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Review

Sustainable Assessment of the Environmental Activities of Major Cosmetics and Personal Care Companies

by
Hea Young Lim
1,2 and
Ki Han Kwon
3,*
1
Division of Beauty Arts Care, Department of Beauty Arts Care, Graduate School, Dongguk University, Seoul 04620, Republic of Korea
2
Amorepacific Co., Seoul 04386, Republic of Korea
3
College of General Education, Kookmin University, Seoul 02707, Republic of Korea
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(18), 13286; https://doi.org/10.3390/su151813286
Submission received: 9 June 2023 / Revised: 13 July 2023 / Accepted: 14 July 2023 / Published: 5 September 2023
Browse Figure
Review Reports Versions Notes

Abstract

:
The cosmetics and personal care industry has, by its nature, contributed to global environmental issues such as climate change, waste, water scarcity, habitat destruction, and water and air pollution. Therefore, it is more important than ever for the cosmetics and personal care companies to be responsible and proactive in addressing environmental issues. Meanwhile, the complexity of the cosmetics and personal care industry has never been greater. The roles of not only brand companies but also OEM/ODM and retail companies are becoming increasingly important, and the boundaries are also collapsing. Despite the urgency of environmental issues, there has been a lack of research on specific and practical environmental activities of cosmetics and personal care companies, and the environmental responsibilities of OEM/ODM companies and retailers have been overlooked. Therefore, the need for this study was recognized. The purpose of this study was to expand the scope of assessment to include not only cosmetics brand companies but also OEM/ODM companies and retailers in general to identify the actual and concrete environmental activities being carried out. Therefore, in this study, the keywords cosmetics, environmental, eco-friendly, and sustainable, which have recently become the topics of discussion, were empirically analyzed. This study selected and analyzed 18 out of 28 annual reports, nonfinancial statements, and sustainability reports of 16 cosmetics- and personal-care-related companies. In addition, 456 articles were found through PubMed, Google Scholar, Google, and Scopus, and the final 108 articles were referenced using the PRISMA flow chart. The novelty of this study is, first, in the fact that it identified the actual and specific strategies and practices of cosmetics and personal care companies with respect to environmental issues. Second, it established common standards for environmental issues and compared corporate environmental activities. Third, this study included OEM/ODM companies and retailers, whose influence has been increasing in recent years, to understand the status of eco-friendly activities across the industry. This study makes a practical contribution by encouraging environmental activities in the cosmetics industry through comparing and evaluating the specific and practical environmental activities of not only brand companies but also OEM/ODM companies and retailers and laying the foundation for the development of a framework for environmental assessment. In addition, this study recognizes the need to study the environmental activity behavior of the cosmetics industry as a whole and contributes to the study of cosmetics companies’ environmental activities by suggesting how to use companies’ nonfinancial performance reports as materials to assess their actual environmental activities.

