Environmental impact the ‘big’ opportunity in ethical beauty

By Kacey Culliney

- Last updated on GMT

Climate change concerns are at the forefront of consumer minds, and there are important opportunities for beauty companies to action and communicate change in this space [Getty Images]
Climate change concerns are at the forefront of consumer minds, and there are important opportunities for beauty companies to action and communicate change in this space [Getty Images]

Related tags ethical beauty sustainable beauty circular beauty Sustainable packaging Sustainability Environment green beauty clean & ethical beauty GlobalData Mintel

Consumer interest in ethical beauty continues to soar in Europe, fuelled by heightened concerns around climate change and the ongoing global pandemic, and so industry must sharpen action and communication on environmental impact, says a GlobalData analyst.

Two in five (41%) European consumers find third-party, verified certifications an influential factor when purchasing goods, including beauty and personal care products, according to GlobalData’s Q3 2021 consumer survey. And just over half (54%) of consumers in this region find carbon footprints claims quite or extremely important.

Speaking to CosmeticsDesign-Europe, Khadija Begum, consumer analyst at GlobalData, said that for beauty there were clear opportunities for brands and manufacturers to strengthen engagement in this space.

“Reducing carbon footprints and having a positive impact on the environment is a big one,”​ Begum told CosmeticsDesign-Europe.

“…The proliferation of beauty e-commerce will also be a major opportunity,” ​she said. “Online shopping is able to give a spotlight to brands that align with these ethical trends, whether it is the consumer manually searching themselves or through sponsorships and advertising on social platforms such as Instagram, Facebook or TikTok. Targeted marketing and online shopping is allowing companies to directly engage with consumers, reach a global audience and, crucially, provide important information regarding the brands’ manufacturing practices and operations. This helps to build brand loyalty and highlight the brand as ethical amid increased competition.”

The rise of ethical – COVID-19 pandemic and climate concerns key

The ongoing COVID-19 pandemic and rising climate change concerns are driving demand and expectations in ethical beauty [Getty Images]
The ongoing COVID-19 pandemic and rising climate change concerns are driving demand and expectations in ethical beauty [Getty Images]

Begum said the continued interest and engagement in ethical beauty, veganism, cruelty-free and planetary good, was being fuelled by key and ongoing consumer shifts. “These trends are, undoubtedly, a response to consumers’ growing concerns about climate change, as well as a consequence of the global pandemic, which put corporate, social and environmental responsibility into the global spotlight.

“…Consumers also have more access to brand information and activity than ever before, empowering them to choose products that align with their values and needs, while boycotting ones that don’t,”​ she said.

This “increasingly well informed”​ beauty consumer, she said, was now more likely to actively search out and engage with companies that aligned with their interests, be that environmental impact or cruelty-free.

As a result, companies and corporations worldwide were changing how they presented and produced beauty products, she said. Many, for example, were investing in sustainable formulation and packaging innovation and investing in claims like ‘kind to the planet’, ‘cruelty-free’ or ‘vegan’, many of which were third-party verified and had become “key indicators of ethical practices”,​ she said.

Global regulations and COP26 commitments a challenge

Increasing regulations and governmental pressure will likely create hurdles for the beauty industry moving forward [Getty Images]
Increasing regulations and governmental pressure will likely create hurdles for the beauty industry moving forward [Getty Images]

However, Begum there were plenty of challenges ahead as industry edged deeper into the ethical beauty space.

“In recent years, more pressure has been put on brands to create ethically-sourced and manufactured products. Supply chains have been under increased scrutiny, as activists, governments and the wider public demand more transparent and sustainable operations from major companies.”

And as industry continued to innovate and expand, she said increased regulations could present barriers to brands, particularly those operating across markets or globally. “For instance, although China updated its animal testing laws in 2021 to exempt some cosmetics from animal testing​, this does not apply to all cosmetic products. For brands committed to cruelty-free and vegan claims, this is a complicated barrier to overcome – and the brand could risk looking disingenuous if it complies with the testing requirements to sell in China despite having a cruelty-free product portfolio in other markets.”

Similarly, the Food and Drug Administration (FDA) in the US had its own regulatory requirements for cosmetic ingredients that must be met before market entry, she said.

COP26 commitments also presented potential challenges for the beauty industry in the future, Begem said, as many brands had made important pledges to cut carbon emissions in the coming years – an aspect that was likely to become “more regulated as governments attempt to meet ambitious carbon goals”.​ The hurdle here, she said, would be overcoming risks of “accusations of greenwashing and public backlash” ​if it was believed companies were not fulfilling these commitments.

Beauty claims and sustainable manufacturing transitions

So, as ethical beauty continued to gain traction in the long-term, Begem said responding to and overcoming these challenges would be important, as well as fulfilling the “more prominent requirement” ​for all beauty products to offer vegan claims and operate sustainably.

Looking ahead, she said technologies like block chain would be useful for industry as they enabled greater transparency, for both governments and consumers alike. Though, back in January 2020, GlobalData said this technology remained ‘relatively niche’ in the beauty category.

The Bigger Picture

Ethical beauty claims becoming ‘more mainstream’

According to a Mintel’s latest report UK The Ethical BPC Consumer Market Report​, 68% of UK adults considered ethical beauty and personal care brands as those that protected the environment, but awareness of certifications like B Corp remained low. “This suggests that while consumers want proof of a brand’s ethical credentials, they do not always recognise when it is displayed.”

However, Mintel said the number of ethical beauty claims made by brands and manufacturers was continuing to rise, fast becoming “more mainstream”. ​Environmentally friendly claims had also seen a “significant rise”.​  

According to Mintel, on-pack communication would be “essential”​ for future strategies from ethical beauty brands, though it had to be done so wisely. “On-pack space is limited, meaning that brands will need to be innovative in how ethical practices, which can often be complicated, are related on-pack. While certifications can show a brand’s credentials when it comes to vegan and environmentally friendly positioning, a brand’s corporate practices, such as fair treatment of employees, are much harder to relay on pack.”

Moving forward, therefore, raising awareness on existing certifications would be key – the likes of B Corp and the Roundtable on Sustainable Palm Oil (RSPO) – as well as investing in informative in-store displays and QR codes that unlocked additional information and educated consumers, Mintel said.

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