CORPORATE SOCIAL RESPONSIBILITY REPORT 2017
“Nature doesn’t wait for you to see what she’s doing. There’s a seasonality to everything. Living on the land, and having the opportunity to see the seasons, is part of the joy of life, as far as I’m concerned.” —BURT SHAVITZ, 1935–2015
Contents
02
01: OUR STORY
04–11
Letter from General Manager Burt's Bees: The Bee's Knees Greater Good Business Model Sustainability 2016 Sustainability Milestones 02: OUR PEOPLE
14–17
Burt's Bees Culture Operational Footprint 03: OUR PURPOSE
18–21
Greater Good Foundation Register 10,000 Honeybees 04: OUR PRACTICES
22–27
Responsible Sourcing 99% Natural Formulas Packaging Improvements
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Craig Stevenson in the Burt's Bees Headquarters in Durham, NC.
A Letter from the General Manager Doing What Comes Naturally The Burt’s Bees brand has always followed its own path. We pioneered natural personal care products and embraced sustainability before the word was commonly known. According to Millward Brown market research, we enjoy the trust of millions of committed consumers. Our products are now available in 40 countries. Burt’s Bees is one of the world’s leading natural personal care brands, and despite the tough economic climate, we continue to post healthy growth. How did we get here? Acting as nature’s champion is how we’ve always grown our business. It was the motivation for our co-founders Burt Shavitz and Roxanne Quimby and still guides us today as a fully integrated subsidiary of The Clorox Company. Since our 2010 sustainability report, we have proudly achieved 100 percent natural ingredients in more than half of our products and became involved in the Gimme 5 partnership, a U.S. plastic takeback program. We’ve also made a strategic decision to focus our giving on a single mission: making valuable investments in human health through sustainable agriculture and community gardening, which also help honey bee populations thrive. While we are proud of our journey so far, there is much work to be done. Our business path to an even more sustainable future involves tough choices and uncharted territory. Although we met some of our previously set 2020 goals — including sending zero waste to landfill — years in advance, other goals need to be revised based on what we’ve learned. As we move to a “whole systems approach” by embedding sustainability throughout our product life cycle, we will undoubtedly encounter more challenges and trade-offs. This is a household brand that cares deeply about its consumers, the environment, our community, and each other. As we discover anew every day, sustainability is a journey that’s well worth the ride.
Craig Stevenson Vice President and General Manager, Burt’s Bees
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Burt's Bees: The Bee's Knees How It All Began It was the summer of '84, and Maine artist Roxanne Quimby was thumbing a ride home (back when you could still do that sort of thing) and eventually a bright yellow Datsun pickup truck pulled over. Roxanne instantly recognized Burt Shavitz, a local fella whose beard was almost as well-known as his roadside honey stand. Burt and Roxanne hit it off, and before long Roxanne was making candles with unused wax from Burt's beehives. They made $200 at their first craft fair and within a year they'd make $20,000. Pretty auspicious beginning—but just the beginning, all the same. From those first candles to the iconic beeswax lip balm we all know today, Burt's Bees has stayed true to a very simple idea: what you put on your body should be made from the best nature has to offer. We invite you to stick out a thumb and follow us on our uncommon journey—it's been one heckuva ride.
Building a Sustainable Brand The Burt’s Bees brand draws its inspiration from nature. We believe the beauty and bounty of the natural world provide the best answers when it comes making the best personal care products for people around the world. We seek to emulate nature’s resourcefulness in how we manage and grow our business. We also believe nature needs a loyal champion. Since our co-founders first sold homemade beeswax candles and lip balm at craft fairs over 30 years ago, we have offered truly natural products that are good for our consumers and help protect the environment. In pursuit of this mission, we have broken barriers and set milestones, changing the personal care industry along the way. Integral to our heritage, sustainability is the foundation on which we have built a financially sound business. Today, we are a recognized leader in the booming natural personal care products industry, with approximately 197 Burt’s Bees products sold in 40 countries. Our sustainability journey has helped power our growth into a household brand, with 400-plus employees and U.S. retail sales of $299 million in FY16, a 9.1 percent increase from the previous year. Our acquisition by The Clorox Company in November 2007 was a milestone in our evolution, bringing organizational change in people and process as well as exciting opportunities to bring natural, sustainable products to more people.