1. Introduction

According to IPCC assessment reports, global warming is accelerating due to greenhouse gas (GHG) emissions [1]. By 2050, the Earth may be uninhabitable [2]. The cosmetics and personal care industry is contributing to a range of global environmental issues such as climate change, waste, water scarcity, habitat destruction, and water and air pollution, yet many companies still lack an understanding of sustainability and integrated management of their value chain. [3,4].
Cosmetics and personal care products are consumer goods that people use in their daily lives. The impact on the global environment due to the characteristics of the cosmetics and personal care industry is as follows. Due to the nature of industries based on chemical components and chemical energy sources, a large amount of carbon is emitted at all stages, from raw material supply and demand to production, transportation, and disposal, and this amount is gradually increasing [5]. Even natural raw materials use a lot of energy in the cultivation and extraction stages. Shea butter emits 10.374 kg CO2 eq per kg in the previous stage from sourcing raw materials in the traditional way to being used as a finished cosmetic product [6]. It is also manufactured through energy-intensive process steps such as heating, cooling, and mixing during production. Plastics used as packaging materials also require a lot of energy during production and disposal. Energy is primarily sourced from fossil fuels such as coal and oil which cause carbon emissions. In addition, methane gas, the main culprit of greenhouse gases, is generated when landfill waste is improperly disposed of. It also generates a lot of greenhouse gases at the consumer use stage. Aerosol sprays have been shown to contribute to global warming [7]. According to the U.S. Environmental Protection Agency, one-third of landfill waste comes from the beauty industry, with 120 billion packaging units generated annually from beauty products [8]. The characteristics of cosmetics and personal care packaging materials often use plastic containers and tubes for storage and transportation and are often difficult to separate and dispose of because they are composed of various materials. In many cases, it cannot be reused or recycled, so it has a negative impact on the environment [9]. Above all cosmetics are mostly for personal use, and excessive specifications are often used to emphasize the luxuriousness of packaging materials. If it is not properly collected it is dumped into the soil or the sea, and if recycling is not possible, landfill waste is generated, which is a serious cause of environmental pollution according to the UNEP’s “Plastics in Cosmetics” reports on the current indiscriminate use of plastics in the cosmetics industry and the lack of management [10]. More stringent regulations are needed, and a lot of research needs to be conducted to convert plastic packaging into bio-based and biodegradable materials [11,12]. The cosmetics and personal care industries require significant amounts of water at all stages, including raw materials processing, manufacturing and consumption. Growing and processing raw materials such as palm oil or algae requires a lot of water, which can lead to water shortages in areas with limited water resources. In cosmetics and personal care production, formulation processing and equipment washing are essential and require a lot of water. On the other hand, cosmetics and personal care formulas have a lot of water. Cream formulas use 60–85% water, lotions up to 90%, and shampoos and shower gels use up to 95% water [13]. The production of plastic packaging also requires copious amounts of water. Consumers use water in the step of using products such as shampoo or body cleanser. Nonetheless, there is a lack of information transparency on water use [14]. Palm oil, a raw material for cosmetics, is threatening the Southeast Asian ecosystem by causing excessive deforestation and the use of chemicals such as pesticides. Palm oil certification, created to prevent excessive deforestation and protect forests, is insufficient to prevent deforestation and biodiversity loss. Eventually, many endangered species will lose their habitats [15,16]. Organic and inorganic UV filters, a key ingredient in many sunscreens and personal care products, have been shown to adversely affect marine life such as coral reefs and barnacles [17,18]. All substances have the potential to be toxic to humans as well as to other living organisms. However, most of them are safe when used in an appropriate method and amount [19]. Some chemicals used in cosmetics and personal care products, such as preservatives, surfactants, fragrances, sunscreens, and pigments, have been found to be toxic [20]. These substances are washed out of the human body with water and enter rivers, lakes, and seas through sewers. It is also thrown away in the nature as it is on a cotton pad. These chemical ingredients adversely affect the balance of the aquatic ecosystems. Poorly treated wastewater from the production of cosmetics and pollutants released to landfills during disposal also contribute to water pollution. Personal care product residues, including organic UV filters, are being detected in aquatic environments such as surface water, groundwater, and drinking water [21,22]. Microplastics are used in a variety of cosmetics and personal care products such as scrubs, exfoliants, toothpaste, hand sanitizers, shampoos, and soaps [23]. Microplastics that are less than 5 mm in size pass through filtration systems and flow into rivers, lakes, and oceans and are transported from ocean to ocean. They are ingested by aquatic animals such as fish and shellfish and consequently harms human health [19]. Microplastics have been found to spread even to pristine areas, affecting island life [24]. There is no European-wide ban yet, but the EU Commission has issued a legal proposal for a ban on microplastics in cosmetics in August 2022 [25]. Currently, the dangers of microplastics are well known, and microplastics have been gradually removed from product formulas [26,27] Air pollution causes a decrease in immune defense function, a decrease in the skin barrier, and an increase in inflammation and oxidative stress, which in turn cause premature aging [28] Fragrances used in cosmetics and personal care contain volatile organic compounds (VOCs), which interact with other particles in the air to form ozone and pollutants that are harmful to human health [29,30,31].
