avon corporate responsibility...

report2013 REPORT

the beauty of doing good

Avon CorporateRESPONSIBILITY

2013 Avon Corporate Responsibility Report 2

COMPANY PROFILE 3 CEO MESSAGE 5 ENVIRONMENTAL SUSTAINABILITY 6 PHILANTHROPY 20 PEOPLE 32 PRODUCTION & SUPPLY CHAIN 39 ABOUT THIS REPORT 51

Avon is committed to making the world a more beautiful and healthier place through our products,

our people, our environmental sustainability and our philanthropy. We empower millions of women around the world

financially through our earnings opportunity and support their health and safety

through the Avon Breast Cancer Crusade and Avon’s Speak Out Against

Domestic Violence initiative.

Table ofContents


CompanyProfilevon Products, Inc. (Avon), the company for women, is a leading

global beauty company with $10 billion in annual revenue in 2013, making us one of the world’s largest direct sellers. We are headquartered in

New York City, where our company was founded in 1886. As of December 31, 2013, we employed approximately 36,700 employees around the world.

Our products are marketed to women principally through direct selling by Avon Independent Sales Representatives and are available in over 100 countries. As of December 2013, Avon had more than 6 million Representatives and sales operations in 62 countries and territories—including the United States—and distributed products in 43 additional countries and territories via distribution partners and licensees. A complete list of our markets can be found on avoncompany.com.

For Avon’s recent financial and company information, read our financial earnings releases and 2013 Annual Report.

A

Company Profile CEO Message Environmental Sustainability Philanthropy People Production & Supply Chain About This Report

http://www.avoncompany.com/aboutavon/avonmarkets.html

http://investor.avoncompany.com/CorporateProfile.aspx%3Fiid%3D3009091



Avon’s core beauty products and related brands, such as Avon Color, ANEW, Skin-So-Soft, Advance Techniques, Avon Naturals and mark., represented 73 percent of our company’s net sales as of December 31, 2013, with fashion and home products representing 17 percent and 10 percent, respectively.

Our current product offerings are categorized by Beauty and Fashion and Home:

Avon strives to be an industry leader in many facets of corporate responsibility and sustainability. Following are select acknowledgments for our work in 2013. For a complete list of our awards and recognitions, please visit avoncompany.com.

CDP S&P 500 Climate Change ReportAvon received an 86 on disclosure and B on performance in 2013

Human Rights Campaign Foundation’s Corporate Equality Index Avon received a perfect score—100 out of 100—in 2013 for the second consecutive year

Interbrand’s Best Global Green BrandsAvon ranked No. 41 in 2013

Forbes’ World’s 100 Most Powerful WomenFORTUNE’s 50 Most Powerful Women in BusinessAvon CEO Sheri McCoy was recognized on both lists in 2013

OUR PRODUCTS

AWARDS & RECOGNITION

beauty • Color Cosmetics• Fragrances• Skincare

fashion & home • Fashion Jewelry• Watches• Apparel• Footwear• Accessories

• Gifts and Decorative Products

• Housewares• Entertainment and

Leisure Products• Children’s Products• Nutritional Products


http://www.avoncompany.com/aboutavon/awards-recognition

http://www.avoncompany.com/aboutavon/awards-recognition


ear Avon Stakeholders,

Avon’s commitment to corporate responsibility is at the core of our

company. In 1886, our founder, David H. McConnell, pledged that Avon

would “contribute to the well-being of society and the environment in which it functions.”

Today, more than 125 years later, that pledge remains fundamental to our business and is important to our long-term success. The commitments and strategies outlined in this report reflect business decisions that we believe better position us for success.

Our three citizenship responsibility pillars continue to be: People, with a focus on empowering women; Philanthropy, with a focus on ending breast cancer and domestic violence; and Environmental Sustainability, with a focus on reforestation and minimizing our footprint. As always, we are guided by our core values and principles, which include earning the trust of our stakeholders by exhibiting integrity, acting ethically, and embracing transparency.

A few examples of how we continued our commitment to corporate responsibility in 2013 include:

• PEOPLE: As the “company for women,” our priority to empower women is reflected in our commitment to recognizing and advancing women in our own workforce and helping our more than six million Avon Independent Sales Representatives achieve economic independence. Our business empowers millions of women around the world to be self-sufficient and to earn an income to support themselves and make a better life for their families. Since 1886, Avon has offered women a no-barrier earnings opportunity to support themselves and their families.

• PHILANTHROPY: Our 2013 philanthropic efforts made a difference in the lives of women and their families around the world. Since 1955 through the end of 2013, we raised more than $957 million through programs in over 50 countries for two of the causes most important to women: breast cancer and domestic violence. We are well on our way to reaching

our philanthropic goal of donating $1 billion in total funds by 2015.

• ENVIRONMENTAL SUSTAINABILITY: Our brochures make us a significant user of paper and we’re committed to helping end deforestation through internal efforts, policies, and our reforestation fundraising initiative, Healthy Forests, Beautiful World. In 2013, we raised $1.3 million through Healthy Forests, Beautiful World to support the reforestation projects of partner organizations— The Nature Conservancy and World Wildlife Fund— in Brazil and Indonesia, two of the most critically endangered ecosystems.

In 2013, we also made progress toward our 2020 goals to reduce absolute greenhouse gas (GHG), water intensity and waste across Avon’s operations. For example, as of the end of 2013, we reduced GHG emissions from Avon operations by 28.7 percent, surpassing our goal of a 20 percent reduction.

I’m extremely proud of the work our company is doing to contribute to our social and environmental stewardship. Through the dedication of our Representatives and our thousands of Associates, Avon is a responsible corporate citizen.

The journey does not end here, and we look forward to continuing to advance our corporate responsibility efforts in the years to come. On behalf of Avon, I invite you to explore this report to learn more about our progress and goals.

Sheri McCoyChief Executive Officer


http://avoncompany.com/aboutavon/history/values.html

Environmental

Sustainability

Avon has a long-standing commitment to managing our environmental footprint.

We continuously evaluate how to reduce the environmental impact of our operations and in the manufacturing of our products. A worldwide network of Avon’s global environmental management team and Associates across various disciplines support our policies, processes and goals. Our Associates are dedicated to environmental stewardship and apply the principles of sustainability to their daily work.

In 2013, we made progress toward our long-term 2020 goals focused on absolute greenhouse gas (GHG) emissions, water, waste and reforestation, as well as toward additional shorter-term goals addressing these areas and others, such as recycling and packaging.

External organizations rank our environmental performance within our industry. For 2013, we received a disclosure score of 86 (out of 100) and performance score of B on CDP S&P 500 Climate Change Report.



Avon’s commitment to climate change began in 1994 when we retrofitted many U.S. manufacturing and distribution sites with energy-efficient lighting. Avon is also a signatory of the CERES climate declaration, which calls on federal policymakers to address climate change. We have collaborated with CERES on sustainability initiatives since 2011. As a member of the Business for Innovative Climate & Energy Policy (BICEP), an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation, we abide byBICEP’s key principles, including promoting energy efficiency and renewable energy; increasing investment in a clean energy economy; and supporting climate change adaptation, technology transfer and forest preservation.

AVON 2020 ENVIRONMENT GOALS

AVON’S COMMITMENT TO CLIMATE CHANGE

GOAL PROGRESS

20% ReductionOf total GHG emissions from Avon

operations on an absolute basis by 2020 (base year 2005)

28.7% ReductionOf GHG emissions on an absolute basis from Avon

operations through the end of 2013 (goal achieved and ongoing)

40% ReductionIn water intensity—water consumption per Avon

manufacturing facility—by 2020 (base year 2005)

32% ReductionIn water intensity

through the end of 2013 (ongoing)

30% ReductionOf waste on a per unit basis—waste per Avon

manufacturing facility—by 2020 (base year 2005)

2.6% ReductionOf waste on a per unit basis

through the end of 2013 (ongoing)

100% of PaperPurchased from certified and or post-consumer recycled

content sources by 2020 with a certification preference of the Forest

Stewardship Council (FSC)

74% of PaperUsed in Avon brochures

purchased from certified and or post-consumer recycled content sources in 2013 and 25 percent

sourced from FSC-certified forests (ongoing)


http://www.ceres.org/declaration

http://www.ceres.org/declaration

http://www.ceres.org/bicep

http://www.ceres.org/bicep/principles


Avon has a longstanding commitment to managing our environmental footprint. We address key impacts across our business enterprise and focus on continuous improvement, with particular emphasis on the areas that are most important to our company, society and the planet.

GREEN BUILDINGS As part of our efforts to mitigate and reduce our environmental impacts, we support sustainable building practices. Through our Green Building Promise, we are committed to designing and building any new major facilities, as well as making renovations to existing facilities, in accordance with the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ certification standards.

The LEED certification system promotes a comprehensive, holistic approach to sustainability, focusing on energy savings, water efficiency, carbon emissions reduction, and stewardship of natural resources. In countries where LEED certification does not exist, construction and renovation projects aim to meet equivalent local standards.

As of 2013, the following Avon facilities have achieved LEED certification or equivalent local standards:

• Avon’s distribution center in Zanesville, Ohio, was our first facility to achieve LEED Gold certification

• Our Northampton, United Kingdom, administrative headquarters achieved BREEAM Very Good - New Build and was awarded the U.K. Green Apple Award

• Avon’s largest distribution center worldwide in Sao Paulo, Brazil, received LEED Gold certification

• Our distribution center in Guarne, Colombia, was the first new construction in Colombia to receive LEED Gold certification

• Our research and development center in Shanghai, China, received LEED Platinum for its interior space

• Our U.S. headquarters in New York, N.Y., was awarded LEED Gold for its interior space

EMISSIONS REDUCTION AND ENERGY CONSERVATION We continue to focus on reducing our greenhouse gas (GHG) emissions and energy consumption, as well as increasing the use of on-site renewable energy to reduce our carbon footprint. Avon aspires to achieve zero emissions by using 100 percent clean energy and we are proud of the progress we’ve made to reduce our absolute GHG emissions.

OPERATIONS


AVONGREEN

BUILDINGPROMISE

http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/operations/#green-buildings

http://www.usgbc.org/sites/default/files/_Trademark%2520Policy_2014.pdf


As of the end of 2013, we exceeded our goal and reduced absolute emissions by 28.7 percent from 2005. Although we are optimizing our carbon and energy use, we do expect our GHG emissions to fluctuate in the years leading up to 2020 due to potential growth of Avon’s business and diminishing returns on our investments in our renewable energy efforts. Therefore, we are continuing to pursue our 2020 goal of a 20 percent GHG reduction.

On our journey to zero emissions, we’ve also set a short-term goal to continue our progress. By 2016, our goal is to reduce total GHG emissions on an absolute basis by 5 percent from 2012 baseline levels. As of the end of 2013, we reduced absolute GHG emissions by 4.6 percent from 2012.

