BUSINESS
R
oberto Marques stood up at
the Science Museum in
southwest London last week
to talk about the work that
his company, beauty giant
Natura & Co, is doing to pre-
serve the Amazon rainforest.
“Natura in Brazil has been
working in Amazonia for the
past 20 years, and really
demonstrated to the world it is possible
to combine sustainable development and
preserving the forest,” he told his staff
who had gathered for the event.
As the owner of brands such as the
Body Shop, Avon and Aesop, Natura & Co
is one of the world’s largest beauty com-
panies. It is worth $10 billion (£7.5 bil-
lion), employs 35,000 people and gener-
ated sales of £5 billion last year. It has
shares floated in Sao Paolo and New York,
with big shareholders including red-
blooded capitalists JPMorgan and Mor-
gan Stanley. But it is also one of a growing
number of businesses promising to bal-
ance profits with purpose. It is theworld’s largest “B Corp” — a company
committed to considering its impact on
the environment, the communities in
which it operates, and society. “We need
to balance people, planet and profit, and
it’s not about either/or,” said Marques. He
insisted that Natura was “not a philan-
thropic organisation”. “We’re a capitalist
organisation and we have shareholders.”
The first B Corp was registered almost
15 years ago, after three friends left
careers in business and private equity to
establish B Lab, the non-profit body that
oversees the B Corp model.
To become a B Corp, companies must
pass an assessment that grades them on
areas such as governance, workers, com-
munity, customers and the environment.
They are given a score — and must reach
80 points to achieve the certification.
“We’re all about redefining the role of
business... and making sure that every
business is a force for good,” said Chris
Turner, executive director of B Lab UK.
More than 4,000 companies — includ-
ing Ben & Jerry’s ice cream, Patagonia
clothing and Innocent smoothies — have
signed up to the charter. Sustainability
has been thrust even higher up the
agenda with Cop26 in Glasgow, where
Marques, 55, spoke about his company’s
mission to reach net zero by 2030.
Natura & Co was established in 1969 as
a beauty shop in Sao Paulo and it has“It’s a win for us because it’s a huge
innovation, it’s a benefit to our customers
who are buying the product, and it’s a
huge benefit for the local communities
because not only are we keeping the tree
standing, but we pay three times more to
them.”
Natura is not alone. The consumer
giant Danone, which owns brands such
as Actimel and Evian, has installed a bio-
mass boiler in its baby-formula plant in
Ireland to become carbon neutral, and
has taken polystyrene out of its yoghurt
pots. So far, about half of Danone’s busi-
nesses have achieved B Corp status. Its
UK business has a score of 86.2 points.
There are commercial reasons for
receiving the accreditation, not least with
consumers. Waitrose has an online “B
Corp aisle”, which stocks only brands
that have been produced by one. Accord-
ing to Danone, there has been a 31 per
cent increase in 25 to 35-year-olds choos-
ing B Corp brands over other ones.
However, a potential flaw of the B Corp
model, say critics, is that a business could
excel in one area but not in others and
still become certified.
Claire Mac Evilly, spokesman at Dan-
one, said companies could enhance their
score through measures such as provid-
ing staff with training unrelated to their
day job — parental classes in internet
safety, for example — and allowing them
time off for volunteering. “They don’t
cost very much money.”
As consumers increasingly shop for
brands boasting green credentials,
manufacturers are hunting for ways to
signpost products with a lower carbon
footprint. LVMH, Unilever, L’Oréal and
Henkel are creating a “scoring” system to
inform shoppers of the environmental
impact of the products they are buying.
Marques is convinced it will take a coa-
lition to ensure sustainability in the sup-
ply chain. “We can’t solve all the prob-
lems ourselves if we don’t work industry-
wide to create scale for our suppliers,
which normally are the same suppliers,”
he said. “So if you need to solve the plas-
tic problem ... if it’s just Natura, trying to
solve it on its own, or if it’s just L’Oréal, it’s
going to be really hard.”If we don’t
take care of
the Amazon,
we won’t get
to 1.5C
data, with an area equivalent to seven
times the size of London being cleared.
“If we don’t take care of the Amazon...
we’re not going to get to 1.5C [the target to
cap global warming],” said Marques.
At Natura, all levels of the company
must meet sustainability targets.
In Body Shop stores, for example, cus-
tomers can bring in empty bottles to be
refilled, and staff are encouraged to recy-
cle. “It’s core to our strategy,” said Mar-
ques. “A couple of years ago, we deliv-
ered on the financials but we didn’t
deliver on sustainability, and people
didn’t get bonuses.”
Sustainability is also entrenched in the
company’s supply chain. An example is
ucuuba, a fruit from the tree of the same
name that grows in the Amazonian
region, home to 30 million people. The
seeds contain a butter that Natura uses in
moisturiser.
Compared to cutting down trees to sell
for wood, local communities can earn
three times more selling the seeds to
Natura, according to Marques.‘We need
to balance
planet
and profit’
Multinationals are joining the ranks of
ethically minded ‘B Corps’. The boss of the
owner of The Body Shop explains why
SABAH
MEDDINGS
TOM STOCKILL FOR THE SUNDAY TIMESNatura’s Roberto
Marques, top,
uses seeds from
Amazonia in Body
Shop products,
helping save trees.
Like Patagonia,
right, it signed the
B Corps charterfocused on where it sources its products.
As the Brazilian government, led by Presi-
dent Bolsonaro, faces criticism for failing
to combat rising illegal deforestation,
companies such as Natura are hunting for
ways to drive economic development in
the region while protecting the forest.
