Avon - The Company for Women - Corporate Responsibility

Online Stores

Our ability to leverage technology enables us to reduce our environmental impact. Approximately 150,000 U.S. Avon Sales Representatives operate internet businesses, and more than 70 percent of orders in the United States are placed online. This arrangement greatly reduces the amount of paper we use. In 2007, approximately 7.7 million electronic orders were placed in the United States alone; as a result, we saved 346.5 tonnes of paper. Order placement through the internet, mobile phones and other electronic methods are also being expanded worldwide. We will continue to develop our service model to meet our customers’ needs while encouraging and implementing environmentally responsible behavior.

Product Shipping

Within the past ten years, Avon has implemented more efficient shipping practices, and this continues to be an area of focus for the company. For example, all orders are shipped from regional distribution centers in order to reduce the distance that our products travel to customers.

In addition, we have increased packaging options so that smaller orders ship in smaller-sized packages. In the United States, our distribution system flags small orders—consisting of 5–6 or fewer small-sized items that have a certain cubic volume—and packs them into padded envelopes, which utilizes less material and less space than our cartons.

Similarly, orders consisting of larger items that could require an entire carton on their own are flagged and packed in a larger-sized carton that can accommodate additional items from the same order. This enables us to reduce the total number of packages sent. Logistics and transportation is one area in which the Hello Green Tomorrow Task Force will be focusing its efforts over the next several months. Task Force members have already identified a number of key initiatives, and they are now in the process of exploring feasibility. We look forward to sharing updates on the efforts of the Task Force beginning in 2009.

Packaging

Avon’s package development group focuses on reducing the environmental impact of packaging in accordance with widely accepted packaging principles. These principles include source reduction and the use of recycled material and recyclable packaging. Following are recent examples of source reduction:

• Carton production: Our North American carton suppliers have committed to using renewable energy sources to produce cartons for Avon products. In 2008, approximately 48 percent of the cartons we purchased depended on renewable energy.
• Refillable packaging: The mark™ and Anew™ product lines have integrated refillable packaging solutions into five of their cosmetic compact products. Each time a consumer refills these packages, an average material savings of 0.15 pounds is realized. Avon continues to investigate the application of refillable options in additional product offerings.
• Skin So Soft cap restage: The Skin So Soft cap weight was reduced by 3 grams, and the annual worldwide material savings realized from this reduction is almost one quarter million pounds of material.
• Scalability: Our new, state-of-the-art distribution facility in Zanesville, Ohio, which will be fully functioning by summer 2009, will employ an expanded range of packaging options that will reduce packaging and allow for greater scalability according to size and number of products ordered.

We will continue to focus on improvements in our product packaging and look forward to achieving and reporting future successes in this area.

In February 2008, Avon Romania launched “Avon Romania Goes Green,” an effort to build on existing paper initiatives and accelerate Avon Romania’s journey to a paperless work stream. This initiative will serve as a model for adaptation in other Avon markets.

The program includes the four focus areas noted below (anticipated annual cost savings in parentheses where available), all of which we expect to be in place as of January 1, 2009:

• Green ordering: move to 100 percent electronic ordering, discontinue fax ordering and enable Representatives to order by text message ($41,000)
• Green processes: replace paper invoices with e-invoices, replace payment reminders with text message notifications and reduce the volume of print materials distributed to Representatives ($430,600)
• Green communication: promote electronic communication among Representatives and distribute Representative newsletter electronically
• Green company: paper recycling, education on key environmental issues and internal competitions to reduce environmental impact