Taking a deep dive into pay equity

In June 2020, in the midst of the COVID-19 pandemic, Natura &Co launched its ambitious Commitment to Life for 2030 sustainability vision: A plan created to address some of the world’s most pressing issues including addressing the climate crisis, human rights issues, and circularity and regeneration.

Within these three pillars is a commitment to Protect Human Rights and Be Human-Kind by ensuring equality and inclusion across our network.

At the current rate of progress, the economic gender gap will take 257 years to close, according to the World Economic Forum and the United Nations. The impact of the COVID-19 pandemic, which has disproportionately impacted women, has further slowed down the already shockingly slow rate of progress. Women are bearing the brunt of the work at home, they are losing jobs at a higher rate than men, and the incidence of domestic violence has increased beyond what was already a high level.

So, there is much still to be fought for, and much to be done. For Natura &Co and the four businesses that are united by its name – Avon, Natura, The Body Shop, and Aesop - doing what is right for women is very much at the core of what we do.

When we created our Human Rights and Human Kind goals, we took inspiration from the seven UN Women’s Empowerment Principles and for gender equality we set very specific targets:

  • Equal representation with 50% women on board/senior team by 2023
  • Equitable pay by closing the gender gap by 2023
  • Living wage (or above) for everyone at Natura &Co by 2023

As patron of the UN Global Compact initiative called Target Gender Equality, we are committed to sharing best practices and learnings with the broader business community, which is why we’ve chosen to share our insights on how drilling down into the detail has enabled us to identify how we will close our gender gap well ahead of our 2023 goal.

One of our first steps on the journey to achieve our goal to achieve equitable pay by 2023 was to undertake a comprehensive in-depth study of our position on equitable pay and gender balance across 73 markets. We have partnered with global HR consultancy, Mercer to ensure independent quality assurance and the adoption of best-in-class methodology. You will find a case study of our findings on UN Women and UN Global Compact’s Women’s Empowerment Principles (WEPs) website.

Our goal is not just to meet statutory minimums but to go above and beyond to challenge ourselves. As a triple bottom line business, we intend to bring the same level of scrutiny to pay equity reporting as we do to financial reporting. And in doing so our ambition is make our reporting the most comprehensive, complete, and easy-to-understand pay equity study that’s been conducted to date.

With Mercer, Natura &Co’s remuneration team embarked on a comprehensive review of the current status of our pay equity, the insights from which you’ll find here. In March, we shared the findings of the research with our associates globally and are pleased to share them now with all our stakeholders.

We found:

  • At 13%, our raw gap is at the lower end of industry norms
  • Our unexplained gap – that which cannot be explained by legitimate factors – is very low at 0.9%. Experts tell us that many would consider this insignificant. At Natura &Co, any unexplained gap is unacceptable and thanks to our research we can now take action to close our gender pay gap ahead of our 2023 goal and ensure it stays closed
  • As a beauty business, Natura &Co employs more women in its workforce, particularly in customer-facing roles, and many of whom prefer part-time or flexible working. This has an impact on the overall gender pay gap. By the nature of our business, we will likely always have a significant pay gap, but notably no difference in pay on a like-for-like basis. We will, however, continue to find ways to effectively reduce the gap, while advancing opportunities for women.
  • By undertaking this deep dive into the current state of equitable pay within our business, we are now well-placed to deliver an action plan to reduce the raw gap as far as we can, while ensuring that the unexplained gap continues to close.

As a purpose-led group, it is essential that we continue to be transparent about our gender pay gap with all our associates and stakeholders, if we are to achieve our goal of creating meaningful change within our industry and beyond. And only by ensuring an ongoing deeper understanding of its complexities, will we play our part in achieving economic gender equity for all.

We hope the business community will work together with us to accelerate equitable pay across industries and to drive thoughtful and meaningful change that supports everyone in fulfilling their potential.

We look forward to sharing further updates on the progress of our Human Kind goals in the near future.

Warmly,

Paula Fallowfield, Group HR Director, Natura &Co