Lush CFO on why being ‘sustainable is no longer enough’

Environmental issues have been central to the Lush’s strategy since its inception back in the mid-90’s and these commitments are reflected in its products and its supply chain.

“When the business was founded in 1995, consideration for the environment was not a common practice for many other retailers or manufacturers and Lush became known for its approach, which differed from many norms,” says Jon Tamagna, CFO for North America and group financial accountant at Lush, noting that the company quickly gained a reputation for creating small, fresh batches of handmade cosmetics and offering products that could be sold unpackaged to reduce waste.

“This commitment now goes beyond the product and invention and is ingrained across the business through environmentally-friendly policies that have expanded across our supply chain, manufacturing and retail operations.”

As the business has grown, and the climate crisis deepens, Lush has sought to go even further with its environmental policy, says Tamagna.

“Today, we recognise that being sustainable is no longer enough. We need to reverse climate change and biodiversity loss through the way we operate our business.”

Sustainable supply chains

Lush has a global ‘to-do list’ for climate and nature, focused on achieving five core goals:

• Using 100% renewable energy everywhere
• Regenerating forests and nature
• Reducing transport emissions
• Making its materials regenerative
• Standing up for climate justice and adaptation

“The culture at Lush is to always examine and challenge our practices and strive to make improvements as we grow and learn,” says Tamagna.

“Each business unit is supported by our ‘Earthcare and Sustainability teams’ to identify how to implement changes in order to make further progress towards our goals.”

Lush’s North American retail business, for example, has implemented measures that have reduced energy consumption by 20% and all energy needs for its retail stores are now powered by renewables.

“Within our supply chain, we gain transparency right through to the individual farms,” adds Tamagna. “To date, our North American business has invested over $7.5m in community-focused agroecology projects in over 21 countries.

“We are targeting emissions reductions for the top 50 ingredients that we source through transition to regenerative farming practices and renewable energy.”

He adds that 98%of the company’s paper and card, including transport packaging, now comes from recycled sources or future fibers and that all bottles and pots are sourced from 100% post-consumer materials.

Lush is also actively involved in public campaigns calling for the end of fossil fuel extraction and demanding action from global leaders.

Planet over profits?

As a CFO, Tamagna believes that many environmentally responsible decisions are also financially beneficial with improved efficiencies, reduced waste and energy conservation all impacting the bottom line.

“Decisions like this are easy to get behind as I can wear both a financial and environmental hat at the same time,” he says. “[But] some decisions, most notably the more cutting-edge solutions, do require more consideration and often come with significant capital investment and require implementation resources or in-depth change management. I work with our teams to evaluate which initiatives we can reasonably undertake and to help overcome barriers that might stand in our way.”

The company as a whole relies heavily on the expertise of its dedicated sustainability staff to progress its ‘climate and nature’ objectives, he says.

“We have people in our organisation who know far more than I do in these areas and the most important thing I can do is to ensure that their passion and expertise get a stage in these decisions,” he says.

“As a senior leadership team, we use the vast internal knowledge we have to support us when we determine how each proposed project would align with our overall strategy as we look to prioritise a balance of short-term quick wins and longer term, more significant changes.”

A central role for finance

The finance team at Lush plays a major role in educating the company’s broader community, including staff, customers and suppliers, on the climate emergency and the vital role they play in tackling it, explains Tamagna.

“On one hand, the finance department is an important compliance and administrative function, but primarily the department is a support function for the wider business,” he says.

“Sharing and elevating these principles that are fundamental to Lush gives the team an important grounding, which in turn, allows them to better support the rest of the business and helps guide decision-making to ensure we are working in aid of the overall strategy.”

He explains that his team of financial planning analysts partners with the wider business and provides insights and scenario planning that help to evaluate proposed ‘climate and nature’ initiatives.

“Our analysts also support project leaders to create metrics to measure the impacts of new programmes so that we can track our projects and report back on the results,” Tamagna says.

“We have hosted internal challenges to encourage staff in all different areas of the business to identify gaps or suggest new ways to support our plan,” he says. “Regardless of their team or role it is often our employees who can, and do, identify new areas of opportunity and help shape the future of the business.”

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