The Boston Consulting Group (BCG) surveyed British consumers in 2022, across 13 categories and more than 100 brands, and found that 76% of consumers would like brands to be more responsible and more proactive about sustainability. Consumers are paying more and more attention to what companies are doing about sustainability. This will be a key driver influencing the brand choice. Moreover, 57% of consumers said their perceptions of brands were influenced by sustainability practices, and 30% of consumers said they would change or endorse brands [32]. Recently, major cosmetics and personal care companies are establishing ESG strategies in connection with the United Nations Sustainable Development Goals (SDGs). Interest in the ESG principles is rapidly increasing. The ESG principles are disclosed through nonfinancial performance reports and can contribute to achieving the SDGs. Through the disclosure of a company’s transparent ESG strategy, it is possible to confirm the company’s progressive attitude toward achieving the United Nations Sustainable Development Goals (SDGs) [33,34]. Companies with more active IR activities have been shown to disclose more sustainability performance [35]. To encourage companies to be sustainable, an organized sustainability plan based on international standard disclosure guidelines is needed [36].
From 2020 until recently, research on sustainability in cosmetics has focused on CSR and its relationship to brands. The relevance and authenticity of CSR has been shown to influence brand trust [37]. In e-commerce, CSR activities have been shown to influence purchase intentions and customer loyalty [38]. It has been shown that CSR increases customer satisfaction, which contributes to a company’s reputation [39]. However, consumers’ understanding of CSR and CE is still low [40]. Sustainability-related stimuli influence brand attachment and brand attractiveness, generating positive WOM and enhancing intention to join a brand community [41]. Sustainable and eco-friendly packaging and marketing efforts have influenced purchase intentions [42]. Depending on the cosmetics category and consumer characteristics, sustainability labels can be effective [43]. There has also been research on ingredients, formulas, and packaging to develop sustainable products. There have been studies on reusing waste as cosmetic ingredients, optimizing formulas by evaluating them for health, ecosystem health, and the environment, using sustainable packaging and using bio-based and recyclable materials for sustainable packaging [44,45,46,47]. There have been studies on the best practices for sustainable product development [48]. Some studies evaluated sustainability in the entire cosmetics lifecycle and conclude that there are no 100% sustainable raw/packaging materials [49]. There have also been studies to identify the environmental impact of cosmetics in the production, consumption, and use stages, focusing on raw materials and packaging, and to propose improvements [50]. There is also a study that suggest ways to measure and reduce the amount of water consumers use when using rinse-off cosmetics [51]. Others have proposed strategies to increase sustainability across the cosmetics lifecycle [52]. One study showed that multinational cosmetics companies spend more efforts to improve their sustainability practices than their counterparts in developing countries, which needs to be improved [53]. An example of such efforts is how Unilever builds a network of business partners and conscientious companies [54]. However, there is a lack of studies from 2019 to 2023 that analyze environmental issues in the cosmetics industry through sustainability reports or nonfinancial performance reports. The first study was conducted to analyze the nonfinancial performance reports of eight major cosmetic multinational companies to determine whether these companies disclosed circular economy (CE) information and to identify each company’s CE strategy with the circular model and amount of information [55]. The second study was conducted to identify the contents and quality of circular economy and environmental information disclosed in the sustainability reports of major cosmetic brands. The contents of the sustainability reports of 26 cosmetic brand companies released between 2014 and 2019 were reclassified into the framework of the Climate Information Disclosure Standards Board (CDSB) to analyze whether the terms related to Circular Economy and Environmental Information were sufficiently exposed. As a result, it was found that CE was not properly reported in the areas of governance, strategy, management, and performance [56]. To date, little research has captured the actual and specific environmental activities of companies.
Previous studies on sustainability in cosmetics have shown that there is a need for research on corporate behavior. There are an absolute lack of research on the environmental behavior of companies. Companies actively promote their environmental efforts and commitments through various channels. However, in many cases, there is enough misleading information to cast doubt on their sincerity. Therefore, it is necessary to verify the authenticity of a company’s environmental activities and impose legal regulations [57]. In the literature, there is a lack of studies that identify the actual and specific environmental activities of companies. It is also difficult to find studies that compare and evaluate cosmetics and personal care companies on the same basis. Therefore, the purpose of this study is to (1) assess the actual and concrete environmental activities of companies, (2) identify the proactivity of companies by comparing and assessing their environmental activities with the same standards, and (3) expand the assessment to include not only brand companies but also OEM/ODM companies and retailers to understand the behavior of the entire industry and guide active environmental activities of cosmetics and personal care companies.

