Makeup is everywhere; in stores, online, and of course… on our faces. Day in, day out, A-list celebrities and major fashion houses pump out product after product to match the hottest beauty trend. However, before you click buy on that heavy-duty skin toner, what steps can we take to think bigger and ensure we’re buying ESG-aligned products?
Let’s contextualise. In an era of increasing attention on sustainability and ESG, 89% of investors consider ESG issues as part of their investment approach (Baker, 2023). In another report, PwC found that 83% of consumers believe companies should actively set and work on ESG targets (Herman, 2023). Additionally, people who buy most in the beauty industry are millennial women (aged 27-42), who make up 38% of the share. In efforts to appeal to this increasingly eco-conscious demographic, companies across various industries are understandably beginning to examine their own ESG positions and initiate progress.
For simplicity, only two main avenues of change were described: ingredient sourcing, and packaging.
Environmentally, companies could choose ingredients that are organic or vegan to ensure ethical harvesting standards and avoid animal cruelty. For instance, more than 75% of Weleda’s plant ingredients come from organic farming, and Axiology Beauty is committed to a zero-tolerance policy for palm oil, and animal testing. Similarly, companies can reduce packaging, substitute biodegradable materials, or make their packaging recyclable. For example, the Body Shop:
“Nearly all our PET plastic product packaging contains 100% recycled material, and a significant proportion of this comes from community fair trade material through our partner, Plastics for Change.” – The Body Shop Website
Socially, companies are being increasingly pressured to examine supply chains and cut out exploitative labour practices. Specifically, here are six main high-risk for child labour: palm oil, cocoa, vanilla, shea, mica, and copper (Shaw, 2023). Investigating and managing supply chains are difficult and complex; not everyone has the time of day to dig through the details, but a good start is finding companies with certain certifications such as the B Corp and Fair Trade certifications. These are nonprofit reporting standards that companies need to meet before certification. Popular B Corp companies include The Body Shop, Aesop, and Typology.
Governance includes how companies are managed. Are they compliant with local regulations? How transparent are they in business affairs? How diverse are their leaders? In terms of governance, French brand L’Oreal comes up as the most diverse in the beauty & care industry. They are known for gender inclusion, with women representing 50% of board members, 32% of the executive committee, and 61% of international brand directors.
In closing, ESG manifests in so many ways - difficult to capture in a single article, but awareness of ethical practices and certifications are a great starting point. The idea of ESG is so broad – finding that “golden standard” company is next to impossible, but you *can* start with Googles of ethical lists and nonprofit regulations (e.g., the B Crop certificate we mentioned!).
Hopefully, this helps give a start for that next moisturiser purchase. Doesn’t it feel great to slay the day and not the environment?
Sources:
Baker, B. (2023) ESG investing Statistics 2023, Bankrate. Edited by M. Barba. Available at: https://www.bankrate.com/investing/esg-investing-statistics/ (Accessed: 31 October 2023).
Herman, C. (2023) How much does the public care about ESG?, PwC. Available at: https://www.pwc.com/gx/en/services/sustainability/publications/cop26/how-much-does-the-public-care-about-esg-pwc-cop26.html (Accessed: 31 October 2023).
Shaw, K. and Cisney, M. (2023) THE HIGH PRICE OF BEAUTY: Child labour in global cosmetics. Available at: https://www.worldvision.org.uk/media/0zoi4a4o/childlabouringlobalcosmetics.pdf (Accessed: 31 October 2023).
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