Section 172 statement -2020

Every decision we make as a board is to preserve the longevity of the business, and ensure we are working towards our long-term goals. In the recent environment we have had to make difficult decisions and at times have met as a board daily (along with a wider leadership group) to discuss options and scenarios to consider the longer-term consequences of everything we do. We have also made our ‘secret’ master plan public so that we can be held accountable to it and also demonstrates that we are thinking longer term.

Lush believes in the right to make a profit, but when making major business considerations and adjustments, all aspects of our core values will be discussed and kept in mind.  A balanced Lush business will always try to find profit whilst upholding the core values.

This is covered in the relevant sections of the Strategic Report, but our people are what makes the Company what it is, and thus our employees’ interests are considered at every turn.

We are very proud of our Employee Benefit Trust which helps empower our staff and protect their interests – Lush has been 10% Employee owned since 2017. Along with the other shareholders of the business, the Lush EBT owns a proportion of the Lush business and 5 trustees look after the trust on behalf of all staff. The board appreciates the contribution that every member of staff makes to the business and having all of our staff as beneficiaries of the EBT recognises their efforts and commitment in making us the Company that we are.

We do not believe that employees should be bought and sold with a business. The Company will not be bought or taken over by an external body, the EBT will have a say in ensuring that this does not happen. If the current shareholders decided to sell their shares to an external buyer, resulting in a change of control, then the staff through the EBT would have the opportunity to vote against such a move.

We have also launched a new website in the year to aid dialogue with staff – ‘weare.lush.com’. This website covers all aspects of our business to ensure staff are informed of all the latest developments.

We always wish to conduct our business so that all people who have contact with us, from our suppliers through to our staff and customers, benefit from their contact with Lush and have their lives enriched by it. No company is perfect, and we strive daily to get closer to the ideal vision that Lush people share. We will always want and demand more from Lush, so that our business practices match our own expectations, our staff and customer expectations and the needs of the planet.

For many years we have sought to maintain a transparent supply chain which means often switching to direct sourcing, developing ‘on the ground’ relationships and co-developing growing projects. We have seen that fostering good, honest, long-term relationships with suppliers is key to ensuring good quality control of ingredients as well as making sure all sources comply with our supplier policies (People Care, Earth Care and Fair Share Policy). In light of the recent pandemic, we are further assured that strong, trusted trading relationships are key to accommodating each other’s needs during financial difficulty. Through the use of webinars, we are now able to provide our suppliers with transparent updates on the health of our business as well as our upcoming goals. As each area of the world we work in experience their own struggles whether it be pandemic, drought or social unrest, by having direct relationships and shared values, we are able to also help each other build supply and trade resilience in the face of ever growing crises.

Purchasing our materials in this way, with face-to-face communication also helps us foster good, honest, long-term relationships with the producers/suppliers and guarantees uninterrupted supply of good quality materials to make our products. We are able to ensure our suppliers understand the needs of our business and we also understand the constraints of their operations.

Through buying direct from producers we are also able to support and help finance some really worthwhile and forward thinking projects worldwide that make us proud.

We believe that the customer is always right and as such if you are not happy with a Lush product, let us find a suitable alternative which will knock your socks off. We have a no quibble refund policy;  if you would prefer a refund, then no problem; just bring the product and your receipt. If you are unsure of which products will be suitable for you, let us give you a consultation with samples to try. We believe our customers have the right to enjoy effective products produced without exploitation of people or planet, safe in the knowledge that all ingredients are vegetarian and that we do not test any of our products or ingredients on animals.

We have gone into far more detail about this in our Impact Report, but community and environment is at the heart of everything we do – we don’t just want to negate our impact, put bluntly we want to make a positive difference in the world.  We like to give back to the community and help where we can through Charity Pot, FunD, Re:Fund, Spring Prize, The Lush Prize and more which are fully supported by all members of the Board.

We place emphasis on land protection, restoration and regeneration through improved practices such as agroecology and agroforestry vs chemically driven monocultures.  We continue to actively fight against animal testing through promoting alternative in-vitro testing and push for innovation to combat over-packaging such as the development of ‘naked’ product and our more recent ‘bring it back’ scheme where customers get 50p towards their next Lush purchase for returning their black pots which are then fully recycled.

In 2017 our Buying Team decided a strategy was needed, within our work, to protect what is left of the world’s biodiversity.  It so happens that the majority of resources we rely on often originate from biodiversity hotspots around the world, where you will find the world’s richest soils.  We decided to focus on four geographical areas of the world, a decision which has always been fully supported by the Board. South America is one of these – as one of the richest biodiversity hotspots, home to many endemic species of fauna and flora, it is all the more important that we have a hands on approach to ensuring our purchasing practices support biodiversity rather than endanger it, especially in this area.  Agriculture is the biggest cause of habitat loss and ecosystem fragmentation and it was therefore vital that we adopt alternative agricultural/ harvesting practices which challenges more destructive agricultural approaches.

A Lush Sourcing Hub (sometimes an entity, or on the ground team) holds the space to directly support local communities and businesses who produce materials in ecologically and socially just ways, through the purchase of materials. This may involve working in more unconventional ways to help communities set up and scale up to supply the volume and quality of material needed.  It may also involve setting up demonstration farms/ forestry in order to influence and support alternative, more ecological ways of producing materials.

We feel that the way our ingredients are bought is where we can have some of the greatest impact within the business. The essence of Lush has always been to lead with life, and there is plenty of life to be preserved and regenerated – whether it be through creating social enterprises, restoring wildlife corridors or helping communities move away from the use of highly hazardous pesticides.

As members of the Board, it is imperative for us to maintain a high reputation in everything we do. When conducting business, such as buying, we have put a number of policies in place that consider the following:

– Workers’ rights – health and safety, freedom to leave, fair pay, working hours, discrimination, no child labour.

– Environment – organic, sustainability, endangered species, production emissions onto land and water, use of resources to process ingredients, no genetic modification.

– Animal protection – No animal testing of ingredients. Vegetarian ingredients only.

– Transport – The distance ingredients travel, minimum air freight, packaging materials used.

At Lush we have never liked to call ourselves an Ethical Company. We find the term rather a difficult concept, because it seems to us that it is used to describe companies who try not to damage people or planet with their trade practices – when surely this should not be regarded as ‘ethical’ but as ‘business as usual’.

We believe that all business should be ethical, and all trade should be fair. Individual companies should not stand out simply by not being damaging or unfair. No company should be trading from an unethical position and society has a right to expect as the norm fairness and resource stewardship from the companies that supply them. We always act in a way that supports this.

In essence, what this means is that shareholders (‘members’) are treated equally with regards to access to the financial information that they are entitled to in their capacity as shareholders, no matter the size of the shareholding, whether it’s 1%, 10% or 80%.  We are a privately held, family run business and there is shareholder representation on the Board, along with the EBT, and all decisions are made in the interests of the Company, taking every view into account.