2. Methods

2.1. Material Identification, Screening, Eligibility, Included

2.1.1. Materials Identification

Research sources were found in the following way. The first step was to find the company’s annual report, nonfinancial statement, sustainability performance data, sustainability report, etc. Eighteen cases, including annual reports, nonfinancial performance, and sustainability reports, of 16 cosmetic and personal care related enterprises were utilized. Second, keywords such as cosmetics, environmental, eco-friendly, and sustainable were searched in PubMed, Google Scholar, Google, and Scopus. Through this, references, articles, reports, books, etc., were discovered that could establish the purpose and direction of this study and support the research results and discussions. As company reports have different disclosure dates, the most recently published data were used. References were selected that had contents qualified for this study.

2.1.2. Eligibility Criteria

The most recently published reports were used as the disclosure date varies from company to company. In addition, references and materials were selected for their eligibility for this study. These included studies on environmental issues related to cosmetics, sustainability related to cosmetics, studies on companies’ green or sustainability activities, and studies on sustainability reports of cosmetics.

2.1.3. Screening and Data Extraction

Various types of references were used, including research papers, review articles, books, magazine and news articles, reports from consulting firms, research firm data, and website information. References were applied only to cases in English, and university dissertations and dissertations, cases unrelated to this study, cases that were far from the topic or out of focus, and cases that could not be accessed were excluded.

2.1.4. Study Included and Data Extraction

This study used a descriptive review method. A PRISMA flow chart was used. Papers, articles, reports, etc., found through keyword searches in PubMed, Google Scholar, Google, and Scopus, and corporate sustainability-related reports, 108 out of a total of 474 were finally selected. Excluding the 18 corporate reports or data, 82 of the 90 references were to articles from 2020 or later. The PRISMA flow diagram is shown in Figure 1.

2.2. Assessment of Companies’ Environmental Activities

2.2.1. Assessment Companies

The environmental activities of major brands with enormous influence in the cosmetics and personal care markets are analyzed. In addition, three companies from each group are included and analyzed to look at the trend of environmental activities of OEM/ODM companies and retailers, whose influence has recently been growing. The first group is the top 10 cosmetics and personal care companies. According to Statista, a global market research company, the global cosmetics and personal care market size in 2021 was 503.59 billion U.S. dollars. The top 10 cosmetics and personal care companies were L’Oréal group, Unilever group, Estée Lauder Companies Inc., (New York, NY, USA), The Procter & Gamble Company (P&G) (Cincinnati, OH, USA), Shiseido Company (Tokyo, Japan), LVMH Moet Hennessy Louis Vuitton (Paris, France), Beiersdorf (Hamburg, Germany), Kao Corp., (Tokyo, Japan), Coty (New York, NY, USA), Johnson & Johnson (New Brunswick, NJ, USA). The global sales share of the top 10 was 25.3% [58]. The second group consists of OEM/ODM companies. Recently, small and medium-sized brands that are rapidly entering the market and leading growth are developing, producing, and launching brands and products through OEM/ODM companies. The global cosmetics OEM/ODM market size is projected to reach USD 30,328 million in 2022, growing at a CAGR of 5.26% during 2023–2028. In 2022, OEM/ODM companies in China, Europe, and North America accounted for 61.9% of sales. The cosmetics and personal care markets are the largest regions. The top 3 manufacturers were Cosmax, kdc/one, and Intercos [59]. Retail stores where cosmetics and personal care products are sold are classified into beauty specialist retailers, health and beauty retailers, and department stores. The world’s largest beauty specialist retailers are Ulta Beauty, Sephora, and Douglas, and health and beauty specialist retailers are Walgreen and Watson. Ulta Beauty, Sephora, and Douglas, whose sales are concentrated in cosmetics and personal care, were selected [60].

