Christine Esposito, Associate Editor06.01.15
There was a time when having shea butter in a formulation was enough information to win over a skin care customer. But in the modern personal care marketplace, ingredients like shea are being scrutinized far beyond their efficacy and aesthetic value. Consumers, retailers and stakeholders are asking questions: Where did it come from? How it was sourced? Did local people benefit from the harvest?
It’s a sign that consumption of green, natural and organic ingredients and products is no longer just “what’s in it for me”—there’s emphasis on the greater good too.
“As plant based ingredients are gaining more and more currency, we are seeing a big shift. Green ingredients were produced for consumer safety. Now there is a shift in terms of environmental focus,” noted Amarjit Sahota, founder and president of Organic Monitor, at his organization’s Sustainable Cosmetics Summit held in New York City last month.
Faced with the need to be greener, more ethical and put less of a strain on Mother Earth as they produce their wares, personal care manufacturers are looking down the supply chain to achieve their goals.
Just last month, L’Oréal provided an update on Sharing Beauty with All (SBWA), its sustainability report that highlights various examples of its carbon, solar and energy reduction efforts. In the report, L’Oréal also spells out future plans for its raw materials supply chain.
In SBWA, L’Oréal states, “we will innovate so that 100% of products have an environmental or social benefit” including that new formulas will use “renewable raw materials that are sustainably sourced or raw materials derived from green chemistry.”
L’Oréal’s internal assessment tools are used to “screen all of its raw materials of plant origin according to multiple social and environment criteria, so as to identify the most meaningful opportunities for improved sustainable sourcing,” noted Jonathan Maher, AVP-corporate social responsibility and sustainability, L’Oréal USA. “Essentially the company favors those ingredients for which a more sustainable procurement will generate the greatest positive social and environmental impact. These are for the most part ingredients of plant origin whose production relies heavily on manual labor.”
According to Maher, L’Oréal investigates with its supplier the conditions of cultivation, and “more generally the environmental and social impacts of its supply chain.”
As examples, he called attention to shea butter and argan oil.
“If you take two of our characteristic sustainably-sourced ingredients, shea butter and argan oil, the fair wages and community services that were put in place have had a large-scale impact. In the case of shea butter, it has benefited thousands women in Burkina Faso and hundreds of women in Morocco in the case of argan oil.”
According to Maher, the approach taken with these two ingredients is being extended to all of L’Oréal’s renewable raw materials. “We are committed by 2020 to ensure that 100% of our renewable raw materials are sustainably sourced,” he said.
It all begins at the supplier level, and as such, leading companies have been investing in practices and protocols to insure that they are delivering what their customers require.
At the Sustainable Cosmetics Summit, AAK’s sourcing director Henrik Vingaard highlighted his company’s work in Burkina Faso. In 2009, AAK shifted away from dealing with traders and agents and began working directly with the local women who harvest the shea kernels. Between June 2013 and May 2014, the number of women involved in the program rose from 14,000 to 37,000, according to AAK, which is a founding member of the Global Shea Alliance.
“It is all about transparency,” said Vingaard. AAK provides the women with training, pre-financing, logistics and bonuses, as well as access to education and vaccination programs—all with “no strings. They can sell to whomever they like.”
Another ingredient on the docket at the Sustainable Cosmetics Summit was squalane, as suppliers discussed the merits of sustainable sources that do not come from shark. For example, Erik De Vries, North America regional sales manager at Amyris, discussed how sugar cane is the sustainable source of Amyris’ Neossance Squalane, which is distributed in North America by Centerchem. Amyris’ biorefinery in Brazil is the first Roundtable for Sustainable Bio-materials (RSB) certified facility in the country.
New Rules
As natural ingredients gain momentum in mainstream markets, new regulations on biodiversity-based R&D are being adopted in Europe and other areas.