Challenges to our business resulted in fewer units produced in 2013, which affected our per unit carbon emissions—carbon emissions per Avon manufacturing facility. While our per unit carbon emissions increased 4.7 percent from 2012 to 2013, we’ve made significant progress since 2005. As of 2013, we achieved a 38.3 percent carbon emissions reduction per million units at global manufacturing locations from 2005 baseline levels.

2005 2006 2007 2008 2009 2010 20122011 2013100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

METRIC TONNES

158,497

153,920156,341

142,722 141,801136,050 136,751

118,408113,017

NOTE A breakdown of Avon’s 2013 absolute GHG emissions by scope includes: 27,962 metrics tonnes of Scope 1 emissions and 85,055 metric tonnes of Scope 2 emissions from our global operations. Our Scope 1 emissions represented here do not include direct emissions from our vehicle fleet, which totaled 35,490 metric tonnes in 2013.

ABSOLUTE GHG EMISSIONS (CO2e) Global Operations


By 2020, our goal is to reduce absolute GHG emissions from Avon operations by 20 percent from 2005 baseline levels.


In 2013, total energy consumption at Avon’s global manufacturing facilities—composed of on-site consumption and electricity—decreased 5.2 percent from 2012 levels—from 748,030 MM BTUs to 708,888 MM BTUs. Since 2005, we have reduced total energy consumption by 35 percent.

The Avon Green Building Promise contributes to a reduction in energy and GHG emissions. Avon’s GHG emission estimates are compiled by First Environment, an independent environmental management consultant that is a leader in the GHG field. First Environment is a signatory to the CERES principles (Coalition for Environmentally Responsible Economies) and also maintains ISO 14001 certification.

GHG EMISSIONS PER UNIT(CO2e) Global Manufacturing Locations

TOTAL ENERGY (MM BTU’s) Global Manufacturing Locations


2005 2006 2007 2008 2009 2010 20122011 20130

10

20

30

40

50

60

METRIC TONNESPER MILLION UNITS

48.3 44.4 44.3 40.0 35.7 33.3 35.7 28.4 29.8

2005 2006 2007 2008 2009 2010

2012

2011

2013650,000

750,000

850,000

950,000

1,050,000

1,150,000

http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/operations/#green-buildings

http://www.ceres.org/


2005 2006 2007 2008 2009 2010 20122011 2013100

150

200

250

300

WATER CONSERVATION Avon continues to take steps to use water wisely and conserve this resource, especially in water stressed parts of the world. We continue to implement projects to achieve zero water waste discharge in water-scarce countries where we operate, particularly in India, China and Brazil.

By 2020, our goal is to reduce water intensity—water consumption per Avon manufacturing facility—by 40 percent from 2005 baseline levels. As of the end of 2013, we reduced water intensity by 32 percent from 2005.

We’ve also set a short-term goal: By 2016, we aim to reduce water intensity by 5 percent from 2012 baseline levels.

In 2013, we reduced water intensity by 1.3 percent—from 159 gallons per thousand units in 2012 to 157 gallons per thousand units in 2013.

WATER CONSUMPTION INDEX (GALLONS/000’s UNITS) Global Manufacturing Locations



Our manufacturing sites globally are committed to efforts to reduce water consumption. In 2013, water savings initiatives at Poland and Morton Grove, Ill. manufacturing sites delivered 7 percent and 16 percent reductions in water consumption, respectively. Additionally, Avon branches in Acala, Spain, delivered a 75 percent reduction in water consumption, while Colombia branches delivered a 78 percent reduction in 2013.

2005 2006 2007 2008 2009 2010 20122011 2013340,000360,000380,000400,000420,000440,000460,000480,000500,000520,000540,000560,000

THOUSANDS OF GALLONS

542,139

529,781525,854

471,112476,574

428,264

396,107362,402

348,998

TOTAL WATER CONSUMPTIONGlobal Manufacturing Facilities


On an absolute basis, we reduced water consumption 3.7 percent—from 362,402,000 gallons in 2012 to 348,998,000 gallons in 2013. From our 2005 baseline, we reduced water consumption by 35 percent—or approximately 193,000,000 gallons.



With 33 owned and 27 leased manufacturing and distribution centers worldwide in 2013, Avon focuses on recycling and minimizing material use as we strive to reduce waste along the production cycle. This reduction has a meaningful cost savings and lessens our environmental impact.

WASTE REDUCTION

MATERIAL USE & PACKAGING

As of the end of 2013, we reduced waste per unit by 2.6 percent since 2005.

We continue to focus on driving further reductions and have set short-term goals as we work to achieve our 2020 target. By 2016, our goal is to achieve zero operational waste to landfill at five Avon locations across manufacturing and branch sites.

We are also targeting a five percent reduction in waste per unit from 2012 levels by 2016. In 2013, waste per unit at Avon’s manufacturing facilities decreased 9.1 percent from 2012—from 40.6 to 36.9 pounds per thousand units.

By 2020, our goal is to achieve a waste reduction of 30 percent on a per unit basis—waste per Avon manufacturing facility—from 2005 baseline levels.

WASTE INDEX (POUNDS/000 UNITS)Global Manufacturing Locations

2005 2006 2007 2008 2009 2010 20122011 201325

30

35

40

45

50


Despite reductions in waste per unit in 2013, we are not progressing as quickly as we had anticipated toward our 2020 goal. The large proportion of heavy sludge generated by our wastewater treatment facilities primarily contributed to this slower pace, with obsolete and expired products also contributing, but to a much lesser extent. However, we are finding re-use options for sludge, as well as for alcohol and cosmetics; recycling corrugated cardboard; implementing a waste to energy program; and educating Associates in global manufacturing locations on environmental initiatives. These efforts have resulted in the increase of our recycling levels and generated progress toward our 2020 recycling goal.


TOTAL ABSOLUTE WASTE (IN THOUSANDS OF POUNDS)

Global Manufacturing Locations

60,000

70,000

80,000

90,000

100,000

110,000

120,000

2005 2006 2007 2008 2009 2010 20122011 2013

On an absolute basis, in 2013, Avon’s global manufacturing operations reduced waste by 9.1 percent from 2012—from 92,447 to 83,998 (in thousands of pounds).


RECYCLING By 2016, our goal is to achieve an overall recycling rate of 87 percent across manufacturing and branch sites.

In 2013, we achieved an overall recycling rate of 84 percent. Among manufacturing sites only, we achieved an 81.8 percent recycling rate—Avon’s highest rate of recycling to date.

All of Avon’s manufacturing and branch sites are focused on achieving zero waste to landfill. Manufacturing facilities in Poland and Brazil led all regions with recycling rates at 90 percent. Among Avon’s branch locations, more than 10 locations were close to achieving zero waste to landfill in 2013—recycling rates over 90 percent—including sites in Zanesville, Ohio, and Cabreuva, Brazil.


RECYCLING EFFICIENCY (% MATERIALS RECYCLED)Global Manufacturing Locations

2005 2006 2007 2008 2009 2010 20122011 201340

50

60

70

80


PACKAGING Avon uses a variety of plastic, glass, paper and cardboard packaging materials in our products. We aim to continually reduce the environmental impact of our packaging during our new product development process and on-going business operations. To do so, we have reinvigorated our efforts by assigning a senior executive to lead and oversee a cross-functional team that is mandated with driving sustainable packaging innovation at the company. All sustainable initiatives are designed to ensure a high-quality product: the package is safe, suitable for consumer use, and meets all legal guidelines.

Avon addresses the environmental impact of packaging through two key areas: the amount of packaging and the materials and processes required to produce the packaging.

We continue to make significant progress toward our goal. For example, the majority of our PVC usage is in protective and tamper evident shrink sleeves across multiple product categories; we are working to replace these PVC sleeves with more sustainable PET/OPS sleeves.


By 2015, our goal is to discontinue the use of polyvinyl chloride(PVC) in our beauty packaging across all markets.

PROGRESS TOWARD GOAL TO DISCONTINUE POLYVINYL CHLORIDE (PVC) IN BEAUTY PACKAGING BY 2015

REGIONSTATUS: DISCONTINUING

PVC IN BEAUTY PACKAGING BY 2015

DETAILS

Latin America (excluding Venezuela)

AchievedEliminated PVC from packaging

waste stream and have been PVC free since 2009

North America On TargetWill reduce PVC consumption

by 50% in 2014

EMEA On TargetWill eliminate PVC sleeves through

the qualification of PET/OPS sleeves in 2015

China On TargetWill eliminate PVC usage across its

major brands – Naturals, Skin-So-Soft, and Nutrition Capsule in 2014

India On Target

Converted 188 million PVC sleeves in 2010 and is on target to replace the PVC sleeves in the Color Cosmetics

Category in 2015

PhilippinesOn Target

Initiated a program in 2013 to convert all new product launches to PET sleeves. Inline products that use PVC sleeves are on schedule to fully

transition to PET by 2015


In 2013, we continued to evaluate additional opportunities to reduce the impact of packaging through the following initiatives:

• Carton elimination: Many Avon products and product categories are offered without outer cartons, including lipsticks, body lotions, bath products, and personal care products, such as deodorants, haircare and other categories.

• Carton production: Our North America carton supplier, Graphic Packaging, meets the SFI Sourcing Standard (Certified Fiber Sourcing) and only uses pulp from pine trees that are managed under sustainable forestry practices and uses approximately 100 percent of the tree and leaves no ground waste behind.

• Refillable packaging: The mark. brand has integrated refillable packaging solutions into two of its cosmetic compact products. Every time a consumer refills these packages, an average of 0.15 pounds of materials is saved. In 2013, the Latin American region began producing the 400ml Encanto Lotion refillable package and sold refillable liquid soap. In addition, other markets are investigating refillable jars and cosmetic compacts.

• Lightweighting: Many plastic packaging and caps are “lightweighted” to reduce the overall amount of materials they contain while still providing the necessary strength. In 2013, Avon’s Personal Care category began implementing an HDPE to PET conversion project in 2013 for body washes globally, which will result in the reduction of an estimated 12,900 pounds of resin per year globally.

• Scalability: Avon’s global distribution centers use multiple case sizes to minimize corrugate usage per order. Our facility in Pasadena, Calif., utilizes bliss style cases that use approximately 20 percent less board than a typical regular slotted container.



As a direct seller whose ‘store’ is the brochure and printed materials, with virtually no brick and mortar stores, Avon is a significant user of paper. Deforestation affects the health and well-being of our society and environment. We are committed to helping end deforestation through internal efforts and policies, including the Paper Promise and Palm Oil Promise, and our reforestation fundraising initiative, Healthy Forests, Beautiful World.

AVON PAPER PROMISEAs a significant consumer of paper products, Avon can influence both supply and demand in the market. In March 2010, we announced the Avon Paper Promise, a comprehensive policy for promoting responsible forest use and protecting forests.