Last year, deforestation climbed to a
12-year high, according to governmentB CORPS ARE BOOMING
500100200300400Source: B Lab UK2015201620172018 2019 20200Total number of B Corps in the UKyes.efo
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d
to
co
w
th121020So0in 2019 and cashed in when it
was sold to funds including
Warburg Pincus last year,
reinvesting the proceeds in
Netomnia. Chelot plans to
raise more cash in the near
future as part of its rapid
expansion, targeting towns
and cities where there are
only two other network
providers. YouFibre’s website
is advertising gigabit speeds
from just £22 a month.
Boris Johnson has set
targets to connect 85 per cent
of homes in Britain to gigabit
broadband — speeds of more
than 1,000 megabits perSmaller network players
known as the “altnets” have
been lining their pockets with
private equity money to
challenge the incumbents. In
September, for example, the
Goldman Sachs-backed
CityFibre raised £1.1 billion
from new investors including
Mubadala, Abu Dhabi’s
sovereign wealth fund.
Lasry is a well-connected
tycoon and donor to former
president Bill Clinton. Lasry
and his sister Sonia Gardner
co-founded Avenue Capital in
1995, specialising in
distressed-debt investing.
He bought the Milwaukee
Bucks basketball team in 2014
for $550 million, alongside
Wes Edens, now the co-
owner of Aston Villa.
Lasry also helped the
creators of Billions to craft the
premise for the hit TV series,
starring Damian Lewis as a
ruthless hedge fund tycoon.
Lasry recently quit as
chairman of Ozy Media, the
US digital media start-up that
collapsed after reports it had
tried to deceive bankers.Clinton backer throws weight
behind new broadband upstart
The swashbuckling US hedge
funder used by the hit TV
show Billions to make it
authentic has joined the race
to connect homes in Britain to
ultra-fast broadband.
Marc Lasry’s Avenue
Capital Group is providing
£73 million in debt to
Netomnia, a new network
provider hoping to connect
one million homes to full-
fibre broadband by 2023. The
move piles more pressure on
BT boss Philip Jansen.
A further £45 million in
equity has come from private
equity firms ESO Capital and
Advencap, along with
£5 million from Netomnia’s
founders. Part of the money
will be invested in a new
internet service provider
called YouFibre, Netomnia’s
sister company, which will
piggyback on the network.
Netomnia was set up in
2019 by Jeremy Chelot, the
former chief executive of
Community Fibre. He left the
London-based network firmJamie Nimmo Marc Lasry was a
donor to the
former American
president. Now
he is funding
NetomniaFresh concerns at governance of
group housing vulnerable adults
second that allow users to
download films instantly.
Chelot said his infrastructure
could support speeds of up to
ten gigabits per second.
The government’s goal has
sparked a wave of investment
in broadband infrastructure.
BT pledged to “build like
fury” after being told by the
regulator in March that it
could make a decent profit on
a £12 billion investment to
connect 20 million homes to
full fibre. Arch-rival Virgin
Media O2 announced plans to
upgrade its entire network to
full fibre by 2028.A company that provides
homes to some of the UK’s
most vulnerable adults has
received a damning notice
from the industry watchdog,
raising new concerns about
governance at one of the
sector’s biggest investors.
Falcon Housing
Association, which operates
952 properties, is “non-
compliant” with governance
and financial viability
standards, according to the
Regulator of Social Housing.
It also criticised how Falcon
entered into lease
arrangements with
companies linked, at the
time, to its directors and
shareholders.
Falcon is a little-known
non-profit organisation, but
its financial strength is critical
for hundreds of UK adults. It
also accounts for almost a
fifth of the rents collected by
Civitas Social Housing Reit, a
London-listed company
targeted by the short-selling
investor Shadowfall.The Sunday Times
revealed in September that
Shadowfall had uncovered a
series of transactions that had
not been disclosed to
shareholders.
Civitas had bought a care
homes group and then sold
the operating business to an
Isle of Man company part-
owned by Civitas directors,
while keeping the properties.
Civitas said it had decided
not to tell investors because
there was a “first-mover
advantage” in the set-up and
it did not want to give away its
secrets to rivals.
In response to the
revelations about Civitas,
Lord (Matthew) Oakeshott,director of the Value and
Indexed Property Income
Trust and chairman of Olim
Property, dumped his
£2.2 million stake and said he
was “appalled”.
The concerns about Civitas
and its tenants do not stop
there. Until recently, Falcon
and another provider,
Auckland, were controlled by
the entrepreneurs Faisal
Lalani and Jamil Mawji, who
made their fortune with the
99p Stores retail chain.
Between them, Falcon and
Auckland make up almost
half of Civitas’s annual rent.
In the wake of regulatory
pressure, the pair have
distanced themselves fromSabah Meddings the housing providers.
According to Companies
House filings, Lalani and
Mawji recently stepped down
from Falcon and Auckland.
Last week, Falcon’s
ownership was transferred to
a firm of solicitors.
Jonathan Walters, deputy
chief executive of the
regulator, said: “The inability
of non-compliant lease-based
providers to address our long-
standing concerns continues
to raise ongoing questions
about the future direction of
this sub-sector.”
Civitas said Falcon was a
“long-standing counterparty”
and that rent collection
continued as normal. Civitas
said Falcon had committed to
engaging with the regulator
and they would both continue
their work in “further
enhancing standards” across
the sector. It also said that all
transactions between itself
and Falcon had been “fully
independent”.
Falcon, Lalani and Mawji
were approached for
comment.The Sunday Times revealed Civitas’s dealings in September4 1SBThe Sunday Times September 12, 2
BUSINESSThe social housing City
slickers making millions
Sabah Meddings investigates how the flood of private sector finance threatens disaster for care providers and their patients