For example, the Nagoya Protocol—a UN agreement currently binding in more than 55 countries—requires access and benefit sharing (ABS) permits for R&D into the genetic or biochemical components of biodiversity. Such research would include, for example, exploring plant parts, extracts or oils for new cosmetics ingredients. Further, EU regulation 511/2014 requires companies to prove that biodiversity research permits have been secured as part of the market approval process for natural ingredients.
Countries, including France, Brazil, India, Mexico, Morocco and South Africa, also have rules on how biodiversity is accessed for R&D and how resulting benefits must be shared too, according to the Union for Ethical BioTrade (UEBT), which this month will hold its 2015 Beauty of Sourcing with Respect conference in Paris.
For the June 25 conference, UBET has designed sessions that will delve into how rules may affect practices on biodiversity-based R&D, covering approaches to addressing ABS due diligence requirements under the EU regulation. There will also be regulatory updates on India and Brazil and a look at practical experiences with negotiating ABS agreements. Conference supporters include L’Oréal, Weleda and Natura Brazil.
Late last year, Natura became a Certified B Corp, a public statement about its efforts related to environmental and social stewardship and transparency. In doing so, the $2 billion cosmetic giant became the largest firm to join the movement, which to date has been populated by smaller personal care firms.
Transparency and Progress
As large and small companies place greater emphasis on sustainability, the search is on for suppliers that can deliver.
“At Honest, we’re committed to making effective, safe, responsible products while keeping both human health and sustainability top of mind. We work with suppliers and manufacturers who share this commitment and who have independent third party certifications (when applicable) to ensure ethical labor and operational practices,” said Laurel Angelica Myers, senior director of product development for The Honest Company.
“Our suppliers are absolutely critical to our development process,” she added.
Across category, savvy suppliers like Croda have been proactive. The firm, which has been a member of Roundtable on Sustainable Palm Oil (RSPO) since 2006, now has seven manufacturing sites certified to the RSPO Mass Balance process, which enables certified and conventional PO to be mixed, but with the certified oil volume being traced throughout the supply chain.
These sites handle more than 80% of Croda’s total volume of palm derivatives, an important step in developing a certified physical supply chain, according to Croda, which supplies sustainable PO ingredients to more than 300 customers in several sectors, including personal and home care.
The company is also committed to reducing its own environmental footprint. In April, Croda broke ground on a $170 million project to create its first North American plant that will lead to 100% sustainable nonionic surfactants produced at its Atlas Point facility.
“This investment represents a tidal shift, especially for consumer goods manufacturers who are striving for sustainability and performance,” Croda International Plc CEO Steve Foots said at the ground-break ceremony in New Castle, DE.
The expansion of Atlas Point’s operations will enable Croda to produce nonionic surfactants from bio-ethanol while maintaining performance standards—a key issue that can’t be overlooked as consumers are not willing to trade performance.
This new project follows a string of others in which Croda has improved its own sustainability profile, including a $2.3 million investment in solar panels and another $8 million spent on a project to use landfill gas to generate electric and steam.
Point of Purchase
At retail, the chatter about ethics and sustainability has been on the rise for years. Charting the course has been The Body Shop. Throughout her career, the late Anita Roddick stood against animal testing and stood up for many voiceless people, such as indigenous tribes in Africa or the homeless in London—and she used her company’s retail shops as a megaphone.
The practice continues today as sales associates serve as messengers, providing customers with that “something to love about a product, beyond the efficacy,” said Jennifer Barckley, director, brand communications and values, The Body Shop, during her presentation at the Sustainable Cosmetics Summit.
Even the biggest mass-market retailers are more vocal.
Earlier this year Walmart unveiled its Sustainability Leaders shop, the online shopping portal on Walmart.com that helps customers identify and purchase products from suppliers that the retailer contends are leading in sustainability. The launch helps to “advance Walmart’s goal to offer customers a way to choose products they can afford, and that are produced in an environmentally and socially responsible way,” according to the company.
“The Sustainability Leaders shop on Walmart.com is the first step in helping our customers identify which brands and suppliers are leading the way in sustainability,” Neil Ashe, president and CEO of global e-commerce for Walmart stores, said in a press statement. “Our customers can trust us to work with suppliers who have an ongoing commitment to both sustainability and affordability.”