We are committed to optimizing our overall use of paper in every area of our business, including distribution methodologies, basis weight reductions, reductions in brochure size, and increasing the use of electronic media as a replacement for paper-based products. We also continue to leverage technology and establish paperless processes wherever possible.

As of 2013, 74 percent of Avon’s brochure paper met the Avon Paper Promise commitments, and approximately 25 percent of paper used in Avon’s product brochures is sourced from FSC certified forests.

Moving forward, we will continue to report on our ongoing activities to implement the five points of the Avon Paper Promise:• Promoting sustainable forest use. Protecting forests. Protecting old growth,

high conservation or endangered forests and ecosystems.• Reducing demands on forests.• Promoting clean production practices.• Promoting continuous improvement.• Remaining transparent to customers, shareholders, and other stakeholders.

To achieve these goals, we are tracking and reporting, through the Global Forest and Trade Network, the amount of wood fiber we purchase from suppliers certified under each of the forest certification systems. We also continue to consult with external stakeholders to review emerging issues related to environmentally responsible fiber and implementation of our Paper Promise.

Read the full Avon Paper Promise on avoncompany.com.

REFORESTATION


By 2020, our goal is to purchase 100 percent of our paper from certified and/or post-consumer recycled content sources with a certification preference of Forest Stewardship Council (FSC).

AVONPAPER

PROMISE

http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/reforestation/#paper-promise

https://us.fsc.org/


AVON PALM OIL PROMISEThe rapid expansion in the production of palm oil has resulted in destruction of large areas of tropical forests and peatlands. Although more than 80 percent of palm oil is used in food, it is also one of the natural oils used in cosmetics and personal care products.

Avon is not a significant user of palm oil; however, we recognize the impact palm oil production has on deforestation. In March 2011, we adopted the Avon Palm Oil Promise, which outlines Avon’s guidelines for purchasingsustainably sourced palm oil. Additionally, we are a member of the Roundtable on Sustainable Palm Oil (RSPO)—a group that promotes the growth and use of sustainable palm oil.

Through the Palm Oil Promise, we support the production of sustainable palm oil through the GreenPalm program. For every estimated ton of palm oil derivative we use in the production of our products, we have paid a voluntary premium to a palm oil producer that is operating within the RSPO guidelines for social and environmental responsibility.

In 2013, Avon supported the production of 18,400 metric tons of sustainable palm oil production through the GreenPalm program.

Read the full Avon Palm Oil Promise on avoncompany.com.

HEALTHY FORESTS, BEAUTIFUL WORLDHealthy Forests, Beautiful World, Avon’s reforestation fundraising initiative, empowers us all to be a part of a global movement to help end deforestation—a crisis that endangers the health and well-being of our society and our environment. The initiative was launched in 2010 as Hello Green Tomorrow, and renamed Healthy Forests, Beautiful World in 2014.

With more than six million Avon Independent Sales Representatives (“Representatives”) around the world as of December 31, 2013, Avon has a unique capacity to engage and mobilize people to help end deforestation. Healthy Forests, Beautiful World raises funds through the sale of special, environmentally conscious fundraising products in more than 50 countries by Representatives and online at Avon eCommerce sites.

Through the end of 2013, Avon raised more than $6.8 million, including $1.3 million in 2013, to support the reforestation projects of partner organizations, The Nature Conservancy (TNC) and World Wildlife Fund (WWF), in Brazil and Indonesia, two of the most critically endangered ecosystems.

Read more about Healthy Forests, Beautiful World on avoncompany.com.


AVONPALM OIL PROMISE

http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/reforestation/#palm-oil-promise

http://www.rspo.org/

http://www.rspo.org/

http://greenpalm.org/


http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/reforestation/healthy-forests

Avon

Philanthropy

As the “company for women,” Avon has a unique ability to educate and mobilize people worldwide on issues that are of vital importance to women. By combining the power of the individual and the collective power of our worldwide network of Avon Independent Sales Representatives (“Representatives”) into one powerful philanthropic force, together Avon and the Avon Foundation for Women—a U.S.-based 501(c)(3) public charity—make us a global leader in philanthropy.

We are proud to be the leading corporate supporter of the breast cancer cause globally through the Avon Breast Cancer Crusade and a leading corporate supporter of ending violence against women through the Speak Out Against Domestic Violence initiative.

Through the end of 2013, Avon global philanthropy donated more than $957 million through programs in over 50 countries for causes most important to women.


By 2015, our goal is to donate $1 billion in total funds, and we are well on our way to reaching that goal.

http://www.avonfoundation.org/causes/breast-cancer-crusade/

http://www.avonfoundation.org/causes/domestic-violence/



The U.S.-based Avon Products Foundation, Inc., referred to as the Avon Foundation for Women (“Avon Foundation”), leads Avon’s global philanthropy program. All local fundraising and grant programs are conducted by Avon’s individual country markets.

Since its inception in 1955, the Avon Foundation’s fundamental mission has been to promote or aid charitable, scientific, educational, and humanitarian activities, with a special emphasis on programs that improve the lives of women and their families.

Read more about the Avon Foundation’s mission on the Avon Foundation website.

AVON FOUNDATION FUNDRAISINGThe Avon Foundation raises funds in the United States for breast cancer and domestic violence programs through special Avon products sold by Representatives, with a percentage of net proceeds donated to the Avon Foundation. The Avon Walk for Breast Cancer series, which attracts tens of thousands of participants each year, raises substantial funding from the public.

In addition, Avon provides in-kind and financial support to the operations of the Avon Foundation. Detailed financial reports showing Avon’s donations to the Avon Foundation, funds raised, grants awarded and more details, can be found on the Avon Foundation financials page.

AVON FOUNDATION GRANTSThe Avon Foundation awards breast cancer and domestic violence grants through a competitive application process guided by external experts on respective advisory boards, the Avon Foundation Breast Cancer Advisory Board and the Avon Foundation Domestic Violence Advisory Board. The Avon Foundation also awards grants through our Healthy Forests, Beautiful World program to support reforestation projects in endangered ecosystems. Read more about HealthyForests, Beautiful World in the Environmental Sustainability section of this report.

Strategic guidance for the Avon Foundation, fiduciary responsibility and final decisions on grant making are among the responsibilities of the Avon Foundation Board of Directors.

In 2013, the Avon Foundation:• Awarded more than $20 million for grants and programs to advance breast

cancer research and access to care programs and $5.8 million for grants and programs to fund domestic violence education, direct service and prevention programs.

• Made 156 grants for U.S. breast cancer programs through the Avon Foundation Breast Cancer Crusade, of which 63 percent went to access to patient service and care programs and 37 percent went to research.

• Funded 138 projects through the Avon Speak Out Against Domestic Violence initiative aimed at ending domestic violence or supporting victims in 36 states, Puerto Rico and the Dominican Republic, totaling $5.8 million.

AVON FOUNDATION FOR WOMEN


http://www.avonfoundation.org/causes/mission.html

https://www.avon.com/category/causes

http://www.avonwalk.org/


http://www.avonfoundation.org/foundation/financials/

http://www.avonfoundation.org/grants/

http://www.avonfoundation.org/foundation/breast-cancer-advisory-board/

http://www.avonfoundation.org/foundation/domestic-violence-advisory-board/

http://www.avonfoundation.org/foundation/contact-us/

http://www.avonfoundation.org/foundation/contact-us/


• Awarded a total of $1.47 million to The Nature Conservancy (TNC) and World Wildlife Fund (WWF) through the Healthy Forests, Beautiful World program to fund reforestation efforts in Brazil’s Atlantic Rainforest and Indonesia’s tropical forests.

AVON MATCHING GIFTS PROGRAM Avon is proud to encourage the personal philanthropy of Avon Associates. In the United States, through the Avon Foundation U.S. Associate MatchingGifts Program, the company matches donations made from all full-time U.S.-based Associates to a wide range of causes and programs. The Avon Foundation matches minimum contributions of $25, up to a maximum of $15,000, perAssociate and per calendar year, to eligible 501(c)(3) organizations. Each calendar year, the Avon Foundation will provide a 2:1 match to charities up to a maximum of $500, and a 1:1 match for all pledges exceeding $500, up to a maximum of $15,000.


http://www.avonfoundation.org/resources/for-avon-associates/

http://www.avonfoundation.org/resources/for-avon-associates/


The Avon Breast Cancer Crusade, which launched in 1992, has placed Avon and the Avon Foundation at the forefront of the fight against breast cancer. Today, Avon is the leading corporate supporter of the cause globally. Many of our Representatives around the world raise funds for breast cancer programs and also provide a global army of educators, offering information and raising awareness around the world.

The Avon Breast Cancer Crusade awards funding to beneficiaries ranging from leading cancer centers to community-based, grassroots breast health programs to support breast cancer research and access to care. Avon funding has helped build a network of programs globally that cover the full spectrum of the breast cancer access to care and research. We fund promising research into the causes of breast cancer and ways to prevent the disease, and fund access to screening and treatment, with a special focus on helping the medically underserved, including the disadvantaged, elderly, minorities and those without adequate insurance.

AVON BREAST CANCER CRUSADE FUNDRAISING Avon and the Avon Foundation raise funds globally for the Crusade through the sale of special fundraising products and through fundraising events such as the U.S. Avon Walk for Breast Cancer series and the Avon Walk Around the World for Breast Cancer series.

AVON BREAST CANCER CRUSADE

Avon global philanthropy has donated more than $815 million through 2013 for breast cancer programs in over 50 countries for research and advancing access to care, regardless of a person’s ability to pay.

Globally, the Crusade has enabled more than 18 million women to receive free mammograms and breast cancer screenings, and educated more than 145 million women about breast cancer, helping improve rates of early detection and survival.



AVON BREAST CANCER CRUSADE PINK RIBBON FUNDRAISING PRODUCTSRepresentatives around the world sell specially designed and affordably priced “Pink Ribbon” products that provide the opportunity for anyone to participate in the fight against breast cancer. Avon and the Avon Foundation award a portion of the proceeds to organizations and institutions to help eradicate breast cancer, with grants made within the country in which the funds are raised.


Through 2013, global sales of Avon Breast Cancer Crusade pink ribbon fundraising products totaled $321 million.

U.S. AVON WALK FOR BREAST CANCER The U.S. Avon Walk for Breast Cancer series is the Avon Foundation’s largest annual fundraising initiative and takes place in eight cities annually from April to October. Avon Walk participants have the choice of walking a marathon (26.2 miles) or a marathon-and-a-half (39.3 miles) over two days. Each walker must raise a minimum of $1,800 to participate, funds that the Avon Foundation distributes to local, regional and national breast cancer organizations.