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Hive Wisdom Bees are personal to us. But bees should be personal to everybody. They are nature’s champions, providing a crucial ecosystem service — pollination — that helps power the cycle of life. One-third of everything that people eat, including many fruits, nuts, and vegetables, relies on bees. Found on almost every continent (except Antarctica) and in every habitat that contains insect–pollinated flowering plants, honeybees have much to teach our business about productivity, efficiency, and resourcefulness. As we learn and grow, the Burt’s Bees brand strives to continually learn from bees what it means to be nature’s champion.
NATURE’S CHAMPION Concerns from some consumers that our values as a sustainability-driven business may be compromised have proven unfounded. Under Clorox leadership, we have increased the percentage of natural ingredients in our products, further reduced our environmental footprint, increased our charitable giving, and brought greater transparency to our supply chain. Clorox has pushed us to improve in many areas, including reducing the amount of waste we send for waste-to-energy processing (better to not create waste in the first place!) and measuring water used in the manufacture of our products. What’s more, Clorox has made a strategic commitment to promoting health and wellness to consumers that fits perfectly with our natural product portfolio. Being part of Clorox has expanded our access to research and development resources, helped us think through our next generation of product innovation, and enabled us to reach the global consumer. As we progress, our goal is to build an enduring business that honors our heritage while advancing innovation that’s inspired by the wisdom and power of nature. We believe that nature has the best solutions to care for our bodies, since we are part of nature. That’s why we must also protect nature.
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It's not just a BUSINESS MODEL it's our life's work.
GOOD for you
the GREATER GOOD GOOD for us
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GOOD for all
The Greater Good Business Model The Greater Good Business Model Sustainability is embedded in our culture, operations, product development, and consumer and community outreach. Launched in 2007, The Greater Good™ (TGG) is the business model we use to operationalize sustainability. It’s our North Star, our means of navigating our corporate mission, strategy, and relationships with internal and external stakeholders. Over the past two years, while fully integrating with our parent company, Clorox, we have strengthened this business model. Today, TGG is the backdrop to every conversation our managers have, ensuring that business decisions meet the triple bottom line of people, profit, planet. The result, documented throughout this report, has been measurable progress across each of our sustainability areas.
Hive Wisdom Bees are not just our namesake. They’re part of our history, our culture, and our collective future. When Burt found his first colony of bees by chance back in the early ’80s, no one could have imagined what would come of his hives. But the wax became candles and then lip balm, and bees became our teachers. Their efficient and collaborative way of life became a model for our culture; their creations and pollination efforts became part of our products; and their connectedness to and stewardship of nature inspire our vision for sustainability. Throughout this report, we’ll draw on the lessons of bees and share how they are becoming both the inspiration for and the beneficiaries.
Sustainability 2016: By the Numbers
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countries that supply priority ingredients visited by our responsible sourcing senior manager
26
non-profit organizations awarded grants by the Burt's Bees Greater Good Foundation
3,103
employee service and training hours through our “Live the Greater Good Program�
71%
post-consumer recycled content for all primary plastic containers
9.6% drop in waste sent to waste-to-energy provider by switching to recyclable label backing
0 10
WASTE SENT TO LANDFILL FOR THE SEVENTH CONSECUTIVE YEAR
Sustainability Milestones 1984
1991
The Burt’s Bees® brand is born, selling hand-poured beeswax candles
Our famous Beeswax Lip Balm is created and quickly becomes our best seller
1999
2007
Our Milk & Honey Body Lotion pioneers a natural preservative system
We launch The Greater Good®, our commitment to responsible business practices
2008
2010
We develop the Natural Products Association's Natural Standard for Personal Care Products and Seal
We reach an average of 99% natural ingredients in our products
2011
2012
We celebrate our first-year full year of sending zero waste to landfill in our 3 U.S. facilities
Our responsible sourcing senior manager visits 8 countries that supply priority ingredients
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BURT SHAVITZ, 1935–2015 13
The Burt’s Bees Culture EMBEDDING THE BURT’S BEES CULTURE Championing nature and sustainability is what the Burt’s Bees brand is all about. And it’s our people who turn this vision into daily reality. Our 400-plus employees don’t just produce our natural, earth-friendly products — they live out our values at work and at home. We foster this culture, which not only benefits our communities and environment but unites our employees around a central business mission.
