they had a right to opt out of this process by paying a fee, and that is what they decided to do. 
      I immediately went online to the Cal Recycle website. It turns out that if your local supermarket does over 2 million in gross receipts a year must provide a way for you to redeem your bottles purchased at their location, or a recycling convenience center must be located within a half mile of the purchase. BUT as I found out through the public affairs department, there is a loophole; a store is either an option A store or an option B store. An option A store must return all CRV purchased bottles from their location only if there is no convenience zone recycling center, and an option B store pays a $100 a day penalty fee, so they do not have to redeem any bottles at all. Yep it turns out that my local Trader Joe's is an option B store, and has decided it would be more beneficial to pay the Cal Recycle department $36,0000 a year instead of crediting its local consumers. It may be beneficial for Trader Joe's, but what about it's customers? 
     There is more to consider. This impacts seniors or disabled patrons who don't drive and watch every penny they spend, how will they return their bottles? It will cost a local resident $1.05 in gas, plus an average of 30-60 minutes in travel and waiting in line for processing, plus the extra smog emissions and traffic congestion for driving out of the area to a recycling center. If taking public transportation this comes to $7.00 in bus fare (2 buses in each direction), and an average of 90-120 minutes in travel and waiting in line. As an admitted frugal consumer and environmentalist, I return 100% of all my Trader Joe's bottles for store credit, resulting in approximately $60 in yearly CRV fees (600 bottles). Not much of a dent in my overall savings, but I would be pretty upset if I had a yearly ritual of wadding up $60 and throwing it in the garbage. I would argue that I am probably not the only shopper that returns bottles, so perhaps many customers had more savings throughout the year. 
     Is there a more insidious reason for this decision? I began to wonder if this sudden change was due to the increasing number of houseless people in our neighborhood. Could Trader Joe's be discriminating against certain patrons in an effort to keep up appearances? I could not help feel that there was an element of gentrification based on this quick change in policy. They admit that they want to keep their customers happy, but which customers opinions matter to them? Obviously they owe nothing to individuals such as myself, but when considering our community as a whole, I wonder whose voices they are most influenced by. My mom is 86, a loyal Trader Joe's shopper, walks with a cane, is blind in one eye, and rides the bus, and is a bottle returner; guess Trader Joe's did not consider situations such as hers when making a policy change. 
     As for myself, I was given a list of all the local option A stores in my community that have to redeem their purchased beverage containers. Anyone can call Cal Recycle for the list. I will get my lime soda water across the street from Trader Joe's, and I know they won't miss my measly $600 a year beverage purchase, because now they don't have to go through the hassle of crediting me $60. This week has been very educational, I learned a lot about business relationships, and I had never thought about a store's responsibility to redeem CRV until it happened to me. I will leave you with this final thought, does a company that contributes to millions of bottles entering a neighborhood have a responsibility to their consumers to process them?

"I want to pursue a career in business sustainability. Where are green jobs advertised?" I often get this question posed by my undergraduate students. 

Here is a very good list of environmental job search engines provided by the career center at the Bren School of Environmental Science and Management at UCSB. 

I also often get the following question: "I don't have any professional experience, are there entry-level jobs?" Indeed, job searches might sometimes feel like a chicken and egg type of problem. You often need to have a job experience to get a job. So where do you start if you don't have any professional experience? One way to get over this challenge is to get internships. And there are plenty of these available. See for example the recent call for a sustainability intern at NRDC. 

But there are also lots of entry-level jobs. For example, Greenbiz Jobs, as well as Green Dream Jobs let you select "entry-level" jobs. 

For example, this post is for someone interested in sustainable responsible investing. Definitely an area with plenty of entry-level opportunities!