During the closing ceremony of each Avon Walk, the Avon Foundation awards a portion of the funds raised to local beneficiaries to ensure the funds immediately benefit the community. The Avon Foundation awards additional funds raised throughout the year to provide leadership support nationally for the fight against breast cancer.

Since its launch in 2003, the Avon Walk series has raised more than $500 million through the dedication of more than 192,000 participants.

https://www.avon.com/category/causes



AVON WALK AROUND THE WORLD FOR BREAST CANCER The Walk Around the World for Breast Cancer series brings together hundreds of thousands of people in more than 50 countries around the world to raise money and build awareness of breast cancer. The funds are awarded in the local country to address critical needs, from mammography equipment to cutting-edge research and patient care. In many countries, the Avon Walks bring together many generations and break cultural and social barriers that previously stood as obstacles to women and men taking a public stand against breast cancer.

AVON BREAST CANCER IMPACT The hundreds of Avon Breast Cancer Crusade 2013 grant recipients in theUnited States and around the world include a wide range of organizations and institutions, including local nonprofit breast cancer programs and leading cancer centers that drive research and patient care.

As of the end of 2013, Avon Walk around the World for Breast Cancer events have raised more than $16 million through the support of more than two million participants.


ACCESS TO CARE PROGRAMSAvon funds access to screening and treatment, with a special focus on helping the medically underserved, including the disadvantaged, elderly, minorities and those without adequate insurance.

Avon and the Avon Foundation continue to lead efforts to end disparities and improve access to breast health care. A few examples of these efforts include:

• Through 2013, the seven Avon Comprehensive Breast Care Centers of Excellence at major U.S. academic medical centers received a combined $148 million from the Avon Foundation. In addition, our markets in Brazil and the Philippines have created comprehensive breast cancer care centers at leading medical centers. Avon grants enable these centers to develop new programs to reach and treat the poor in their communities. In the United States, annual Avon Foundation grants to these centers also support their research efforts, with an emphasis on including underserved and minority populations in breast cancer research.

http://www.avonfoundation.org/fundraising/walk-around-the-world/

http://www.avonfoundation.org/assets/2013-affw-approved-grants.pdf

http://www.avonfoundation.org/assets/2013-affw-approved-grants.pdf


• Through the Avon Breast Health Outreach Program (BHOP), the Avon Foundation has awarded more than 1,600 grants to community-based organizations across the United States, totaling $76.2 million since 2000. Avon’s BHOP links at least 100,000 women annually to quality screening and funds more than 50 community health educators to connect underserved women and men to early detection programs and risk reduction strategies.

• The U.S. Avon Safety Net Program has awarded 660 grants through the end of 2013, totaling $220 million, to a network of more than 177 hospitals across the country. The goal of the program is to help women and men who might fall through the cracks of the healthcare system gain access to quality breast cancer services. In 2013, Avon Foundation-funded patient navigation programs provided patients with nearly 400,000 educational contacts, enabled access to nearly 250,000 mammograms and navigated nearly 14,000 medically underserved women and men diagnosed with breast cancer.

BREAST CANCER RESEARCH FUNDINGThe Avon Foundation has donated more than $200 million for breast cancer research in the United States.

The Avon Foundation supports breast cancer research through grant funding, as well as by providing scientific coordination and fostering collaboration between its funded programs. Current research priorities are aimed at:

• understanding the causes of breast cancer

• targeting the primary prevention of breast cancer

• developing new treatments for under-investigated areas of research, such as metastatic breast cancer and rare, aggressive types of the disease (inflammatory breast cancer, triple negative breast cancer and metastatic breast cancer)

The Avon Foundation launched and leads several collaborative research efforts, including the Virus & Breast Cancer Research Consortium, a new diagnostics tests/devices development initiative, and the Parity and Breast Cancer Risk research program. The Avon Foundation requires and facilitates collaboration among funded beneficiaries to help advance the effectiveness of all programs.

The Avon Foundation has long provided significant funding for environmental research related to breast cancer, including:

• $1.5 million since 2004 to the National Institutes of Health/National Institute of Environmental Health Sciences in Research Triangle Park, N.C., to support the Breast Cancer and the Environment Research Centers and adjunct studies to The Sister Study.

• $1.5 million since 2004 to Silent Spring Institute in Massachusetts to support its efforts to identify and change the links between the environment and women’s health, especially breast cancer.

• The Avon Foundation also funds patient access to care and non-environmental specific research programs at a number of organizations that are active in the exploration of environmental factors in breast cancer, such as the National Cancer Institute, Centers for Disease Control, the University of Massachusetts Amherst, and the University of California San Francisco. These organizations update the Foundation on new areas of environmental exploration, and issues and concerns in this field for future funding consideration.


http://avonbhop.org/

http://www.avonfoundation.org/causes/breast-cancer-crusade/virus-consortium/


COLLABORATING AND CONVENINGThe Avon Foundation is helping lead and coordinate ongoing collaborations with key cancer organizations and annually convenes experts from its own funded organizations. These events foster innovation, share best practices in the areas of breast cancer research, prevention strategies and patient services, and emphasize our unique collaborative approach to grant making. Avon Foundation Breast Cancer Forums and Summits alternate each year between convening representatives from community-based programs that provide outreach, education and early detection, and those from cancer centers engaged in scientific research and treatment.

A few examples from 2013 include:

• Led and coordinated the Metastatic Breast Cancer Alliance (MBCA), which launched in 2013 and comprises 23 breast cancer advocate organizations and six pharmaceutical partners that have joined forces with the vision of transforming and improving the lives of women and men living with metastatic breast cancer. The Avon Foundation has dedicated staff time and resources to lead the MBCA’s effort to conduct a comprehensive analysis of metastatic breast cancer research and patient information and resources. The findings were issued in October 2014 and new programs will be funded to address the challenges identified.

• Partnered with the National Cancer Institute (NCI) and the Center for Advancing Innovation to launch the first-of-its-kind Breast Cancer Start-up Challenge to link clinically interesting research-identified breast cancer inventions with business school and industry experts who would develop business plans to launch those inventions. Forty-six teams entered the contest, and the best business plan was selected for each of the 10 breast cancer test or treatment inventions. Teams are working to raise capital to launch new start-ups to further develop, and potentially commercialize, the inventions to provide promising research results to patients faster. The Breast Cancer Start-up Challenge winners will be announced in 2014.

• Conducted the second Racial Disparity in Breast Cancer Mortality study in conjunction with the Sinai Urban Health Institute. The study, funded in 2013 and released in 2014, found a black:white disparity in breast cancer mortality in 39 of the most populous U.S. cities, with 35 of those cities experiencing a widening disparity over a 20-year period from 1990 to 2009. This study expanded on a 2012 study that examined the racial disparity in breast cancer mortality over a three-year period (2005-2007) in the 24 largest U.S. cities.

• Issued a call for applicants for our second class of Avon Global Breast Cancer Clinical Scholars Program. The program trains breast cancer specialists living outside the United States at 12 leading Avon Foundation-funded U.S. breast cancer centers. The goal of the program is to provide advanced training to doctors so they can bring new skills and information to their home countries that will improve the treatment and care of breast cancer patients. The inaugural program brought 25 physicians—including 21 from Avon markets—to the United States in 2012. The second class, comprising 23 physicians from 14 countries, completed its studies in June 2014. Both classes of Scholars have since returned home to share their learnings and improve breast cancer detection and treatment in their countries.


http://www.avonfoundation.org/causes/breast-cancer-crusade/mbc/mbc-alliance/

http://www.avonfoundation.org/assets/images/2014/mbca_full-report.pdf

http://www.avonfoundation.org/press-room/avon-foundation-for-women-nih-and-the-center-for-advancing-innovation-launch-start-up-challenge-to-advance-breast-cancer-biomedical-inventions.html%23.VIXjbYdjAnV

http://www.avonfoundation.org/press-room/study-reveals-widening-racial-disparity-in-breast-cancer-mortality-in-35-u-s-cities.html

http://www.avonfoundation.org/causes/breast-cancer-crusade/global-scholars/

http://www.avonfoundation.org/causes/breast-cancer-crusade/global-scholars/



EDUCATION AND AWARENESSTime and again, we have proven that we can mobilize the Avon community to ignite grassroots activism on a global scale.

Harnessing this unique capability, we have led breast cancer awareness programs around the world. A few examples from 2013 include:

• Brazil: We engaged Representatives in more than 800 mobilization efforts across the country, including many public activities educating women about the importance of early detection. These events culminated with the first giant pink Ferris wheel set up as the main attraction at an awareness event near a large shopping center in Sao Paulo, during which Avon distributed 1.5 million breast self-exam kits over 10 days.

• Colombia: World famous soccer player Carlos “El Pibe” Valderrama joined the Avon Breast Cancer Crusade by painting his well-known hair pink and drawing media coverage across Latin America and Europe in advance of the annual Avon Walk in Bogota. Avon Colombia also created a mobile application, “El Pibe Rosa App,” so people could “paint” their hair pink and post it to social media to raise awareness about breast cancer.

• Czech Republic: For the annual Avon Walk in Prague, 18,500 participants filled the streets in pink, raising more than $300,000 for breast cancer prevention and awareness. Additionally, 24 smaller local events engaging Representatives took place throughout the Czech Republic. Funds raised supported educational and screening programs as well as a helpline and other support programs for breast cancer patients.

• Malaysia: Avon collaborated with the National Population and Family Development Board and MYDIN Mall to provide free clinical breast health checks to 6,140 women nationwide using six clinical buses.


AVON SPEAK OUT AGAINST DOMESTIC VIOLENCE

Avon is dedicated to the empowerment of women globally, and ending violence against women is a cause that is integral to our philanthropy. Avon’s Speak Out Against Domestic Violence initiative focuses on education, prevention and victim support programs. Today, nearly 50 Avon markets around the world raise funds and awareness to support programs aimed at ending family and gender violence.

SPEAK OUT & EMPOWERMENT FUNDRAISING PRODUCTSAvon raises funds and educates people through the sale of unique Avon Speak Out Against Domestic Violence Empowerment fundraising products, which have raised $37 million through the end of 2013. These products include jewelry that feature the infinity symbol, representing unlimited possibilities for all women once they are free from violence. The Avon mark. brand also offers special m.powerment fundraising products that support efforts to end dating and partner violence.

Through 2013, the Avon Speak Out Against Domestic Violence initiative has donated nearly $58 million globally.




http://www.avon.com/category/causes/empowerment

https://www.avon.com/category/mark/m-powerment

https://www.avon.com/category/mark/m-powerment


AVON DOMESTIC VIOLENCE IMPACT Avon and the Avon Foundation fund efforts to build awareness, to educate and to develop and implement prevention and direct service programs. We also support leading global programs to end gender violence and support the creation and implementation of laws to end violence against women.