THE GREATER GOOD TEAMS Formerly, we had a group of volunteer environmental champions called the “EcoBees.” Eventually we said everyone has a part to play in reducing our environmental impacts and dissolved the group. Without people championing projects and programs, and monitoring goals, we found that we lost some traction and recognized that every cause needs leadership. So in 2012, we launched The Greater Good Teams to replace EcoBees.
LIVE THE GREATER GOOD We relaunched our Live The Greater Good (LTGG) team and program in July 2012 to focus on bringing our TGG business model to life in the community, with enriching opportunities for our employees to volunteer on paid time with non-profit partners. The program was previously structured to promote both training and service. For example, between July 2011 and June 2012, Burt’s Bees employees took part in 2,840 paid hours to learn and live TGG in four modules: community outreach, environment, wellness, and leadership. We were proud to achieve 98 percent employee engagement in LTGG during that time. Employees surveyed after LTGG events were enthusiastic, giving our efforts an average 4.5 rating out of 5. They expressed an interest in spending more time out of the classroom and in the community. We continue to strive for 100 percent employee engagement in our new, more community-focused iteration of LTGG. “At Burt’s Bees we believe business can be a powerful force for good in the world. We’re not perfect, but we take seriously our commitment to do business in a way that respects the human and environmental resources we rely on to be successful. At the end of the day, a belief in a greater mission that permeates employee culture is what makes it possible for a brand like Burt's Bees to exist.” —MATT KOPAC, MANAGER OF SOCIAL & ENVIRONMENTAL RESPONSIBILITY 14
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OPERATIONAL FOOTPRINT WE DO AS BEES DO Have you ever seen a bee's footprint? Neither have we. All those little gals do is fly from here to there, getting pollen all over everything as they quest for the perfect building material. But they take only what they need— and they leave their environment better than the way they found it. At Burt's Bees, we take our cue from nature. We've committed ourselves to making the world a little greener, a little cleaner, by doing what bees do best: working hard on natural products that people love. That's why, for example, we've committed ourselves to a policy of sending zero waste to landfill. With over 350 employees in three facilities, not a single piece of garbage goes to the dump. Not one. Really. How? Each month, our employees diligently volunteer to check over 200 recycling; composting, and waste to energy bins, ensuring everything is sorted properly. We're also serious about energy use. We know that our purchased electricity is the largest contributor to our carbon footprint — so we've outfitted our facilities with energy-efficient lighting, resource management software, and efficient production equipment. Our conscientious employees look for ways to save energy and water. And we're focusing more on the impact of our supply chain, including contract manufacturers and companies. But we also know that, as our brand has grown, so has our water usage, jeopardizing our 2020 sustainability goals. That’s not good enough for us. In the face of global freshwater scarcity and limited nonrenewable energy sources, it’s more important than ever to take only what we need.
SO, UNTIL WE CAN BE FOSSIL FUEL FREE AND WATER NEUTRAL, WE’RE OFFSETTING OUR ENVIRONMENTAL IMPACT IN OTHER WAYS: • Achieved Carbon Neutral certification from the Natural Capital Partners • Purchased Water Restoration Certificates from the Bonneville Environmental Foundation, returning millions of gallons of water — the equivalent of our own consumption — to watersheds like the Colorado River and the Middle Deschutes Watershed region in Oregon. • There’s still much to be done, but we’re determined to get there. Because we’re not just creating a better world for ourselves—we’re also doing it for the little yellow and black pollinators who live in harmony with nature, and to whom we owe so much. 16
Operational Footprint IMPROVING OUR OPERATIONAL FOOTPRINT It might seem obvious, but we can’t make natural products without plentiful, renewable natural resources. Like most companies, to operate we also require some non-renewable resources. But we work extremely hard to conserve nature’s bounty. For more than five years, we’ve been tracking our waste, water, energy, and greenhouse gas (GHG) footprint and working hard to shrink it. Our long-term aspirations are ambitious — we want to eliminate waste and carbon, and achieve water neutrality. We put our money where our heart is. Since our sustainability mission and our business model are one and the same, we traditionally tied all employee bonuses to our waste, water, and energy performance. This changed in FY2013 with our integration into The Clorox Company payroll system, but footprint reduction still plays a role in bonus calculations for many of our employees as part of their personal objectives.