2.2.2. Environmental Activity Assessment Items

There are 4 analysis items. First, what environmental issues does each company care about and act on? Second, do the company have concrete mid- to long-term targets, goals, and commitments for each issue? Is the basis for the goal clear? It is limited to concrete quantitative goals, excluding simple instructions or activity lists. Determine if a third party has verified the target. Third, is the progress of the company being transparently disclosed? Are there performance data? It also finds whether international standards are being used. There are GRI, TCFD, and SASB as international standards. GRI (Global Reporting Initiative) provides guidelines for sustainability management reporting in the economic, environmental, and social sectors to all companies and stakeholders. The GRI guidelines have been used by more than 10,000 organizations in over 100 countries [61]. TCFD (Task Force on Climate-Related Financial Disclosures) is a task force launched to create guidelines for disclosing the financial impact of the climate crisis on companies. In 2017, TCFD issued Recommendations to disclose climate risk information according to four key climate change factors: governance, strategy, management, and measurement and objectives. This means that climate change is not simply viewed from the perspective of environmental protection but recognized as a necessary factor for corporate risk management [62]. SASB (Sustainability Accounting Standards Board) is composed of standards for 77 industries, so it is possible to compare the performance of companies on important ESG issues by industry [63]. Fourth, has the company been continuously performing challenging environmental activities? Has an authoritative third party certified it? In this study, CDP is adopted to objectively compare and evaluate the activities of the cosmetics and personal care related companies. CDP is a global climate change project that is being implemented in 90 countries around the world. More than 18,700 companies around the world disclosed their greenhouse gas (GHG) emissions, climate-change-related crises and changes, and carbon management strategies through CDP in 2022. The evaluation results are available on the CDP website [64]. Responses to CDP and evaluation results (climate change, forest, water) are checked for 3 years.

3. Results

3.1. Each Company’s Main Environmental Issues

Each company has different standards for classifying environmental issues and setting them up as tasks. Table 1 summarizes the environmental targets, goals, and commitments based on each company’s standards [26,27,65,66,67,68,69,70,71,72,73,74,75,76,77,78,79,80]. Table 2 compares companies’ top environmental issues recategorized into seven issues: climate (+energy), packaging, sourcing (+deforestation), water, waste, formula, and pollution. This recategorization applies only to cases directly expressed as targets, goals, and commitments. The top 10 cosmetics and personal care companies are interested in various environmental issues. However, there is a lack of concrete targets for formulas and pollution (see Table 3).
The top three OEM/ODM companies have concrete goals and plans for climate change, water, and waste related to manufacturing but not enough for packaging, sourcing, and formulation related to product development. While the three retailers lack concretion in their stated goals, they are actively engaged in environmental efforts from a brand and customer perspective (see Table 4). However, all three retailers lack concretion in their own environmental goals and plans. A detailed approach is needed for environmental issues arising from retail business operations, such as a lot of energy and waste generated during store operation, logistics, and transportation. Recently, as all three retailers develop and sell PB brands (SEPHORA COLLECTION, Ulta Beauty Collection®, and DOUGLAS Essentials), environmental issues from the manufacturing point of view should also be actively pursued. Sephora is a subsidiary of LVMH, and there are goals for the entire group, but Sephora does not have anything concrete. As Sephora is an influential retailer, separate disclosure of information is necessary. Companies are setting up environmental goals tailored to their business circumstances in connection with the UN’s Sustainable Development Goals (SDGs). The environment has become the focus of the ESG strategy.

3.2. Corporate Goals and Bases for the Environment Issue

Most of the 16 companies set concrete mid- to long-term goals for various environmental issues. However, they are hard to compare because the way goals are expressed varies from company to company (see Table 1 and Table 2). Climate change is the most important environmental activity of all 16 companies. The goal of all companies is to reduce greenhouse gas (GHG) emissions. Table 5 summarizes the goals, basis, progress, and data to reduce greenhouse gas (GHG) emissions. The 14 companies are based on the goals verified by SBTi. The SBTi (science-based targets initiative) provides services (method development and consultation) and approval of reduction targets necessary for companies to set greenhouse gas (GHG) emission reduction targets based on science to achieve the target of 1.5 °C of the Paris Agreement [87]. Cosmax has been verified by DNV Business Assurance Korea. No basis is found for Sephora’s goal. Excluding kdc/one and Ulta Beauty, the 14 companies present their greenhouse gas (GHG) emission goals quantitatively. Next to climate change, the main environmental issue for companies is packaging. Each company’s packaging goals are summarized in Table 6. The 13 companies present quantified, concrete goals based on their own standards. It is difficult to compare the goals of the 13 companies because they have different goals and standards. Common goals and standards are needed for packaging issues.