According to Kathleen McClaughlin, SVP-sustainability, Walmart has done the “heavy lifting” to empower its customer to “put their money where their heart is.”
Customers can do the same at Target. This Spring the retailer rolled out its newest and largest ever Made To Matter collection, which Kathee Tesija, chief merchandising and supply chain officer, said delivers customers “better-for-you and better-for-the-world products, and our research shows that they seek authenticity and transparency from the brands they buy.”
Sustain or Improve?
Authenticity and transparency are essential, according to the leaders in sustainability.
“When you are selling products, you are building trust. Our number one product we are selling is trust,” Pangea Organics founder Joshua Onysko said during the Sustainable Cosmetics Summit.
Onysko, who serves as chief product officer for the 15-year-old firm, pointed to the growing toolbox of organic and sustainable ingredients that can now be used to formulate Pangea’s products.
“When I had to make our first organic skin cream, there were only three organic emulsifiers in the world. I hated dealing with them. We were tiny customers to them. Now, my email box is flooded with emulsifiers and preservatives.”
At the Summit, Onysko challenged the use of the word sustainability, suggesting it doesn’t get consumers excited.
“We don’t want to sustain. When we leave the planet, don’t we want it to be better?” he asked.
But there are big challenges to be sustainable, especially for smaller firms that pay more for raw materials because they buy by the bucket rather than drum.
“To be honest, for a small company, it is very expensive,” according to Curt Valva, general manager, SVP, Suki Skincare. “It would be very easy to use less packaging or to compromise on the quality of the ingredients, or dumb down product to put a little more profit in your pocket.”
Yet the leaders in the sector—including others on the panel (W.S. Badger, Pangea and Intelligent Nutrients)—are the ones that “walk the walk,” according to Valva.
And as such, they have a responsibility that stretches beyond sourcing to product safety and how finished products degrade when washed down the drain.
“We need to start with the ingredients. When doing formulations, let’s plan,” he said. “When we come up idea with idea for a new shampoo, we need to think, at that point, about what is going to happen at the very end.”
It’s a sign that consumption of green, natural and organic ingredients and products is no longer just “what’s in it for me”—there’s emphasis on the greater good too.
“As plant based ingredients are gaining more and more currency, we are seeing a big shift. Green ingredients were produced for consumer safety. Now there is a shift in terms of environmental focus,” noted Amarjit Sahota, founder and president of Organic Monitor, at his organization’s Sustainable Cosmetics Summit held in New York City last month.
Faced with the need to be greener, more ethical and put less of a strain on Mother Earth as they produce their wares, personal care manufacturers are looking down the supply chain to achieve their goals.
Just last month, L’Oréal provided an update on Sharing Beauty with All (SBWA), its sustainability report that highlights various examples of its carbon, solar and energy reduction efforts. In the report, L’Oréal also spells out future plans for its raw materials supply chain.
In SBWA, L’Oréal states, “we will innovate so that 100% of products have an environmental or social benefit” including that new formulas will use “renewable raw materials that are sustainably sourced or raw materials derived from green chemistry.”
L’Oréal’s internal assessment tools are used to “screen all of its raw materials of plant origin according to multiple social and environment criteria, so as to identify the most meaningful opportunities for improved sustainable sourcing,” noted Jonathan Maher, AVP-corporate social responsibility and sustainability, L’Oréal USA. “Essentially the company favors those ingredients for which a more sustainable procurement will generate the greatest positive social and environmental impact. These are for the most part ingredients of plant origin whose production relies heavily on manual labor.”
According to Maher, L’Oréal investigates with its supplier the conditions of cultivation, and “more generally the environmental and social impacts of its supply chain.”
As examples, he called attention to shea butter and argan oil.