SHRINKING AS WE GROW Since we are a growing company, shrinking our footprint doesn’t necessarily mean reducing the actual volume of energy, waste, and water we use. Rather, our overarching goal is to reduce our operational footprint after normalizing our measurement of resource use to take account of business growth. At our manufacturing plant, we do this calculation based on kilograms of product compounded, and at our distribution facility, based on master cases shipped. In previous years, we normalized by the number of units we produced, but we have adjusted this to more accurately reflect our operations. Resource use at our headquarters is not normalized, so all expected reductions there are in absolute terms.
Hive Wisdom Bees build hives and produce honey with hardly any waste energy or material. In fact, in any properly functioning ecosystem, waste equals food or building material. Just like our signature pollinator, we want to be a model of efficiency in how we use and renew natural resources. 17
The Greater Good Foundation In 2007, we established The Burt's Bees Greater Good Foundation, a 501(c)(3) non-profit organization dedicated to sustaining charitable, grassroots initiatives that support human and honeybee health. Since its inception, The Burt's Bees Foundation has issued over $2.4 million in grants. In 2016, the foundation donated over $423,000 in proceeds to several nonprofit organizations in the United States. Over the years, the foundation has supported pollinator health in a variety of ways, issuing over 250 grants for programs spanning research, education and conservation. Our recent focus has been on establishing nutritious pollinator forage. In 2016, Burt's Bees launched the Bring Back The Bees program, in partnership with Rural Advancement Foundation International, or RAFI, and public conservation and farm service agencies. Together, we'll plant wildflowers alongside farmland to provide pollinators with nourishing forage. As of this summer and resulting form this program, we’ve already planted over 1 billion seeds!
FEATURED INITIATIVES We support sustainability minded partners, as well as our local Durham community, through funding and volunteer time. We even give our employees paid-time off for community service.
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Here's a sample of our current partners: RURAL ADVANCEMENT FOUNDATION INTERNATIONAL Based in Pittsboro, North Carolina, RAFI cultivates markets, policies and communities nationally that support thriving, socially just, and environmentally sound family farms. Our partner for Bring Back The Bees, RAFI will help run the program by sourcing seeds, offering best practices to farmers, and ensuring successful planting of pollinator forage. The Burt's Bees Foundation and RAFI will also engage public agencies, including the Natural Resources Conservation Service (NRCS) and Farm Service Agency (FSA), to help extend their existing programs that support farmers and pollinators. NRCS and FSA will also help maximize the impact of the program by helping get the word out to existing enrollees to their programs, in addition to providing technical support to the farmers.
ENO RIVER ASSOCIATION This Durham-based organization acquires land and conservation easements to protect water quality and wildlife, while making the outdoors accessible and enjoyable for everyone. The grant from The Burt’s Bees Greater Good Foundation helped ERA restore the Coulter Conservation Area, which will increase biodiversity, build pollinator habitat, improve water quality, and enhance the North Carolina Mountains to Sea Trail corridor.
HABITAT FOR HUMANITY Like its parent organization, the Durham chapter of Habitat for Humanity provides beneficiaries with safe, secure, affordable homes that help them escape the cycle of poverty. The grant from the Burt’s Bees Greater Good Foundation helps Habitat utilize pollinator-friendly, drought-resistant landscaping, as well as give homeowners the option to grow vegetable gardens in raised beds.
FARMER FOODSHARE Farmer Foodshare connects people who grow food with people who need food, building innovative healthy community food systems and enhancing community economic development. The grant from the Burt’s Bees Greater Good Foundation supports expansion of the “Donation Station” program, which allows farmers’ market shoppers to donate food or money for the purchase of food, all while supporting local farmers.
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Register 10,000 Honeybees Community Outreach OUR GOAL: Register 10,000 honeybee forage sites and 10,000 acres through partnerships of The Burt’s Bees Greater Good Foundation by 2020.
