AMDP Final



To: Clark Hansen, CEO of AMDP
From: Alexis Zamora, Research & Development Analyst at AMDP
Date: March 10th, 2023
Subject: Intriguing Investment Opportunity in Burt’s Bees

As part of the Research and Development Department, it is my responsibility to figure out which companies are good investments for AMDP. After extensive research, we should heavily consider Burt’s Bees, an American personal care company that focuses on being Earth-friendly.

I will start by listing AMDP’s investment standards. I will then explain Burt’s Bees background and sustainable practices. Next, I will give two expert opinions. Last, I will give my final recommendation.

AMDP Standards
To ensure we invest in companies that align with our values, we have come up with a set of standards. The following information describes the criteria needed for investments.

Triple Bottom Line
The triple bottom line proposes that businesses should not only focus on economic performance but also on social and environmental impacts. It can be broken down into “three Ps”: profit, people, and the planet (Miller).

  • Profit: Refers to the financial performance of a business, including revenue, profits, and return on investment.
  • People: Encompasses the social impact of a business on its stakeholders, including employees, customers, and communities.
  • Planet: Concerned with making a positive impact on the environment, such as resource, pollution, and waste consumption.

Corporate Social Responsibility
A business concept regarding a company's responsibility to operate in an ethical and sustainable manner, while considering the interests of its stakeholders, including customers, employees, communities, and the environment (Reckmann).

Social Enterprise
An organization that seeks to address social or environmental issues while also generating revenue (Barone).

Carbon Footprint
A measure of the total amount of greenhouse gas emissions, primarily carbon dioxide (CO2), produced by human activities. To measure a carbon footprint, calculate the emissions associated with an individual based on the amount of energy used, the mode of transportation, the type of fuel consumed, and other relevant factors. Reducing carbon footprint is important because greenhouse gases, such as carbon dioxide, contribute to climate change by trapping heat in the Earth's atmosphere, leading to rising global temperatures, melting glaciers, sea level rise, and more frequent extreme weather events. (University of Michigan)

Background on Burt’s Bees
Burt’s Bees was created in 1984 and has become a leader in the natural and organic personal care industry. Burt's Bees products are made from natural ingredients, many of which are sourced from sustainable, organic, and non-GMO sources. The company has continually shifted towards being more environmentally friendly and prides itself on sustainability.


Sustainability Progress and Future Goals
As of today, the biggest milestones Burt’s Bees has achieved in sustainability are as follows. (Burt’s Bees)

  • Carbon Neutral Certified since 2015
  • Renewable electricity usage of 100% (U.S. & Canada) since January 2021
  • Recycled materials usage of 50% across its products
  • Leaping Bunny Certified: No animal testing
  • Planted over 15 billion wildflower seeds
  • Third-party audits on material sources companies (worker safety, sustainability, & ethics)
Despite its continuous improvement in sustainability, Burt’s Bees believes there is still much room to grow. In order to improve, it has set the following goals. (Burt’s Bees)
  • A 50% reduction in virgin materials by 2030 compared to its current usage
  • Aims for 100% recyclable, reusable, or compostable packaging by 2025
  • Offset plastic footprint through investments in U.S recycling infrastructure

Financial Success
In 2021, Burt’s Bees reached its peak revenue of $270 million. Revenue has grown from $23 million in 2000 to $164 million in 2007 (Story). I couldn’t find a more detailed breakdown of their financials due to Clorox acquiring them. What we do know is that from 2009 to at least 2016, Burt’s Bees grew by double-digit percentages every year (Westaway).

Efforts for Diversity, Equity, and Inclusion (DEI)
Burt’s Bees has shown interest in DEI through their 2021 partnership with a local HBCU, North Carolina Central University (NCCU). They have pledged $25,000 per year for five years for the NCCU Eagle Angel Network, an angel investment network for NCCU entrepreneurs (Burt’s Bees). They have also started a program to pair local Durham-based Burt’s Bees and Clorox executives mentors with business classes. This goes hand-in-hand with their values, as a quarter of current board members are people of color.  

Clorox Acquisition
Clorox acquired Burt’s Bees in 2007 to become a more environmentally friendly company. The primary reason for Burt’s Bees selling their company was growth. What got the team at Burt’s Bees on board were Clorox’s clear intentions to shift towards sustainability. Their acquisition of Green Works and investments into their supply chain allowed management to be confident that it would not change Burt’s Bees eco-friendly approach.

The Clorox Company was previously owned by Proctor and Gamble, but became fully independent in 1969 (Clorox). Since then Clorox Co. has placed great emphasis on sustainability and Barron’s named them the 2023 Most Sustainable U.S. Company. It is more than reasonable to assume that Burt’s Bees and Clorox Co. both share similar values and efforts to improve sustainability.


Expert Opinions
Opinion 1 - Ethically Engineered on Burt’s Bees
Ethically Engineered is a website that provides brand overviews, specifically in terms of ethical and sustainable rankings. Ethically Engineered believes that Burt’s Bees's reputation as a clean brand still holds true, with a few exceptions. Ethically Engineered points out that a majority of its product packaging is plastic, which is harmful to the environment. Overall, Burt’s Bees collaboration with sustainable groups like The Nature Conservancy and Responsible Mica Initiative maintains its green and sustainable brand.

Opinion 2 - Barron’s on Clorox
Since 2019, Barron’s has ranked the most sustainable companies in the U.S. In 2023, Barron’s crowned The Clorox Company (Burt’s Bees parent company) the most sustainable company due to its diversity, product safety, and its decrease in plastic waste. Clorox’s current CEO is Linda Rendle, the first woman to lead the company, and has begun the “zero waste to landfill” initiative. Overall, Barron spoke very highly and positively of The Clorox Company and its subsidiaries

Recommendation
Burt’s Bees embodies all standards that we value here at AMDP. They rose to popularity due to their product being largely natural; a trend that has continued. Burt’s Bees has made a huge effort to reduce its carbon footprint, reduce its plastic waste, and source ethical materials from trustworthy companies. Their parent company, Clorox, has also shown a powerful standard by having a woman CEO, and a board consisting of over 50% women. After careful consideration, I strongly believe we should invest in Burt’s Bees as it is clear that they meet our standards and care about their people, their product, and their profit.

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