“If you take two of our characteristic sustainably-sourced ingredients, shea butter and argan oil, the fair wages and community services that were put in place have had a large-scale impact. In the case of shea butter, it has benefited thousands women in Burkina Faso and hundreds of women in Morocco in the case of argan oil.”
According to Maher, the approach taken with these two ingredients is being extended to all of L’Oréal’s renewable raw materials. “We are committed by 2020 to ensure that 100% of our renewable raw materials are sustainably sourced,” he said.
It all begins at the supplier level, and as such, leading companies have been investing in practices and protocols to insure that they are delivering what their customers require.
At the Sustainable Cosmetics Summit, AAK’s sourcing director Henrik Vingaard highlighted his company’s work in Burkina Faso. In 2009, AAK shifted away from dealing with traders and agents and began working directly with the local women who harvest the shea kernels. Between June 2013 and May 2014, the number of women involved in the program rose from 14,000 to 37,000, according to AAK, which is a founding member of the Global Shea Alliance.
“It is all about transparency,” said Vingaard. AAK provides the women with training, pre-financing, logistics and bonuses, as well as access to education and vaccination programs—all with “no strings. They can sell to whomever they like.”
Another ingredient on the docket at the Sustainable Cosmetics Summit was squalane, as suppliers discussed the merits of sustainable sources that do not come from shark. For example, Erik De Vries, North America regional sales manager at Amyris, discussed how sugar cane is the sustainable source of Amyris’ Neossance Squalane, which is distributed in North America by Centerchem. Amyris’ biorefinery in Brazil is the first Roundtable for Sustainable Bio-materials (RSB) certified facility in the country.
New Rules
As natural ingredients gain momentum in mainstream markets, new regulations on biodiversity-based R&D are being adopted in Europe and other areas.
For example, the Nagoya Protocol—a UN agreement currently binding in more than 55 countries—requires access and benefit sharing (ABS) permits for R&D into the genetic or biochemical components of biodiversity. Such research would include, for example, exploring plant parts, extracts or oils for new cosmetics ingredients. Further, EU regulation 511/2014 requires companies to prove that biodiversity research permits have been secured as part of the market approval process for natural ingredients.
Countries, including France, Brazil, India, Mexico, Morocco and South Africa, also have rules on how biodiversity is accessed for R&D and how resulting benefits must be shared too, according to the Union for Ethical BioTrade (UEBT), which this month will hold its 2015 Beauty of Sourcing with Respect conference in Paris.
For the June 25 conference, UBET has designed sessions that will delve into how rules may affect practices on biodiversity-based R&D, covering approaches to addressing ABS due diligence requirements under the EU regulation. There will also be regulatory updates on India and Brazil and a look at practical experiences with negotiating ABS agreements. Conference supporters include L’Oréal, Weleda and Natura Brazil.
Late last year, Natura became a Certified B Corp, a public statement about its efforts related to environmental and social stewardship and transparency. In doing so, the $2 billion cosmetic giant became the largest firm to join the movement, which to date has been populated by smaller personal care firms.
Transparency and Progress
As large and small companies place greater emphasis on sustainability, the search is on for suppliers that can deliver.
“At Honest, we’re committed to making effective, safe, responsible products while keeping both human health and sustainability top of mind. We work with suppliers and manufacturers who share this commitment and who have independent third party certifications (when applicable) to ensure ethical labor and operational practices,” said Laurel Angelica Myers, senior director of product development for The Honest Company.
“Our suppliers are absolutely critical to our development process,” she added.
Across category, savvy suppliers like Croda have been proactive. The firm, which has been a member of Roundtable on Sustainable Palm Oil (RSPO) since 2006, now has seven manufacturing sites certified to the RSPO Mass Balance process, which enables certified and conventional PO to be mixed, but with the certified oil volume being traced throughout the supply chain.
These sites handle more than 80% of Croda’s total volume of palm derivatives, an important step in developing a certified physical supply chain, according to Croda, which supplies sustainable PO ingredients to more than 300 customers in several sectors, including personal and home care.