U.S. DOMESTIC VIOLENCE FUNDINGExamples of domestic violence initiatives the Avon Foundation funded in the United States in 2013 include:

• Created and funded a $500,000 grant program—See the Signs & Speak Out: How Bystanders Can Help—which builds on the NO MORE study. The Foundation selected three agencies to receive grants to create bystander training materials, including websites, webinars, social media and other outreach materials to help bystanders safely intervene when abuse is suspected or observed. These free materials, available in November 2014, will be distributed to workplace and other community settings in order to reach large numbers of people to help them recognize the signs of abuse, respond, and refer victims and their families to resources, and to get people talking about these issues.

• Continued its annual Avon Regional Domestic Violence grants program to support dozens of agencies across the United States with small general operating grants for local direct service and life-saving support programs in communities and regions where Avon has business locations. The Foundation awarded 64 of these grants totaling $500,000 in 2013.

• Awarded the Jeanne Geiger Crisis Center a $500,000 grant to expand its comprehensive research-based Domestic Violence High Risk Team Model (DVHRT). DVHRT focuses equally on offender accountability and victim safety, can be widely replicated, and is accepted by both law enforcement and domestic violence advocates. With new Avon funding, JGCC will improve DVHRT effectiveness by building a Web-based Learning and Resource Center, a cost-effective and efficient way to teach communities the basics of DVHRT and to onboard new DVHRT members; and introduce a DVHRT Certification Process to ensure proper replication through a thoughtful review of the policies, protocols and practices of the team once it has been operational for one full year.

• Provided significant additional funding to domestic violence agencies with projects that demonstrated the potential to be replicated as national or global models. Highlights of these funded programs include support of: The National Domestic Violence Hotline for advocate phone and digital online support; the National Network to End Domestic Violence for the Annual DV Shelter & Services Survey; the David Lynch Foundation for therapeutic and restorative mediation practices for victims, their families and advocate practitioners; Santa Clara College to develop and disseminate a campus sexual assault prevention and awareness video; and Cornell University Law School for the Avon Global Center for Women & Justice, which convenes judges from across the globe at an annual conference, catalogs gender-violence case law to expedite global use, and provides clinical support for global judicial projects.



GLOBAL EFFORTS TO END VIOLENCE AGAINST WOMENExamples of global programs we funded in 2013 include:

• Announced the 2013 Avon Communication Awards: Speaking Out About Violence Against Women as one feature of Avon’s 2013 International Women’s Day celebration. The awards honored five non-governmental organizations from Pakistan, Tanzania, Nepal, Peru, and Ukraine, for their outstanding work to bring attention to the need to end violence against women and awarded each with a grant to continue their work. Avon Foundation Global Ambassador Salma Hayek Pinault and Avon CEO Sheri McCoy announced the winners at the United Nations Headquarters during the 57th session of the Commission on the Status of Women.

• Expanded the Global Partnership to End Violence Against Women, a collaboration among the Avon Foundation, Vital Voices and the U.S. Department of State that launched in 2010. In 2013, Avon funded a new Global Partnership initiative that launched in 2014: Ensuring Laws Achieve Their Promise: The Justice Institute on Gender Violence. In 2014 and 2015, the Justice Institute will work with criminal justice professionals and service providers in India, Mexico, Nepal, South Africa and other countries to develop and provide training that promotes a victim-centered approach to holding offenders accountable for their crimes.

• Launched the #SeeTheSigns of Domestic Violence global social media campaign on November 25, 2013 to address the issue of domestic abuse during the 16 Days of Activism Against Gender Violence, an international human rights-based movement against gender violence. The campaign focused on engaging women and men across the globe about the subtle signs of abuse, educating them about the important role they play in recognizing the signs among their friends and family, and encouraging them to help break the cycle of violence by starting conversations about the issue. United by the hashtag #SeeTheSigns, the campaign featured powerful graphics on Avon’s social channels in 27 countries throughout each of the 16 Days of Activism. In Argentina, Fundación Avon dressed Buenos Aires’ iconic monument, “El Obelisco,” in the center of the city, reaching 400,000 people on the first day of the campaign alone.


http://www.avonfoundation.org/causes/domestic-violence/funding/avon-communication-awards/2013/

http://www.avonfoundation.org/causes/domestic-violence/funding/avon-communication-awards/2013/

http://www.avonfoundation.org/causes/domestic-violence/funding/global-partnership/

http://www.avonfoundation.org/press-room/vital-voices-global-partnership-the-avon-foundation-for-women-with-avon-foundation-global-ambassador-fergie-and-the-u-s-department-of-state-launch-new-initiative.html

http://www.avonfoundation.org/press-room/vital-voices-global-partnership-the-avon-foundation-for-women-with-avon-foundation-global-ambassador-fergie-and-the-u-s-department-of-state-launch-new-initiative.html

http://www.avonfoundation.org/causes/domestic-violence/seethesigns/%23.VIXlwIdjAnU

http://www.avonfoundation.org/causes/domestic-violence/seethesigns/%23.VIXlwIdjAnU

Avon is committed to our Associates around the world. We provide our employees—whether they are located in urban headquarters or in rural manufacturing facilities—with safe and healthy workplaces, competitive benefits, as well as opportunities to engage with management and peers.

For our six million Avon Independent Sales Representatives (“Representatives”), Avon provides an opportunity for women around the world to support themselves as independent entrepreneurs. For many women, the Representative earnings opportunity enables Representatives to support themselves and their families. It helps put food on the table and provide other necessities and, sometimes, a few luxuries.

OurPeople



SUPPORTING OUR PEOPLE

HEALTH AND SAFETY Avon believes that focusing on healthier employees contributes to a stronger company and creates a culture of wellness. We provide a range of benefits and services designed to protect and support our employees’ safety and well-being, such as flexible spending accounts, childcare support, employee assistance programs, flex time and retirement plans.

Additionally, we have developed and implemented a global safety strategy including six dimensions that focuses on: increasing management involvement, strengthening basic safety, setting goals and measuring performance, communicating and increasing awareness, increasing safety and health competence, and establishing global standards.

ASSOCIATE ENGAGEMENT AND TRAINING

Avon understands the importance of employee engagement as a driver of job satisfaction, retention and company success. We work diligently to engage our Associates around the world and provide avenues for feedback through our culture surveys, education on core leadership behaviors, career paths, and business knowledge, and events hosted by our leadership team.

ASSOCIATE CULTURE SURVEY In 2013, Avon conducted a confidential culture survey that provided Associates an opportunity to candidly share feedback about their experiences at Avon. The survey was designed to help us measure key aspects of our culture, understand what is working well, identify areas for improvement, and measure engagement.

Eighty-four percent of Avon Associates participated in the 2013 culture survey, surpassing Tower Watson’s average by eight percent. The survey achieved an 83 percent culture score, which is three percent higher than the consumer packaged goods industry standard.

Results were reported by country and by department across markets to give both geographic and functional insight. Senior leaders reviewed survey results with their teams and developed and implemented action plans to address matters that surfaced through the survey.

Avon will continue to conduct the survey bi-annually, with midterm surveys in interim years of a random sampling of Associates on select questions to assess how we are progressing on key elements of our culture.



TRAINING & DEVELOPMENT Avon offers functional training based on core curricula—with a special focus on the key commercial areas, such as sales and marketing—to build a strong foundation for individual and company success, and to ensure our Associates are meeting the demands of the changing labor market.

At the individual level, Associates participate in mid-year and annual performance reviews that focus on sharing career aspirations, outlining performance and development goals, providing relevant feedback, and establishing action plans.

In 2013, Avon initiated a broad assessment and re-launch of our training and development processes, which included:

• A more robust performance management process across the entire company.

• A redesigned talent review process and toolkit to provide more objective assessments and facilitate more dynamic discussions involving the senior manager role and above throughout Avon.

• Assessing our learning initiatives to develop a future plan for cost-effective training for all Associate levels.

As a result, in 2013 we offered training initiatives to Associates in select regions and functions that focused on necessary skills that affect the business. Trainings such as an “Immersion Series” of workshops and webinars on the fundamentals of the business educated Associates on direct selling, commercial marketing, supply chain and finance basics. We also provided global trainings to develop core skill sets, offered to all Associates in the regions where we operate. We began development of a learning portal, a dynamic intranet site with social media capability that will serve as the central location for company-wide learning resources. The portal will be rolled out in phases, beginning in 2014, and is expected to also handle classroom, webinar, and e-learning delivery.

Avon also provides tuition reimbursement to U.S. Associates who are pursuing an undergraduate or graduate degree in a job-related field or in a field that has been approved by the Associate’s manager and human resources.

LEADERSHIP/ASSOCIATE ENGAGEMENT AND EVENTS We host events that connect senior management with Associates for the purposes of delivering updates on local and global news, eliciting Associate feedback and facilitating cross-functional dialogue. These events include quarterly “town hall” meetings held by functional and regional leaders and an annual global town hall with Avon CEO Sheri McCoy. McCoy and other members of the Executive Committee convene select groups of Associates across all levels for “Chats” and “Stand-up Meetings” during market visits to gain insights firsthand from Associates. Avon has a global Intranet site that is available to all Associates, as well as market Intranet sites with information relevant to local Associates, including written and video messages from senior leaders.

Read more about how we support our people on avoncompany.com.


http://www.avoncompany.com/corporate-responsibility/people/supporting-our-people



DIVERSITY & INCLUSIONAvon is committed to maintaining a global culture that fully respects and values the strengths and differences of all Associates. Our goal is to foster a work environment in which everyone feels engaged and understood—a place where all have the opportunity to share points of view, offer ideas, and be recognized for their contributions.

We define diversity as the unique collection of qualities, perspectives, talents and skills that individuals are born with and acquire through life’s experiences and choices. Inclusion involves actively embracing diversity, ensuring each person feels comfortable and encouraged to bring his or her “whole self” to work.

As a global company, we are committed to attracting, developing, and leveraging diversity of thought, background, and experience to fuel our “One Team, One Avon” culture. Our rich heritage of empowering women and commitment to being “the company for women” drives our approach to inclusion.

Avon’s Global Inclusion Office (GIO) serves as a center of excellence to oversee all aspects of diversity and inclusion across the company. The GIO focuses on four key areas to effectively support Avon’s business priorities: Marketplace, leveraging Avon’s rich diversity as a business accelerator; Workplace, creating an environment in which all Associates feel understood, valued and engaged; Talent, attracting, developing and retaining talent inclusively, enabling all to thrive; and Community, elevating Avon’s reputation as a brand, company and employer in diverse communities.

In 2013:

• Women comprised 60 percent of the total Avon workforce, 70 percent of managers, and 40 percent of senior leaders.

• Of our worldwide workforce, women held 36 percent of vice president and above positions and 46 percent of executive director and director roles.

• In the United States, 29 percent of our total workforce was composed of people of color; 21 percent in positions of director and above were people of color.

