As a result of its Sustainable Trust guidelines becoming more stringent, the Co-operative Asset Management Group has sold its entire holdings of Avon shares, as it says its policy conflicts with the recent revelation that Avon tests its cosmetics on animals.
In its latest Responsible Investment Annual Report, the Co-operative says; “Our attention was recently drawn to an updated statement on animal testing on Avon’s website which seemed to contradict their longstanding claims. We highlighted our concern to Avon, but did not receive a response and have subsequently divested.”
The report further points out that the main reason the Group singled out Avon for its sustainable funds was down to the cosmetic giant's “statement that it was the first major cosmetic company in the world to end animal testing.”
Meanwhile, UK animal rights organisation Uncaged, are claiming that it was their complaint earlier in the year to the Advertising Standards Authority highlighting the statement on Avon's UK website that has "alerted investors to the truth about Avon’s animal testing."
“The Co-op has told me directly that they contact Avon directly as a result of the outcome of our ASA complaint,” Uncaged’s Dan Lyons told CosmeticsDesign-Europe.com.
Lyons further pointed out that Avon did not contest the organisation's complaint to the ASA and pledged to withdraw the statement. "This effectively confirmed their animal testing practices," he added.
When approached for comment on the matter, Jennifer Dwyer Vargas, director of corporate communications at Avon told CosmeticsDesign-Europe.com; “We don't comment on share movement.”
It has certainly been a rocky year for the cosmetic giant between poor financial results, allegations of bribery and the recent revelation of the company participating in animal testing, despite its very public policy.
Its fourth quarter sales took a significant dive as it posted a net loss during a time when it has also been wrapped up in the ongoing bribery investigation which saw vice chairman Charles Cramb leave the firm.
Then in February, PETA focused the spotlight on Avon as it announced that it had removed it from its ‘cruelty free’ list after discovering that it was performing animal testing.
Late April, the company then announced it had appointed Johnson & Johnson executive Sherilyn McCoy as its new CEO, ending the company’s four month search to replace Andrea Jung.
Speaking in a conference call, then outgoing CEO Jung accepted that the last year had been a challenging one for the company. “After a challenging 2011, the priority is restoring revenue growth. Direct selling is a momentum business. However, sustainable growth will take time, and there are still factors of macroeconomic weakness and internal volatility over the next several quarters."