Sustainable Cosmetics

By Tom Branna, Editorial Director | July 6, 2011

When the Great Recession was raging, consumers began to pull back from making green purchases. Industry observers insist that these shoppers are coming back, but who gets to decide what's green and what isn't?

Sure, cosmetics can be produced sustainably. But are suppliers, marketers and, most importantly, consumers, willing to pay the price to attain these lofty standards and, if these standards are attained, just whose standards should become the standard for sustainability?

More than 180 personal care industry executives descended on New York City in May to debate these issues and arrive at some sort of consensus at the Sustainable Cosmetics Summit, organized by Organic Monitor. Summit topics included a diverse range of issues including environmental impacts, social footprints, sustainable supply chains and organic cosmetic standards.

The Summit opened with a keynote by designer William McDonough, who founded the Cradle-to-Cradle Products Innovation Institute, which has been billed by some as a step on the path toward the State of California’s plan to build a cradle-to-cradle economy. McDonough’s interests in sustainability are far-flung and he and his team have worked with a variety of industries to help them become more sustainable. For instance, he showed the audience several buildings and architectural designs that are better for the environment and the people who work in them.

A more cosmetic-centric view of sustainability was delivered by Charles J. Bennett, vice president, earth and community care, Aveda. He urged the industry to become more engaged with sustainability, noting that changing public policy is forcing companies to innovate or else get driven out of business. At the same time, Bennett noted that public reporting will continue to grow in importance, so he urged the audience to become proactive and stay honest about sustainability claims, lest they run the risk of ruining their brand reputation.

William McDonough, founder of Cradle to Cradle Products Innovation Institute, delivers the keynote address.
Bennett referred to a 2010 Edelmann poll that found 86% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’ interests.

“The intensity level continues to increase,” he told the audience. “Social media drives social purpose.”

Yet, at the same time, more companies are fighting for a limited number of raw materials, which is driving up prices, while regulations such as REACH and the soon tobe released ISO 26000, are forcing companies to rework their supply strategies.

“Unless we make the changes we need to make, the availability of resources and the needs of people will be a flash point,” he warned. For example, he asked the audience if all formulators should have access to sustainable ingredients, or should they be limited to only those who can pay?

And while he acknowledged that the cosmetics industry does a great job formulating products using some sustainable ingredients, he questioned the sustainability of major formula components, including surfactants, polymers, thickeners, emollients and preservatives. Still, he insisted that some materials are becoming more sustainable than others.

“Cargill and General Mills believe, that in a few years, palm oil will be produced sustainably,” Bennett observed.

Bennett reviewed Aveda’s position and mission in regard to sustainability and pointed out that seven products and packages have already been certified cradle-to-cradle. Packaging plays a major role in Aveda’s sustainability efforts, as the products use high post-consumer recycled packaging material. At the same time, the brand is committed to the organic conversion of its supply chain. In other moves, Aveda has mitigated climate change by relying on 100% wind energy manufacturing since 2007. For more than three years, Aveda’s manufacturing activities have been carbon neutral along with activities in its offices and stores. Finally, Aveda promotes wildlife habitat at its corporate site and has an outreach program that has donated nearly $18 million to communities in 12 years.

“Aveda’s commitment to sustainability is good for the earth and good for business,” he concluded.

Aveda doesn’t have the sustainability platform all to itself. There are plenty of personal care companies that have made inroads. Jenny Rushmore, global sustainability director, beauty & grooming, Procter & Gamble, provided some of the details of P&G’s sustainability strategy, noting that her company issued its first sustainability report in 1956 and today is a component of the Dow Jones’ Sustainability Index and the FTSE4Good program.

In its research, P&G found that consumers want environmentally-friendly products, without compromising performance, aesthetics and values.

“(Consumers) want sustainability, but they won’t trade down for it,” she told the audience.

Taking a science-based approach to sustainability, for example, P&G found that more than 90% of a shampoo’s environmental impact is caused by hot water in the shower.

“Sustainability is a journey; we are committed to be part of the solution,” she reminded those in attendance.

McDonough was back at the podium to explain the ins and outs of his Cradle-to-Cradle Institute, a private sector certification organization for improving product design to promote human and ecological health, eliminate the concept of waste, increase material reuse and promote the use of 100% renewable energy, clean water and socially responsible business practices.

“In the cradle to cradle concept, waste is food, all materials are healthy and safe, and consumption is a good thing,” he insisted. “Cradle to cradle changes everything, but only if it is done on a global scale.”

Making the most of our resources is critical if people want to maintain their ways of life. According to McDonough, pollution has lowered the oceans’ pH from 8.2 to 7.9 as the oceans absorb nearly half of the carbon dioxide generated by human.

“We are on our way to carbonic acid in our oceans,” he insisted.

If threats to the ocean weren’t enough, perhaps threats from regulators are enough to move marketers toward action. McDonough noted that new regulations, such as California’s AB1879, the Green Chemistry Initiative, will force consumer product companies to create sustainable products and divulge their content.

“You’re going to figure out what’s in your product and get rid of the bad stuff,” he insisted. “The Institute can help you do that.”

Yet, McDonough insisted that his Institute isn’t about stifling economic growth—it’s about encouraging and enhancing it. He called growth good in eco-centric design. Some consumer product companies that have already benefitted from the Institute’s expertise include Kiehl’s and Aveda, which improved material reutilization, and Method, which is a leader in water stewardship.