• People of color comprised 30 percent of the Avon Board of Directors, while women comprised 60 percent.

We continue to aspire to be “the company for women” in all markets where we operate. From working conditions, to career opportunities, to pay equity, we strive to be the preeminent employer for women.

In 2013, we conducted an Inclusion Dialogue and Planning Series (IDPS) to facilitate discussions with diverse segments of Associates and explore topics related to identity in the workplace. Participants proposed multi-level inclusion action plans for themselves, our Associate Resource Groups (ARGs), their managers and our Executive Committee. The IDPS aimed to build more confident communities of diverse Associates and stimulate greater advocacy and sponsorship.

Recognition of Avon’s diversity effortsIn 2013, we received a perfect score of 100 percent on the Human Rights Campaign’s Corporate Equality Index and were recognized by Work Life Matters Magazine as a Top Company for LGBT Equality.



WOMEN IN LEADERSHIP

In 2013, women held five positions on Avon’s Executive Committee: chief executive officer, chief financial officer, chief marketing officer, chief human resources officer, and chief communications officer. In addition, in 2013, Avon’s chief scientific officer was a woman. Women also maintain leadership positions within Avon’s functional and geographic operations around the world.

For example, in 2013 women were responsible for leading Avon businesses in Georgia, Germany, Kazakhstan, Kyrgyzstan, Malaysia, Philippines, Taiwan, the Slavic countries, Poland, Russia, Turkey, Ukraine, and the United Kingdom.

ASSOCIATE RESOURCE GROUPS Our Associate Resource Groups (ARGs) are voluntary groups led by Associates and sponsored by the company. Groups are typically organized around a common background, interest or demographic, but they are open to all Associates. Each ARG has a stated mission, leadership structure and annual action plan aligned with GIO strategy and the company’s broader business goals.

With the launch of three women’s ARGs—all called Avon Women Empowered (AWE)—in the greater NYC area in 2013, we now have seven ARGs in the United States, including: The Asian Network, Black Professionals Association (BPA), AHORA Latino Network and PRIDE Network (Lesbian, Gay, Bisexual, Transgender). Participation of Associates in the ARG program has more than doubled over the past two years.

Examples of events hosted by ARGs in 2013 included community outreach efforts supporting health and domestic violence issues, minority career fair recruiting, Avon product sampling at diverse community events, career talks at local scouting troops and educational institutions, and talent development and career path programs for ARG members.

In 2013, we introduced the GIO Awards, which recognize ARG excellence and the considerable contributions ARGs have made to Avon in each of the GIO action areas – Marketplace, Workplace, Talent and Community.

Read more about Diversity & Inclusion on avoncompany.com.

http://www.avoncompany.com/corporate-responsibility/people/diversity-inclusion



EMPOWERING WOMEN TO ACHIEVEFor many women, the Avon Independent Sales Representative earnings opportunity is a lifeline, an opportunity to support themselves and their families. It helps put food on the table and provide other necessities and, sometimes, a few luxuries.

Our six million Representatives around the world are in business for themselves, but they are not by themselves. Our field management, as well as other Representatives, provide mentoring, training and support.

The Representative earnings opportunity offers another benefit: a flexible alternative to traditional employment, without set hours and a set workplace. Whether in Moscow or Kansas City or Sao Paolo, women worldwide leverage this flexibility to drive their Avon businesses in the context of other responsibilities—the ultimate work-life balance.

EARNINGS OPPORTUNITYAvon wants our Representatives to succeed by offering a no-barrier earningsopportunity to support themselves and their families. We support each Representative in her efforts to achieve success and empower her to be self-sufficient by earning an income. The company’s direct-selling model offers a low cost of entry, a wide range of training and development opportunities, management support, and digital direct selling tools that enable Representatives to manage and grow their businesses as never before.

All it takes to become a Representative and launch a business is the nominal cost of an appointment fee. These fees vary for each country according to the local economic standards in the more than 100 countries in which Avon operates. For example, in the United States, the appointment fee can be as low as $15.00, and in the Philippines, it is equivalent to U.S. $1.50.

Once appointed, a Representative has flexibility over her schedule and is her own boss, setting the parameters and goals for her business. Depending upon the level of sales, a Representative’s earnings generally can range up to to 50 percent, providing greater incentive and earnings to those who are committed to personal success.

http://avoncompany.com/earningsopportunity/index.html

http://avoncompany.com/earningsopportunity/index.html



EMPOWERING DIGITALLYConnectivity and community have always been critical to Avon’s direct-selling model.

We meld face-to-face contact with virtual interaction and are constantly integrating new technologies in the way people connect, communicate, share and shop. Our digital strategy is designed to enhance the social selling experience for Representatives and the shopping experience for consumers. By innovating the direct-selling sales channel, we continue to help Representatives succeed and thrive through “social selling,” a complement to traditional face-to-face selling.

Avon offers many digital tools—on the Internet, social media and mobile technology—that enhance our Representatives’ reach, productivity, and earnings. Representatives businesses can integrate seamlessly with the way people today connect, share and shop, and create communities, through our new multi-channel selling tools such as:

• Customized social media environments for Representatives to reach customers and other Representatives. Globally in 2013, Avon had 15,075,773 social fans, followers and subscribers and 257 corporate social profiles and accounts, reaching a combined two million followers and fans.

• Avon-branded networking sites for Representatives, their customers, sales leaders and all empowered women like Avon Connects in the U.K. and Romania. These sites enable users to interact to share their love of beauty, as well as connect with each other. Representatives also receive peer-to-peer support on the sites.

• A Virtual Makeover Tool on the U.S. e-commerce site, as well as a mobile version, that enables customers to try on products virtually before purchasing.

https://www.facebook.com/Avon

http://www.avonbeautyconnects.co.uk/

http://www.avonconnects.com.ro/index.jspa

https://www.avon.com/virtualmakeover

Production &

Supply Chain

Avon is committed to carefully managing the development, testing and manufacturing of our products at both company-owned manufacturing facilities and third-party manufacturers around the world. Universal standards apply to all Avon beauty products regardless of where they are manufactured or marketed, ensuring consumers worldwide receive the same product quality, safety and efficacy. Avon also is committed to the health and safety of our supply chain and we require our third-party manufacturers to act responsibly and ensure safe workplaces.



Avon uses both company-owned manufacturing facilities and third-party manufacturers to produce our products around the world. In 2013, beauty products comprised 73 percent of Avon’s business, including cosmetics, fragrances and toiletries (CFT). We manufacture and package the majority of our beauty products in Avon-owned facilities and we work closely with our third-party manufacturers to supply the remaining.

Our fashion and home products, including fashion jewelry, watches, apparel, footwear, accessories, housewares, gift and decorative products, children’s products, entertainment and leisure products, and nutritional products, represented approximately 27 percent of Avon’s total sales in 2013. These products are sourced through third-party manufacturers in 39 countries across five continents.

SAFETY PERFORMANCE

Avon has a robust global safety and quality assurance policy and process specifically for its products, including stringent standards for raw materials.

Fashion and home products must comply with all local regulations and all internal safety requirements prior to production approval. We also have an additional layer of guidelines for products that are intended for, or may be attractive to, children.

We are committed to the health and safety of our Associates and supply chain across Avon-owned global manufacturing plants and distribution centers.

PRODUCT SAFETY & INTEGRITY Avon is committed to offering safe and effective products around the world, and we are proud of our more than 125-year safety record. We have the same universal standards of quality and safety worldwide and are fully compliant with all regulations established by government agencies that oversee beauty and personal care product ingredients and safety. Consumers can be assured that any cosmetic or personal care product that carries the Avon name has undergone a thorough safety evaluation and can be used with the utmost confidence.

We conduct rigorous tests throughout our research and product development process to ensure the safety and quality of our ingredients and products. While we comply with regulatory requirements in the more than 100 countries where we maintain operations and continuously monitor products for safety, we maintain a single Global Product Safety Standard for the nearly 1,000 beauty products developed in our labs every year.

PRODUCTION

Avon Global Product Safety Standard: The safety of every beauty product must be substantiated prior to product introduction. We are vigilant in monitoring thesafety of our beauty products in the hands of consumers. We will remove any ingredient from our cosmetic products should new evidence emerge that would nolonger support its safe use.



If we determine through scientific inquiry that an ingredient can no longer be considered to be used safely, or if ever prohibited by law, we will discontinue its use. We also take into account consumer preference and provide formulation options when safe and effective alternatives are available.

A few examples include:

• Because some consumers have a preference for products without parabens, starting in 2002, we began eliminating parabens from some Avon products where there are safe alternatives. Today, many of our products are paraben-free, including lip products, women’s body care products, antiperspirants and deodorants, and children’s products.

• Prior to 2004, we used dibutyl phthalate (DBP) in some of our nail polish product formulations. Following a 2004 change in European Union (EU) regulatory requirements, we removed DBP from all of its beauty products, including those nail polishes that contained it, even though the ingredient was banned only in the EU and the action in the EU was not based on an assessment specific to cosmetic products safety.

• Although diethyl phthalate (DEP) has been extensively studied and evidence supports its safe use in cosmetic products, we announced in 2005 that we would no longer use DEP in the development of new Avon fragrances as an effort to address consumer concern.

• We made a decision to phase out triclosan from Avon cosmetic and personal care products. Although scientific evidence supports the safe use of triclosan in consumer products, we have made this decision based on the preferences expressed by some of our customers for products without triclosan. We are no longer using triclosan in new product development and have begun replacing it in existing products. Relative to our complete product portfolio, only a small number of products are affected by these actions.

Read more about Avon’s formal positions on product safety on avoncomapny.com.

ANIMAL WELFAREAvon has a deep respect for animal welfare and was the first major cosmetic company in the world to end animal testing. In June 1989, we announced a permanent end to animal testing of our products, including testing done in outside laboratories. For more than 20 years we have independently substantiated the safety of our products without animal testing. Avon does not conduct nor request animal testing in order to substantiate the safety or efficacy of any products or raw ingredients. Our approach to safety evaluation utilizes data from computational modeling, in vitro (test tube/cell culture) evaluation and clinical tests on human volunteers, as well as utilization of pre-existing data.

We have been active in the development, implementation and acceptance of alternative test methods since the 1980s, working to identify and develop new testing alternatives with other cosmetic companies and with external organizations.


http://www.avoncompany.com/corporate-responsibility/about-cr/positions-policies/product-safety


A few examples of our efforts include:

• Avon is a member of the Scientific Advisory Panel of the Institute of the In Vitro Sciences, Inc., a non-profit research and testing organization dedicated to the advancement of in vitro (non-animal) methods worldwide.

• We are a Founding Sponsor of the American Society for Cellular Computational Toxicology.