THE FLIGHT PATH: While our original goal of helping to develop a registry of pollinator-friendly landscapes would have created awareness about the habitat necessary for protecting the bees, we have determined that we can have a more immediate impact by directly supporting more sustainable food systems. Thus, we evolved our goal to focus on making 10,000 acres of agriculture more pollinatorfriendly, a goal that we achieved at the end of FY16. Through our Bring Back the Bees campaign alone, we supported 20 farms and over 6,000 acres of agricultural land by supplying wildflower seeds and technical assistance to promote bee-friendly land management practices.
HELPING FARMS BE MORE POLLINATOR FRIENDLY The standard for farming in the United States tends to be large, mono-cropped operations that rely on commercial beekeeping to provide pollination services, and spray pesticides to control insects that might harm the crops. These farms are veritable food deserts for bees due to the lack of other food sources, such as wildflowers, and pesticides can have unintended consequences, particularly if extra care is not taken to avoid harming beneficial insects. From over-seeding organic dairy pastures with clover to planting annual and perennial flowering “bee buffers,” and through our community outreach we hope to create permanent changes in our agricultural landscape that have a ripple effect, promoting a more harmonious relationship with honeybees and other pollinators.
Hive Wisdom Learning from honeybees includes paying attention when they warn us that they are endangered. The collapse of U.S. bee populations has implications for human food security as well as the future of our “hallmark species. That’s why championing efforts to save bees is at the heart of our giving program. A world without bees is unimaginable. We won’t let it happen! 19
Responsible Sourcing OUR GOAL: Trace, evaluate and monitor priority raw materials THE FLIGHT PATH: We continue to work toward our 2020 goal using our Responsible Sourcing Roadmap. We request detailed information from suppliers for ingredients we use. Some factors we evaluate are: location, quality, availability, and social and environmental impact. If an ingredient is deemed a high priority, we then partner with our suppliers to gather more data and may perform a site visit or conduct a third-party audit to learn more about its production, from growing through processing. The results of this work may lead us to seek third-party certification or convert to a more responsible source. We began this process with site visits for many of our waxes and butters, ingredients that are some of our most used, high-priority raw materials. With those evaluations nearly complete, we are now focusing on our oils, natural pigments and botanical extracts.
INGREDIENT EVALUATIONS WE EVALUATE MATERIALS BASED ON 5 KEY FACTORS:
Location
We investigate how far away the ingredient is, impacts to supplier community, and the nature of the local political climate.
Quality
We consider the quality of the ingredient and of our relationship with the supplier.
Availability
We factor in ingredient scarcity, grower capacity, whether we’re single-sourced, etc.
Environment
We evaluate potential environmental impacts including honeybee health.
Social
We engage with individuals and surrounding communities in our supply chain to understand potential social impacts.
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Hive Wisdom From flowers to fruits and nuts, bees pollinate many of the crops that produce our natural ingredients. Powered by nature— our most vital supply chain partner— we are dedicated to respecting the communities, individuals, and environment from which we source the ingredients for our products.
From beeswax to baobab, clary sage to shea butter, we’ve made it our mission to source our ingredients responsibly. Our passion for quality leads us all over the world — and no matter where we go, we respect the communities, individuals, and environments from which we source.
COMMUNITY SOURCED In 2012 we launched Community Sourced, an initiative focused on identifying ingredients fundamental to many of our formulas, selecting key regions where those ingredients are produced, and forming strong, mutually beneficial partnerships with communities in these regions. Our first project focuses on beeswax from Uyowa, Tanzania. Using a combination of new and traditional methods, Uyowa’s beekeepers are able to supply half of the wax used in our lip balms and other products. Our hope, and our goal is to source all of our beeswax from community sources and expand the program to include other natural oils, waxes and butters that we use in so many of our products. We also hope to reinvest in 10 such global supplier communities by 2020.
HOW WE SOURCE Since hundreds of natural ingredients are in our products, it’s no small task vetting them all — but we’re on our way. In 2010, we took a big step by hiring an Associate Director of Responsible Sourcing, who has helped guide our journey to greater transparency and traceability across our supply chain. We ask tough questions and mentor our suppliers on sustainability improvements; and we do so in order to offer products that truly exemplify The Greater Good®.
OUR APPROACH INCLUDES: • Business Partner Code of Conduct • Supplier Self-Assessments & Site Visits • Supplier Sustainability Plans • Third-party Audits • Ingredient Certification 23
99% Natural Formulas Product Formulations OUR GOAL: Maintain at least 99% natural formulations across our entire product portfolio.