Other companies, such as Shaw Industries, are reusing Nylon 6 for carpeting, while P&G is making undrinkable water potable.

“(With) Cradle-to -Cradle certification, we can make sustainable products in our lifetime,” he insisted. “We want to be the agent of change. We want you to join the ‘more good team.’ Join us.”

It is a lively discussion when beauty industry leaders get together. Pictured (l-r): Amarjit Sahota, Organic Monitor (moderator); Ido Leffler, Yes to Carrots; Karen Behnke, Juice Beauty; Jasper Van Brakel, Weleda North America; Nick Vlahos, Burt’s Bees; and Mirran Raphaely, Dr. Hauschka Skin Care.
What to Buy from Whom?
If consumption is good, then what exactly should consumers buy if they want to be stewards of the earth? Rik Kutsch, executive director of the Union for Ethical Biotrade (UEBT), provided some insight on ethical sourcing and biodiversity attitudes among consumers. For example, biodiversity is not top-of-mind in the US. According to UEBT, while 93% of Brazilians and 98% of the French are aware of biodiversity, just 52% of Americans are aware of biodiversity. However, Kutsch predicted that by 2015, biodiversity awareness will grow substantially.

If he’s right about that, cosmetics companies may face an uphill battle for the hearts and minds of shoppers. That’s because, according UEBT research and interviews, only 40% of consumers trust cosmetic companies when it comes to issues such as ethical sourcing.

“Eighty percent of consumers want to be better informed about sourcing practices,” he insisted.

Kutsch urged the audience to be up-front about how and where they source their materials, insisting that for more consumers, biodiversity has become a global issue.

Peter Lovett and Elitza Barzakova provided insights on how the USAID West Africa Trade Hub is improving people’s livesas it delivers a reliable, sustainable supply of shea to a range of industries, including cosmetics. By harvesting shea sustainably, companies improve the lives of West Africans, reduce their carbon footprints and protect the ecosystem, they said.

Similarly, May E. Spaull, director of new category innovation, Fair Trade USA, explained how Fair Trade practices ensure quality products, as they improve lives and protect the planet. Spaull insisted that by utilizing Fair Trade, companies will deepen the consumer’s connection to their products. She insisted that 75% of consumers have an improved brand perception for products that are Fair Trade-certified and 47% of them are willing to pay more for FT products. According to Spaull, there are 150 FT-certified beauty products in the US and 320 FT-certified products globally.

Henkel’s Efforts
Henkel has emphasized sustainability for decades and continues to implement it along the value chain as part its holistic approach to sustainability, explained Pete He, senior research fellow, R&D and sustainability, Henkel Consumer Goods. The company has already achieved and exceeded many of the sustainability targets it set to accomplish in 2012. For example, Henkel has decreased energy consumption by 21%, reduced its waste footprint by 24% and reduced water consumption by 26%. But the company wants even more. At last year’s World Detergent Conference, Henkel chairman Kaspar Rorsted urged the industry to consider collective actions to boost the sustainability of business activities by a factor of three for 2030.

In North America, Henkel’s three-point plan includes a commitment to “eco-innovation” for its products and supply chains; strengthening sustainability partnerships with stakeholders in its business value chain and enhancing employee and community engagements through its “Ecommitment” program, which is designed to motivate employees to reduce work-related safety, health and environmental impacts, support local sustainability efforts and share Henkel’s best practices and successes.

Through these efforts, Henkel has improved the environmental footprint for a wide range of products, including Schauma shampoo and Dial liquid hand soap. Now, the company has teamed up with Arizona State University researchers to determine if algae or cyanobacteria photosynthesis can be an effective alternative route to produce bio-based chemicals for consumer products.

Moreover, the company is measuring its Eco-innovations to understand the impact of its efforts. For example, by reducing a liquid cleaning package from 3.0 liters to 1.875 liters, Henkel found the new solution to be about 40% more sustainable.

The CEO’s View
The Summit included a lively discussion among CEOs from five natural personal care companies: Mirran Raphaely, Dr. Hauschka Skin Care; Karen Behnke, Juice Beauty; Ido Leffler, Yes to Carrots; Jasper Van Brakel, Weleda North America; and Nick Vlahos, Burt’s Bees. Most of them agreed that certification was secondary to product efficacy. That said, there was also consensus that a major challenge for natural and organic brands is to provide greater authenticity to consumers, who remain very confused about what terms such as “natural” and “organic” actually mean.

Amarjit Sahota, president of Organic Monitor, tried to clear up this confusion with some simple definitions. Organic cosmetics contain certified organic ingredients and/or meet private standards; i.e., USDA or Ecocert. Natural cosmetics are made from plant extracts and natural ingredients and contain low or minimal amounts of “synthetic” chemicals, such as SLS or SLES.

But Sahota warned the audience that while offering natural or organic products was a successful strategy three or four years ago, today it is all about being sustainable, which just might explain why Organic Monitor has a full slate of Summits on tap during the next year (see box below).

More on Sustainability
Organic Monitor has announced the dates of the next edition of its Sustainable Cosmetics Summit:
• Asia-Pacific, Hong Kong, Nov. 7-8, 2011;
• Europe, Paris, Nov. 28-30, 2011;
• North America, New York, May 10-12, 2012.
More info: www.sustainablecosmeticssummit.com

Related End-User Markets: