FEB 2020 - BRIS ROCHER (PDG DU GROUPE ROCHER) (PLÉNIÈRE)

First, why did we become a mission-driven company? I think, as they say, we simply regularized our situation, because fundamentally, every entrepreneur when they create a company, at the origin, it is a mission-driven company because there is a desire to be useful in the eyes of the public, to respond to an unmet need. That was the case for my grandfather in 1959 when he created Yves Rocher. He wanted to offer natural beauty based on plants — remember the late 1950s, all-chemical was the way to go — and he also wanted to make beauty accessible to the greatest number of women, as it was reserved for an elite. So at the origin of any entrepreneurial project, there is this desire to be useful for the common good and to take part in a struggle. Over time, a company may lose that, but the desire is there. So to answer your question, a mission-driven company for me is a company that combines economic performance with consideration of the common good. It is fundamental to answer the question of what makes the company useful in the eyes of the public, as consumers demand it. But it is equally important to validate its business model, profitability, cost control, because that ensures the company's sustainability. So it's essential to play on both fronts: economic performance and common good. That's a first message. In fact, when the Macron government initiated the PACTE law with this mission-driven company status, my first reaction was to think: 'Here we go again, the government is offloading its responsibility onto companies.' I was skeptical, negative at first. I thought it was just a marketing commitment. But I soon realized that a company exists to serve customers, and customers want authenticity, transparency, commitment. Not doing it might seem more comfortable in the short term, but in my view it exposes you more. Not doing it means not meeting consumer expectations, and a company only thrives if it has customers who trust it.

Yes, very clearly, almost everywhere in the world, and for some time now. It's not a new expectation that emerged in the last two years. There is growing pressure from the consumer, and that's a good thing. It translates into the fact that the business world has shown great opacity in recent years, which is not the best way to reassure customers. So there is a form of mistrust towards the business world, fueled by fake news. But whatever, this fact is present. The best way to respond is through the mission-driven company: more transparency, explaining what we do, setting objectives, and reporting. As you mentioned, there is a need for regular audits and assessments.

Just a preamble: there are two dimensions in the PACTE law regarding mission-driven company status: the raison d'être and the status itself. You have to be careful because for me, this is probably one of the pillars of the law. The raison d'être is there to attract the greatest number of companies towards the status, but it does not commit to anything. If you determine your raison d'être but do not go as far as the status, it's again just words plastered on a wall or on your website. It is fundamental to provide proof of the raison d'être. The raison d'être is nothing without proof. And that is what the mission-driven company status allows. So one cannot go without the other. You must go all the way to the status to commit. The status involves: defining the raison d'être, translating it into cascaded objectives, creating a mission committee under the board of directors to produce a report on the company's progress against its objectives, and all of this must be certified by an independent third party. This mission committee and the third party have the power to force changes in the company's statutes if they find the company is violating its own stated purpose and objectives. So it is legally enforceable. But what matters more is the media risk: if three years later we have to change our statutes because we didn't meet our commitments, the customer will blame us. For us, the raison d'être of Groupe Rocher is to reconnect women and men with nature. We drew this from the roots of the company. We are very attached to roots in our family, and we believe a company must have roots if it wants to last. We like to plant trees. So we went back to the roots of the company and even to my grandfather's personal experience to determine our raison d'être. Let me give you four ingredients for a raison d'être: First, it must be authentic, so you have to draw from the company's roots. For us, we drew from my grandfather's personal experience. He had serious health problems as a child, and at 14, in 1944, he lost his father. He sought refuge in the Breton moorland for two years, spending his days in the woods. That brought him consolation, calm, protection. He realized early that nature has a positive impact on our well-being. When you realize that, you want to act for the planet. That is the challenge of Groupe Rocher: to act to respect and preserve our planet, but through a positive movement. First, let's realize that nature has a positive impact on our well-being. Simple exercise: spend a week in your basement and a week in the forest, then tell me where you felt more happiness. We live in an increasingly urbanized world, surrounded by technology, artificial lights, screens—we have distanced ourselves from nature even though we are a product of nature. So if we reconnect to nature, we will want to act for the planet. That's the first ingredient: draw your raison d'être from the company's roots. Second, the raison d'être must respond to current and future challenges; it must be useful in the eyes of the public. In our urbanized, tech-filled world, our goal as Groupe Rocher is not to oppose that but to help reconnect women and men to nature because it feels great and gives everyone the desire to act for our planet, which is our only collective home. Third, we are in a changing world, made even more evident by the health crisis and the economic crisis to come. It's Darwinian. Every company must transform and adapt. But the company's core values must remain a stable foundation. Identify values that allow the company to develop and grow, and do not vary them over time. Fourth, an exercise to ensure your raison d'être creates specificity or singularity: take a piece of paper, write the name of your main competitor, and write down your raison d'être as you have formalized it. If nothing seems different, two options: start over or merge with your main competitor—sometimes not a bad idea in today's world. So we have the roadmap: personal experience of the company, respond to a challenge, values, and find your singularity.