THE FLIGHT PATH: We have continued to maintain a 99% average of natural ingredients across our entire product portfolio. For each of our products, the safety, efficacy and aesthetics of the formula are paramount. For example, in some of our water-containing formulas that require more rigorous preservation systems, we have not yet found a means to eliminate synthetic preservatives without compromising the safety and integrity of our products. Our research into alternatives continues.
Hive Wisdom We draw the inspiration for our personal care products from the beauty and bounty of the natural world, personified by bees and the bountiful environments in which they live. We believe natural ingredients, like the signature beeswax in our lip balms, provide the safest, most effective products consumers can buy. We also seek to emulate nature’s resourcefulness in dreaming up new products. 24
When you buy a Burt's Bees® product, you can expect the scent and texture of the best nature has to offer. Whether you're using Lip Balm, Body Wash, or Facial Cleanser, we want you to have a positive experience every time. That's why we take every step possible to keep our products fresh and useful for as long as possible. Sometimes we use synthetics to bolster those products' natural components. On average, our products are 99% natural; over half are 100% natural. How can you tell? Just look at the Natural Bar; it shows the exact percentage of each product's natural ingredients. This feature has been a mainstay of Burt's Bees® for as long as we've been in business. It's unique to our company, and we're proud of that fact. But we know what you're thinking: “99% natural? Why not 100% natural? What's the last 1%?” We get asked that a lot. Preservation of natural formulas is challenging and we’ve found that natural preservatives simply aren’t effective in some formulas. To ensure the safety, efficacy, and aesthetic of our formulas, we use the synthetic preservative phenoxyethanol at 1% or below in some of our water-containing products. We chose it because it is a non-paraben, non-formaldehyde-releasing preservative and is used broadly in natural personal care products. Yet we know we can do more. And in our pursuit of being 100% natural 100% of the time, we're always looking for natural preservatives that will work as well, or better, than their synthetic counterparts.
“Natural is important because we want to ensure we are feeding skin the nutrients it needs to thrive. This is why we are so serious about using the highest percent natural possible. We’re committed to maintaining an average of 99% natural across our portfolio as we grow and innovate with an aspiration to achieve 100% natural for all of our products. But with any ambitious journey, the last mile is often the hardest.”
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“It was a challenge to develop a package that embodies our values in a category — color cosmetics — where recyclability and recycled content are traditionally not valued. We had to challenge industry norms in order to arrive at a package that is made from recyclable material and contains 60% post-consumer recycled content. We had to ask ourselves ‘What if?’ and rethink how our lipstick packaging is made.” 26
Packaging Improvements Packaging OUR GOAL: Increase recycled content of primary container packaging by 40%, increase recyclability by 20%, and reduce total packaging materials by 10%.
THE FLIGHT PATH: We continue to increase the recycled content of our packaging, achieving an average of 34% by the end of FY16. This marks a 28% increase over our baseline of 2011 and is more than double an industry benchmark. We content by 40%, and we believe we can get there by increasing PCR in new product launches and making improvements to existing packaging. Currently, the percentage of total weight of our primary packaging that’s made with recyclable materials stands at 89%. The packaging types that are most challenging for us include the mixed-material flexible tubes in some of our face and body lines and film wraps for our towelettes line. However, we are in the process of converting all mixed-material tubes to high-density polyethylene (HDPE), and exploring outlets for our towelettes packaging. During the past year, we have also been updating our sustainability data management system to include packaging weight data in order to ensure more accurate measurement. This has enabled us to shift from tracking packaging materials based on number of units to tracking based on the weight of each package. We believe this gives a much more accurate picture of actual impact.
DESIGNING FOR RECYCLABILITY Because mixed material packaging is typically not recyclable, our packaging design team developed an entirely new, premium-feeling, purpose-driven lipstick package with no added weight. Not only did this result in a single material package that can be recycled, the lightweight package also results in a lower greenhouse gas footprint.
Hive Wisdom Honeybees require no packaging to transport their goods. They deliver pollen by hand—or rather, by wing. Zero packaging is a dream we one day may realize. Meanwhile, we aim to deliver our products in materials that make as light an impact as humanly possible on the environment.
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