• We continue to support research alternatives conducted by the Fund for the Replacement of Animals in Medical Experiments (FRAME) in the United Kingdom, the Center for Alternatives to Animal Testing at Johns Hopkins University in the United States, and the European Partnership for Alternative Approaches to Animal Testing.

• We participate in science meetings, presenting our data on toxicology and use of alternatives, most recently at the 9th World Conference on Alternatives and Animal Use in the Life Sciences.

Some products may be required by law in a few countries to undergo additional safety testing, including animal testing. In these instances, we will first attempt to persuade the requesting authority to accept non-animal test data. Our commitment is to work within a country, in partnership with other organizations, to help bring about positive change and the acceptance of non-animal testing methods. Abandoning a market would deny us the opportunity to help drive toward a long term solution.

Additionally, the Avon Foundation for Women limits its research funding to clinical studies, human cell culture and epidemiologic studies. Avon Foundation funding may not be used to fund studies involving animals. The Avon Foundation’s guidelines apply only to studies funded by the Avon Foundation and do not impact other research underway at these same institutions.

Read Avon’s Animal Welfare policy on avoncompany.com.

NANOTECHNOLOGYAvon uses a limited number of ingredients characterized as nanomaterials, each with an average particle size of less than 100 nanometers. The safety of each of the ingredients characterized as a nanomaterial currently used by Avon has been individually and fully evaluated by our scientists before being permitted for use in cosmetic products. Our evaluation includes a specific assessment of the potential for nano-sized particles of these materials to be absorbed through the skin. We continue to closely monitor the scientific literature on nano-particles and, if we determine that a particular ingredient can no longer be considered to be used safely, we will discontinue its use.

Read Avon’s Nanotechnology policy on avoncompany.com.


http://www.iivs.org/

http://www.iivs.org/

http://www.frame.org.uk/

http://www.frame.org.uk/

http://caat.jhsph.edu/

http://caat.jhsph.edu/

http://ec.europa.eu/enterprise/epaa/index_en.htm

http://ec.europa.eu/enterprise/epaa/index_en.htm

http://www.wc9prague.org/

http://www.wc9prague.org/

http://www.avonfoundation.org/grants/breast-cancer/research-grant-guidelines/

http://www.avoncompany.com/corporate-responsibility/about-cr/positions-policies/animal-welfare

http://www.avoncompany.com/corporate-responsibility/about-cr/positions-policies/nanotechnology


CONFLICT MINERALSAvon supports ending the violence and human rights violations in the Democratic Republic of Congo (DRC) and adjoining countries, which is supported, in part, by financing from trade in certain “conflict minerals,” which include cassiterite, columbite-tantalite (coltan), gold and wolframite and their derivatives, tin, tantalum, and tungsten.

United States securities laws, implementing reporting and disclosure obligations under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, require that public companies report annually whether conflict minerals are necessary to the functionality or production of a product manufactured or contracted to be manufactured by the company.

In compliance, we are strengthening our due diligence capabilities and processes to identify the source of minerals used in company products and are committed to improving over time our ability to track and trace conflict minerals in our supply chain.

Read Avon’s 2013 conflict mineral position, Form SD filing and conflict minerals report on avoncompany.com.

PRODUCTION SAFETYAvon consistently captures and reports workplace accident information across Avon-owned global manufacturing plants and distribution centers. We use this data to publish quarterly global safety reports, allowing leadership to recognize excellent performance and identify areas for improvement.

We track Avon Recordable Cases (ARC), which is the number of incidents that are considered to be serious enough to be recorded, including lost time plus medical treatment beyond first-aid. A Total Recordable Case (TRC) rate indicates the total number of “Avon Recordable Cases” per 100 full-time Associates in Avon-owned global manufacturing plants and distribution centers.

In 2013, we achieved an overall TRC rate of 0.5, consistent with 2012, meeting the goal we set in 2010 to achieve a 0.5 TRC rate. This rate represents an 83 percent reduction in our TRC rate since 2007—equating to 350 fewer injuries on average, per year.

2007 2008 2009 2010 2011 2012 2013

610

362

286

225

170

120108

AVON RECORDABLE CASESSupply Chain Overall


http://www.avoncompany.com/corporate-responsibility/about-cr/positions-policies/conflict-minerals/


In 2013, 85 percent of Avon sites reported a TRC rate equal or below 0.5—a 3 percent increase in reporting over 2012.

Asia Pacific, EMEA and Latin America maintained low TRC rates—at 0.2, 0.3 and 0.4, respectively. North America experienced an increase in TRC in 2013, from 0.9 to 1.3, and we are addressing the need for improvement.

ANNUAL TOTAL RECORDABLE CASE (TRC) RATE Supply Chain Overall

ANNUAL TOTAL RECORDABLE CASESRegions

2007 2008 2009 2010 2011 2012 2013

2.4

1.3

1.00.8

0.60.5 0.5

APAC EMEA LATAM NA

1.3

1.7

3.2

2.0

1.1

1.1

1.5

1.0

0.7

0.7

1.2

1.3

0.5

0.7

0.8 1.

2

0.3 0.

4 0.6

1.1

0.4

0.3 0.4

0.9

0.2 0

.3 0.4

1.3

2007

2008

2009

2010

2011

2012

2013


There were no fatalities among full-time Avon Associates in supply chain operations in 2013.


Starting in 2012, we introduced three new key metrics to supplement TRC rates in measuring and comparing safety performance across Avon sites.

• Site Safety Programs Review (SSPR), a self-assessment safety review introduced in 2010, provides Avon with a systematic means for continuous improvement in safety performance at all Avon sites. Sites are given a weighted score reflecting the relative importance of 24 individual subjects measured across four key categories: Involvement in Safety; Assessment and Training; Specific Safety Programs and General Safety Programs. We set a performance target of 80 percent (out of 100 percent) across our supply chain. We exceeded our target with a score of 85 percent between May 2013 and May 2014 up, from 76 percent between May 2012 and May 2013.

• Safety Opportunity Reports (SORs) are voluntarily submitted by Associates to report unsafe conditions or actions, share ideas for improvement and record near-miss incidents at Avon sites. We set an annual target to receive SORs from 50 percent of full-time employees at each Avon site. In 2013, we exceeded our target by 30 percent (or achieved 130 percent of the target), with 15,628 SORs recorded.

• Safety Actions Completion (SAC) metrics track the number of safety action items completed by the defined due date. By the end of 2013, 86 percent of action items were completed by their due dates, up from 72 percent in 2012.

In 2013, we introduced an Overall Safety Index (OSI), which provides one score for overall safety performance based on results of all four Global Safety KPIs: Site Safety Programs Review (SSPR), Safety Opportunity Reports (SOR), Safety Actions Completion (SAC), and Total Recordable Case (TRC) rate. In 2013, the OSI for our overall supply chain was 82 out of 100.



Avon expects its factories, manufacturers, vendors or agents (“suppliers”) to act responsibly in all respects and to do their utmost to ensure that no abusive, exploitative or illegal conditions exist at their factories’ workplaces. We require that suppliers act in accordance with all applicable laws and regulations, as well as the standards set out in Avon’s Supplier Code of Conduct (“the Code”). Where local or industry practices exceed the requirements of the Code, the higher standard applies.

SUPPLIER CODE OF CONDUCT Avon’s manufacturing and sourcing processes are guided by our global Supplier Code of Conduct (the “Supplier Code”), helping to ensure compliance with applicable local and federal laws and regulations, as well as alignment with our internal standards regarding product safety and quality, environmental performance and human rights. We use the Supplier Code to promote best practices and improvement throughout facilities where our products are manufactured.

Key topics covered in the Code include:

• Local laws and regulations• Child labor• Forced labor• Working hours• Fair wages and benefits• Monitoring and compliance• Health and safety• Environmental management

We continue to progress along a journey to raise awareness and educate Avon Associates and suppliers about the Supplier Code. By the end of 2013, approximately 60 percent of supply chain Associates participated in formal training on the Supplier Code, with priority for those most directly responsible for relevant activities. Externally, we have conducted training sessions and seminars with approximately 70 percent of Avon’s “in scope” suppliers.

SUPPLIER DIVERSITYMore than 30 years ago, Avon implemented its first supplier diversity initiative. Today, we do business with a broad range of women- and minority-owned suppliers in North America. We continue to adopt a more centralized supply chain process, which strengthens our capability to accurately assess the services, commodities and regions in which growth and opportunities may exist for more diverse suppliers.

SUPPLIER AUDITSAuditing suppliers is a key element of managing our supply chain and working toward adherence to our standards outlined in the Supplier Code. We collaborate with external compliance and auditing firms hired to provide expertise to the supplier auditing process, including communication with suppliers and the scheduling of audits and re-audits.

SUPPLY CHAIN


http://www.avoncompany.com/documents/corporateresponsibility/supplychain/Supplier_Code_of_Conduct.pdf

http://www.avoncompany.com/documents/corporateresponsibility/supplychain/Supplier_Code_of_Conduct.pdf

http://www.avoncompany.com/documents/corporateresponsibility/supplychain/Supplier_Code_of_Conduct.pdf%20


The audit is a fact-finding process designed to help our suppliers identify areas within a factory’s operations that could be improved to ensure compliance with country-specific legal requirements and the Supplier Code. Audits review the supplier’s policies, procedures and record retention; labor and child labor policies and records; wage and benefits; work environment, including health and safety; environmental impacts and compliance with environmental regulations; and the communication of the Supplier Code to all management and employees. Based on level of compliance with each of the categories of the Supplier Code, suppliers are given a rating of “compliant,” “low risk,” “moderate risk,” or “high risk.”

The first series of audits in a new factory’s audit history are considered initial and include follow-up audits, as necessary. We then conduct regularly scheduled cycle audits following the initial audit series.

Since our initial 2008 commitment to ensure every supplier within scope is audited, we have made significant progress toward capacity building, assessing and helping to develop our suppliers. In 2013, Avon conducted 1,234 audits on suppliers in 39 countries, representing a 6 percent increase from 2012. We previously set a goal of auditing 95 percent of suppliers by 2015; however, due to a fluctuating baseline number of active suppliers, we recognize that we can report only on the actual number of suppliers audited.

Avon provides all suppliers with Avon’s Social Responsibility Guidebook for Suppliers, which includes information on Avon’s corporate responsibility program and related sourcing policies. The guidebook outlines suppliers’ responsibilities enabling them to assess their policies and practices and make improvements as needed.

2010 2011 2012 20130

500

1000

1500

670

1303

11641234

TOTAL SUPPLIER AUDITS CONDUCTED2010-2013


http://shop.avon.com/landing/srguidebook.html

http://shop.avon.com/landing/srguidebook.html


NOTE Totals represented in above illustrations do not include 17 factories due to denied access* (16 Fashion & Home Suppliers and one Indirect Supplier)

*Denied access includes the following circumstances on the day of the audit: appropriate management is not present, production is not occurring, or there are extenuating circumstances such as a power outage at the factory.