3.3. Transparency of Environmental Activities

Regarding greenhouse gas (GHG) emissions, the top 10 cosmetics and personal care companies shared progress and performance data up to Scopes 1, 2, and 3 (see Table 5). The eight companies are based on TCFD (see Table 1). The OEM/ODM companies also shared process and performance data. Cosmax and Intercos are based on TCFD. Among retailers, only Ulta Beauty had progress and performance data, based on TCFD (see Table 1 and Table 5). Of the 13 companies with goals for packaging, only eight had progress and performance data. Most are the cosmetic and personal care companies. However, performance data were not sufficient. The OEM/ODM companies and retailers did not disclose progress and performance data (see Table 6).

3.4. Objective Certification through Third-Party Organizations

The sincerity and positivity of a company’s environmental activities can be compared through the response to CDP’s request, evaluation results, and improvement over the past three years (see Table 7). The top 10 cosmetics and personal care companies are consistently responding to CDP requests and the results are improving. Among the three OEM/ODM companies and the three retailers, there are only two companies with evaluation results in response to CDP requests. Sephora is a subsidiary of LVMH, so there is no separate evaluation result. The group annual report discloses information on the entire retail business, but there is no separate information on Sephora. Active participation of OEM/ODM companies and retailers is needed.

4. Discussions

4.1. Expansion of Company Scope and Need for Active Activities

The environmental issues are global challenges that must be resolved for the survival and prosperity of humankind. All companies must actively take part in the UN’s 2030 Sustainable Development. In connection with the 17 Sustainable Development Goals (SDGs), concrete goals and roadmaps must be set up and executed [88]. OEM/ODM companies and retailers are becoming increasingly important in the cosmetics and personal care industry. Their active role must be demanded. OEM/ODM companies do not have direct consumer exposure like brands and retailers. Therefore, it is easy to be overlooked in the interest. Companies should voluntarily engage in environmental activities and disclose information transparently. Retailers are constrained by their position at the end of the supply chain, making it difficult to drive change. In 2022, a survey by Bain & Company found that only one in ten retailers had a leading approach to the ESG principles [89]. Sephora, Ulta Beauty, and Douglas have created their own ingredient standards, leading brands to switch to safer, cleaner formulations and educating consumers about unsafe ingredients. Retailers are now extending their standards to eco-friendly and launching campaigns (see Table 4). While these campaigns are expected to play a large role in the transition to eco-friendly products, they can also be abused for greenwashing for corporate profits, requiring responsible behavior by companies and active management and supervision by third parties. Companies are actually using environmental messaging in advertising and public relations to cover up their environmentally harmful behavior in favor of business [90,91,92]. Meanwhile, retailers have recently developed their own brands and the role of brands/manufacturers is increasing. Therefore, the responsibility and role as a manufacturer must be performed.