The company is also committed to reducing its own environmental footprint. In April, Croda broke ground on a $170 million project to create its first North American plant that will lead to 100% sustainable nonionic surfactants produced at its Atlas Point facility.
“This investment represents a tidal shift, especially for consumer goods manufacturers who are striving for sustainability and performance,” Croda International Plc CEO Steve Foots said at the ground-break ceremony in New Castle, DE.
The expansion of Atlas Point’s operations will enable Croda to produce nonionic surfactants from bio-ethanol while maintaining performance standards—a key issue that can’t be overlooked as consumers are not willing to trade performance.
This new project follows a string of others in which Croda has improved its own sustainability profile, including a $2.3 million investment in solar panels and another $8 million spent on a project to use landfill gas to generate electric and steam.
Point of Purchase
At retail, the chatter about ethics and sustainability has been on the rise for years. Charting the course has been The Body Shop. Throughout her career, the late Anita Roddick stood against animal testing and stood up for many voiceless people, such as indigenous tribes in Africa or the homeless in London—and she used her company’s retail shops as a megaphone.
The practice continues today as sales associates serve as messengers, providing customers with that “something to love about a product, beyond the efficacy,” said Jennifer Barckley, director, brand communications and values, The Body Shop, during her presentation at the Sustainable Cosmetics Summit.
Even the biggest mass-market retailers are more vocal.
Earlier this year Walmart unveiled its Sustainability Leaders shop, the online shopping portal on Walmart.com that helps customers identify and purchase products from suppliers that the retailer contends are leading in sustainability. The launch helps to “advance Walmart’s goal to offer customers a way to choose products they can afford, and that are produced in an environmentally and socially responsible way,” according to the company.
“The Sustainability Leaders shop on Walmart.com is the first step in helping our customers identify which brands and suppliers are leading the way in sustainability,” Neil Ashe, president and CEO of global e-commerce for Walmart stores, said in a press statement. “Our customers can trust us to work with suppliers who have an ongoing commitment to both sustainability and affordability.”
According to Kathleen McClaughlin, SVP-sustainability, Walmart has done the “heavy lifting” to empower its customer to “put their money where their heart is.”
Customers can do the same at Target. This Spring the retailer rolled out its newest and largest ever Made To Matter collection, which Kathee Tesija, chief merchandising and supply chain officer, said delivers customers “better-for-you and better-for-the-world products, and our research shows that they seek authenticity and transparency from the brands they buy.”
Sustain or Improve?
Authenticity and transparency are essential, according to the leaders in sustainability.
“When you are selling products, you are building trust. Our number one product we are selling is trust,” Pangea Organics founder Joshua Onysko said during the Sustainable Cosmetics Summit.
Onysko, who serves as chief product officer for the 15-year-old firm, pointed to the growing toolbox of organic and sustainable ingredients that can now be used to formulate Pangea’s products.
“When I had to make our first organic skin cream, there were only three organic emulsifiers in the world. I hated dealing with them. We were tiny customers to them. Now, my email box is flooded with emulsifiers and preservatives.”
At the Summit, Onysko challenged the use of the word sustainability, suggesting it doesn’t get consumers excited.
“We don’t want to sustain. When we leave the planet, don’t we want it to be better?” he asked.
But there are big challenges to be sustainable, especially for smaller firms that pay more for raw materials because they buy by the bucket rather than drum.
“To be honest, for a small company, it is very expensive,” according to Curt Valva, general manager, SVP, Suki Skincare. “It would be very easy to use less packaging or to compromise on the quality of the ingredients, or dumb down product to put a little more profit in your pocket.”
Yet the leaders in the sector—including others on the panel (W.S. Badger, Pangea and Intelligent Nutrients)—are the ones that “walk the walk,” according to Valva.
And as such, they have a responsibility that stretches beyond sourcing to product safety and how finished products degrade when washed down the drain.
“We need to start with the ingredients. When doing formulations, let’s plan,” he said. “When we come up idea with idea for a new shampoo, we need to think, at that point, about what is going to happen at the very end.”