It's not new within Groupe Rocher; we have already addressed these singular objectives and we will continue to do so. I like to distinguish two types of objectives: conventional objectives, which are generic and should apply to any company regardless of sector, and singular objectives, which give substance to the company's raison d'être. For example, our mission is to reconnect women and men to nature. One singular objective is to plant trees. But we don't plant trees to offset our carbon emissions — a tree absorbs carbon and fertilizes the soil, but that's not why we plant them. We plant them because we do it with our communities: with our employees, franchised partners, independent consultants, suppliers, NGOs, farmers. It's a shared experience, a moment together. If you want to have fun planting a hedgerow, it takes all day. When you do that, you reconnect to yourself, to others (because you do it with a community), and to the planet. And it feels great. Then it makes you want to act for the planet. But does planting trees directly reduce our greenhouse gas emissions? No. That is a conventional objective that must be addressed by all companies regardless of sector. It doesn't give a specific identity to the company; it's a must-have. So we must set conventional objectives otherwise we risk being accused of greenwashing. But we also need singular objectives to give body to the raison d'être. Another singular objective: in Brittany, all our sites are biodiversity refuges. So when you go to a Groupe Rocher site in Brittany, you reconnect to nature. By 2030, all our sites worldwide must become biodiversity refuges — that's a commitment taken in the framework of this approach, with regular check-ups and annual certified reports.

Yes, obviously, but in the distribution dimension, we are probably more in the business model. Both must be addressed. You still have to be aware that it's fundamental to become a mission-driven company because it responds to consumer expectations, but that doesn't guarantee the profitability of the business model. For example, Uber is probably a mission-driven company — it's useful, it provides jobs in underserved neighborhoods, it's useful to customers because everything is smoother. But Uber has never made money, not even one year. That shows that a company has never gone bankrupt because it was losing money — it's just the ability to refinance. Will Uber survive forever? We'll see. So you need both: economic performance and common good. What Groupe Rocher did, and that's probably our luck, is we didn't wait for the crisis to pivot. Over the last five to ten years, we saw that retail, our primary distribution channel, while still performing, is suffering from declining foot traffic — about 4-5% decline each year. So we had to equip ourselves with a new leg. We developed, through internal growth or acquisitions, another distribution channel: social selling. This accelerates the digitalization of our business model. Social selling is direct sales like Tupperware parties, but done on social networks instead of at home. This increases the pie because we can do business without geographic proximity, and it uses the tools of today's customers. It works for some of the ten brands in our portfolio. We made an acquisition three years ago of a US company that operates on this channel, and it was a good decision because during lockdown, shops were closed (we have over 4,000 stores worldwide), but sales continued thanks to this channel.

Well, you are embellishing reality. I think my wife didn't appreciate me much during the first three weeks of lockdown, but that's another story. We had no visibility. Let's put things in context: it was totally unprecedented, a true cataclysm. What did we do? We opted for agility — that's the key in the period we're living in. We focused on very few things; we gave up a lot. It's Pareto's law. The first week I focused on cash, because as I said, a company has never gone bankrupt from losing money, only from financing issues. The second week on people — safety was a major issue because sites didn't close; Petit Bateau made masks, Groupe Rocher in Brittany made hydroalcoholic gel. Then we had to bounce back, so we focused on customers: how do we reconnect with them? Talking differently, finding a new tone and language. This crisis revealed something: we are social animals, not meant to be distanced from each other. Reconnecting with our customers, even just to check on them and listen, was a giant step. I don't want to say the job is done, but it's a need — we need to be connected. Social selling is exactly that: first connection, relationship, then business. It's like the mission-driven company: first economic performance, then how I am useful in the public eye. In commerce, it's first attention and relationship, then potentially a transaction.

That's a French characteristic: we don't move in calm weather, but when there's a storm, we have incredible reactivity. It would be good to have that in calm weather too. In any case, all companies put their employees on telework in less than three days. I still remember debates at the beginning of last year within the executive committee that didn't conclude, which would have dragged on for months with consultations. In less than three days, all French companies put their employees on telework. So we do have a capacity for reactivity rooted in us. That's a very positive element. On travel, of course we can no longer travel as before, but we learned to do otherwise. We learned that we could run the company without traveling. Next year, assuming the health crisis is over, I have already set the travel budget at half of 2019's actual level, and the executive committee is informed. This is better for the planet, saves money, and we bother local people less — a good thing. So it's beneficial for the company, the planet, and all stakeholders.

As I said, a well-rooted tree resists better. If you don't feed the roots, the tree will wither. Our intention is to continue our territorial anchorage. We invest every year in La Gacilly. We have strong challenges for Brittany, especially on CSR issues. This year, the centralized logistics platform will be low-carbon. I don't say carbon neutral because that implies compensation, and as I said, we don't plant trees to compensate — even though we do plant trees. But the centralized logistics platform of Groupe Rocher will be low-carbon by 2025. All industrial sites in La Gacilly will be low-carbon, and by 2030 all Breton sites in La Gacilly will be low-carbon. This should help, but it won't be sufficient to meet the objective we have set for ourselves: we have aligned with the most ambitious IPCC scenario of reducing our carbon emissions by 50% by 2030. So ambitious commitments that can be followed through the mission-driven company status with regular reports and mission committees.