4.2. Major Roles of Brands, OEM/ODM, and Retailers

The roles of the three groups are as different as their business characteristics are different. Cosmetics and personal care companies, as well as OEM/ODM companies, should pay more attention to product formulas and ingredients. Toxic ingredients in personal care products contaminate groundwater through underdeveloped and inefficient sewers, adversely affecting humans and freshwater animals [93]. Recently, many companies have been disclosing information on ingredients. In 2019, L’Oréal launched the Inside our products website. It provides information on more than 1300 ingredients used in product formulas [94]. The focus is on the safety and efficacy information of ingredients. Active disclosure of information on the environmental impact of ingredients is needed. Companies should share information with a sense of responsibility and sincerity about environmental issues, not to promote a favorable position [57]. Disadvantageous information should not be disclosed, and continuous monitoring should be conducted to ensure that favorable information is being used without any legal problems. It is worth examining whether adequate regulations are in place and whether they need to be supplemented [95]. OEM/ODM companies are developing products for small and medium-sized brand companies. For small and medium-sized brand companies to self-digest environmental activities, significant investment in research and development, equipment, and personnel is needed. OEM/ODM companies should develop eco-friendly formulas or packages that small and medium-sized brand companies can use at low cost and share environmental knowledge and ability. It should be given a role as an open innovation community to support the environmental activities of small and medium-sized branded companies [96]. Retailers should actively nurture companies that meet environmental standards. Sephora is currently introducing the Sephora Accelerate program. It nurtures new companies and induces existing companies to come into environmental standards. In addition, sustainable product labels are created so that consumers can find them [97]. Through these labels, consumers are encouraged to purchase environmentally friendly products. However, there are too many eco-friendly certifications other than the labels developed by retailers, and each has different standards, making it difficult for consumers to understand. A common framework needs to be developed [98]. Cosmetics and personal care companies, OEM/ODM companies, and retailers all need to think more about packaging. Compliance with environmental packaging principles is still in its infancy [99]. Environmental packaging strategies are needed from various aspects such as user perspective and material choice [100,101]

4.3. The Importance of Authenticity, Transparency, and Objectivity

According to the “Skin Deep Beauty” report by Providence, 90% of consumers considered sustainability when buying beauty and wellness products, but a lack of transparency made it difficult for 79% to trust brands’ claims. More than 85% of survey participants trusted independent verification organizations. In terms of sustainability, social media content creators lacked influence, and certified logos were preferred [102]. To secure objectivity, a common evaluation framework is needed [103]. Objective results of environmental activities on climate change, sourcing, and water can be checked through CDP. It is also possible to compare activities between companies. A common framework that can objectively evaluate plastic packaging, which is the main environmental issue in the recent cosmetics and personal care industries, must be developed.

4.4. Need to Introduce Common Environment Management Framework

To achieve the United Nation’s Sustainable Development Goals (SDGs), each company’s role and active action are needed [35]. Sustainability in the cosmetics and personal care industries has complex and multifaceted aspects [104]. Therefore, each company sets up and implements an environmental strategy suitable for its characteristics. As a result, it is difficult for consumers and interested parties to objectively evaluate with standards. In early 2022, the EcoBeautyScore Consortium was launched. The main goal was to develop a common environmental impact assessment system for cosmetics. It aimed to enable consumers to make more informed purchase decisions. The consortium includes 71 stakeholders in the cosmetics industry. The first prototype of the system is scheduled for completion in 2023 [105]. The top 10 cosmetics and personal care companies have all signed up. Only Intercos among OEM/ODM companies and Walgreens Boots among retail companies have taken part. More brand companies, OEM/ODM companies, and retailers should be encouraged to actively take part.

4.5. Encourage Consumers to Buy Eco-Friendly Products

Corporate environmental activities are costly. There is enough consumer demand for eco-friendly products to make a profit. Only then will a virtuous cycle of investing in environmental activities be created. First, it is necessary to provide consumers with more information to raise awareness of eco-friendly products [106]. However, consumers may prioritize affordability, accessibility and availability over environmental friendliness. Moreover, the low efficacy of products can be a barrier to sustainable purchasing intentions [107]. Therefore, measures to lower the hurdles for eco-friendly products such as insufficient product information, lack of variety, low quality, and cost are also necessary. As a result of a Bain & Company survey, one in five US consumers expected retailers to help them with sustainable shopping by lowering costs, raising awareness, and providing sufficient information about the products in stores [89].

4.6. Government Intervention

Government’s role is important. To induce active environmental activities of companies, tax incentives or financial support should be provided. In addition, strict management supervision is required, such as paying very large fines for corporate greenwashing. Governments should develop environmental legislation and related systems for the cosmetics and personal care industry and support and increase investment in companies [108].