High risk issues continued to diminish from initial audit to second follow-up audit across our global supply chain. In total, in 2013, high risk issues dropped from 56 percent in initial audits to 20 percent in second follow-up audits among new suppliers, with ongoing remediation for remaining issues.

NOTE Totals represented in above illustration do not include 15 factories due to denied access in initial or follow-up auditing

2013 SUPPLY CHAIN AUDITS BY AVON BUSINESS UNIT(1,217* Total)

2013 SUPPLY CHAIN AUDIT RESULTSNew Supplier Audits

FASHION & HOME

COSMETICS, FRAGRANCES &

TOILETRIES

INDIRECT0

200

400

600

800

1000

1200

4824118349

252515

448

83

10COMPLIANT

LOW RISK

MODERATE RISK

HIGH RISK

INITIAL AUDIT(765)

FOLLOW UP AUDIT(221)

2ND FOLLOW UP AUDIT

(49)

0%

20%

40%

60%

80%

100%

56

40

20

50

26

23

53

20

4 4 4

COMPLIANT

LOW RISK

MODERATE RISK

HIGH RISK



NOTE Totals represented in above illustration do not include 2 factories due to denied access in initial auditing

Consistent with prior years, health and safety, wages and benefits, and hours of work remained the top three areas of high and moderate risk among the Code categories evaluated during audits in 2013.

2013 SUPPLY CHAIN AUDIT RESULTSCycle Audits

CYCLE INITIAL AUDIT

(140)

CYCLE FOLLOW UP

AUDIT(36)

CYCLE 2ND FOLLOW UP

AUDIT(6)

0%

20%

40%

60%

80%

100%4

1

66

2917 17

61

11 33

50

11 COMPLIANT

LOW RISK

MODERATE RISK

HIGH RISK



NOTE The majority of the findings in the child labor and forced labor categories are due to the factory not having proper documentation supporting legal young workers. Other issues in this category include factories not allowing workers to leave the facility during established free time.

CORRECTIVE ACTION PLANSIf an audit reveals an instance of noncompliance, Avon works with suppliers to develop a corrective action plan, with key action points and deadlines.

Suppliers are responsible for reviewing their corrective action reports and managing the improvement process under our guidance. In the event of noncompliance, we may require re-audits to verify that corrective actions have been implemented accordingly. We generally prefer remediation rather than termination, which delivers improved conditions that offer a longer-term benefit to the supplier and the community. We will, however, discontinue a relationship with any supplier who fails to address critical issues or make the necessary corrections requested within a specified, reasonable time period.


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30%

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50%

60%

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2013 SUPPLY CHAIN AUDIT RESULTSAreas of High and Moderate Risk

HIGH RISK

MODERATE RISK

About this

Report

Avon’s 2013 Corporate Responsibility Report details our corporate responsibility efforts, performance and progress toward our goals in 2013 across three pillars: Environmental Sustainability, Philanthropy and People. The report also provides updates on our commitment to responsibly managing the production of our products.



This is our fourth corporate responsibility report. We previously published reports in 2004, 2009 and 2012, which are available for download on avoncompany.com. Data and case studies contained in this report pertain to calendar year 2013 (January 1 – December 31), except where otherwise indicated. All references to currency are in U.S. dollars, unless otherwise noted. This report is in a pdf format with key additional information available on avoncompany.com

The boundaries of this report cover the core business of Avon Products, Inc., including our manufacturing operations, administrative offices and distribution facilities. In 2013, Avon sold product in more than 100 markets, with direct-sales operations in 62 countries and territories, and distributed products in an additional 43 through third-party distributors. The majority of our core business involves products within the beauty category—including cosmetics, fragrance and toiletries (also referred to as CFT). In 2013, we exited several small, underperforming markets, including South Korea, Vietnam and Republic of Ireland. In July 2013, we completed the sale of our Silpada Designs jewelry business.

The report covers mainly company-owned operations where we manufacture and package a majority of our beauty products. We work closely with third-party manufacturers to supply the remaining products and we report data related to third-party manufacturers in the Production and Supply Chain section of the report.

Report content focuses on topics that are most material to Avon and to our stakeholders, including Associates (employees), Avon Independent Sales Representatives, customers, investors, local communities, nonprofit partners, government regulators, and special interest or advocacy groups represented by nongovernmental organizations (NGOs).

This report was produced in accordance with the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines and we have self-declared the report as an application Level B. Please refer to the GRI Content Index for a listing of all standard disclosures.

We conducted an internal review of all data and assertions contained in this report to ensure accuracy of the content. Avon does not have a policy regarding external assurance, nor was this report externally verified by an independent third party.

Our goal is to produce a Corporate Responsibility Report every two years and publish a data summary in interim years. We will periodically update the online content on avoncompany.com, as needed.

We encourage our stakeholders to provide feedback on the topics covered in this report. Please submit any questions or comments on the report to the company by e-mail at [email protected].


http://www.avoncompany.com/corporate-responsibility/about-cr/reporting/reports/

http://www.avoncompany.com/corporate-responsibility/index.html

http://www.avoncompany.com/corporate-responsibility/about-cr/reporting/gri-index

http://www.avoncompany.com/corporate-responsibility/index.html


DEFINING OUR CONTENT

METHODOLOGYTo determine the most material corporate responsibility and sustainability topics for our 2013 Corporate Responsibility Report, we reviewed the items covered in our previous Corporate Responsibility reports to identify which were still relevant to our company and our stakeholders. We also gathered input from various internal and external sources, which is a continual process, and identified and prioritized the most material topics in 2013. The sources used in this process included:

• Internal documents and plans that articulated the company’s business objectives and strategies, policies, programs and risk factors;

• Communications prepared by the company for external release;• Feedback and insights from Associates, Independent Sales Representatives

and customers;• Shareholder communications;• Traditional media coverage;• Online and social media outlets;• Industry trade groups;• Trending and emerging issues of relevance; and• Stakeholder engagement.

After reviewing these sources, we determined the importance of the topics and potential impact against the following criteria:

• The planet and people• Our company• Avon’s stakeholders• The amount of reasonable control Avon has over a particular matter or action

RELEVANT TOPICSBased on the assessment and a review of the GRI Guidelines, we believe that the material corporate responsibility and sustainability topics of greatest importance to Avon and our stakeholders, of which our company has a reasonable level of control over, fall into the following areas:

• Impacts on climate change, including energy and deforestation, with a focus on paper and palm oil;

• Responsible use and management of resources, including water, raw materials and ingredients, packaging materials and waste reduction;

• Supply chain responsibility, including supplier code of conduct, auditing and monitoring;

• Product quality and safety;• Economic opportunities for women;• Continuity of Avon’s commitment to philanthropy, with a focus on the causes of

breast cancer and domestic violence;• Corporate ethics and compliance; and• Transparency and communication.


http://www.avoncompany.com/corporate-responsibility/about-cr/governance


STAKEHOLDER ENGAGEMENTAvon values the input of our stakeholders, from the Avon Independent Sales Representatives, Associates and customers to advocacy groups, philanthropic partners and investors. For example, we integrate stakeholder feedback into business strategies and operations to foster improvement in the areas of sustainability and corporate responsibility.

Avon’s key stakeholder groups, and the steps we take to engage them, are outlined below:

STAKEHOLDER ENGAGEMENT ACTIVITY

Associates

To keep employees around the world engaged and informed, we offer Associates an active global intranet, regional newsletters and frequent e-mail communication, which provide the latest company news, spotlight achievements and update Associates on relevant matters. We facilitate an Associate Culture Survey, which is designed to help us measure key aspects of our culture, understand what is working well, identify areas for improvement, and measure engagement. Senior leaders implement action plans to address matters that surfaced through the survey. Read more about how we are supporting our people on www.avoncompany.com.

Avon Independent

Sales Representatives

As the foundation of our business, we maintain frequent contact with our Representatives to gain feedback to help ensure that the Avon earnings opportunity meets their needs. We provide Representatives with traditional and digital tools and resources to develop and enhance their Avon businesses. Throughout the business, focus is on the “Representative Value Proposition”—the quality of the Representative experience—and key to this is an ongoing dialogue and understanding of the changing needs of the Representatives. Read more our efforts to empower women on avoncompany.com.

Customers

We have a 100 percent satisfaction guarantee, and provide numerous options for contacting the company about products or other experiences. Since we are a direct-selling company, our consumers often provide feedback through their Representatives, who in turn share feedback with our management. Online shoppers frequently use the local Avon e-commerce and social media sites to provide feedback, while other customers contact the Avon telephone customer call center through toll-free numbers (such as 800-445-2866 or 800-FOR-AVON in the United States), as well as an email address ([email protected]) in the United States). These contact points are printed on product packaging and made available on the company’s websites and other portals.

Our standard for customer care requires that all inquiries receive a timely response and that feedback is shared with the appropriate Associates so they are able to track and respond to issues and/or recommendations.


http://www.avoncompany.com/corporate-responsibility/people/supporting-our-people/

http://www.avoncompany.com/corporate-responsibility/people/empowering-women


STAKEHOLDER ENGAGEMENT ACTIVITY

Shareholders

We believe that shareholder communications are a key part of the corporate governance process and maintains an open line of communication with our shareholders and prospective investors. For example, we host quarterly conference calls and webcasts coincident with our quarterly and annual earnings announcements. As appropriate, we strive to:

• Have ongoing dialogue with key shareholders• Stay current on leading governance trends and understand

shareholder views• Identify shareholder priorities

Shareholders may contact us via e-mail (investor relations and individual relations or telephone (212-282-5320 and 212-282-5623). Read more on the Investor Relations section of our avoncompany.com.

Non-Profit and Advocacy

Groups

We are committed to open dialogue with external organizations and advocacy groups on key relevant matters. Responses to requests from advocacy organizations are typically addressed either by our corporate management, management in the local country, or through trade organizations such as the Personal Care Products Council and direct selling associations around the world for topics relevant to the industry as a whole.

Avon and the Avon Foundation for Women have engaged in dialogue with a broad range of groups representing health, environmental and other relevant matters, such as PETA (People for the Ethical Treatment of Animals), and Forest Ethics and Breast Cancer Action. Avon’s Healthy Forests, Beautiful World initiative supports The Nature Conservancy and World Wildlife Fund’s reforestation efforts. We have worked with additional environmental groups to formulate the Avon Paper Promise; and with Roundtable on Sustainable Palm Oil and GreenPalm to help craft the Avon Palm Oil Promise.


mailto:investor.relations%40avon.com?subject=

mailto:individual.investor%40avon.com?subject=




http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/reforestation/#paper-promise


http://www.avoncompany.com/corporate-responsibility/environmental-sustainability/reforestation%22%20\l%20%22palm-oil-promise

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