4.7. The Novelty, Its Practical/Theoretical/Methodological Contribution

The novelty of this study is, first, in the fact that it identified the actual and specific strategies and practices of cosmetics and personal care companies on environmental issues. Second, it established common standards for environmental issues and compared corporate environmental activities. Third, this study included OEM/ODM companies and retailers, whose influence has been increasing in recent years, to understand the status of eco-friendly activities across the industry.
We expect this study to contribute from three perspectives. The first perspective is practical. This study did not only assess the authenticity, transparency, and objectivity of each cosmetics and personal care company’s environmental activities but also provided a basis for cross-company comparisons to pressure the industry to take action [35,36,57]. This perspective is significant because it encourages the environmental activities of OEM/ODM companies and distributors, which have been neglected despite their growing influence, and lays the groundwork for the need to develop common standards and frameworks for monitoring the environmental activities of companies involved in cosmetics and personal care [105]. The second perspective is theoretical. We identified a significant lack of prior research on the sustainability activities of cosmetics and personal care companies [55,56]. Given the urgency of environmental issues, more research on corporate behavior should be conducted. Research of the environmental activities of the cosmetics industry should be conducted in parallel. This perspective is significant because it suggests a need and direction for research on the environmental activities of companies. The third perspective is methodological. In the past, evaluating a company’s environmental activities was not easy [104]. As the ESG principles have become increasingly important, companies have begun to proactively disclose nonfinancial performance such as sustainability. Meanwhile, as companies actively engage with the UN’s SDGs, their sustainability reports have begun to be framed within the framework of the UN SDGs [33,34,35]. As a result, it became possible to evaluate and compare the environmental activities of companies, although not sufficiently, and this study proposed a method of utilizing nonfinancial performance reports of companies as a material for evaluating the actual environmental activities of the companies. This report also contributes to future research by developing a framework for comparing and evaluating companies’ actual and concrete behavior towards the environment [105].

5. Conclusions

Therefore, in this study, the cosmetics and personal care companies (brands, OEM/ODMs, retailers) are more encouraged to take responsibility and roles in environmental issues and suggest the direction the entire industry should go in the future. Because the three company groups have distinctive characteristics, they have different key roles for the environment and should be more proactive. This is necessary to secure future-oriented goals, transparency of progress, and objectivity of results. In addition, the industry should set up a framework for environmental management indicators and evaluation standards. Limitations of this study: First, this study focuses on information that is publicly available on the companies’ websites, such as annual reports, nonfinancial statements, or sustainability reports. The absence of published goals, targets, or commitments, or the lack of sufficient information being disclosed, does not mean that the company is not doing enough to manage the environment. Because this study is based on open-source information, there may be gaps in the data on the actual company’s goals, plans, and actions. Second, because each company has a different timeframe for report disclosure, comparisons at the same point in time are limited. There is an overwhelming lack of studies on the actual and specific environmental activities of cosmetics and personal care companies, so further research is needed. It is necessary to study and update corporate actions on a regular basis to stimulate companies. This study analyzed 16 of the most influential brand/ODM/retail companies, whose market influence is large but still limited. It is necessary to understand the environmental activities of small and medium-sized companies. Finally, there is a need to study consumer attitudes and behaviors toward the environment. Most consumer environmental activities have been studied from a branding and marketing perspective. There is a need for research that drives consumer environmental behavior from a different perspective.

Author Contributions

Writing: original draft preparation, H.Y.L.; writing: review and editing, H.Y.L.; supervision, K.H.K. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 15 13286 g001
Figure 1. PRISMA flow diagram for the literature review.
Figure 1. PRISMA flow diagram for the literature review.
Sustainability 15 13286 g001
Table 1. The environmental targets, goals, and commitments based on each company’s standards.
Table 1. The environmental targets, goals, and commitments based on each company’s standards.
CompanySourcesTargets, Goals, CommitmentsStandards
L’Oréal, Clichy,
France		2022 Universal,
Registration Document [65]		Climate (GHG, Energy), Water (Water, All Aquatic Ecosystems), Biodiversity (Sourcing, Deforestation), Resources (Formula, Package, Store, Waste)GRI
TCFD
SASB [81,82,83]
Unilever, London, UKAnnual Report and Accounts 2022 [49,66]; Sustainability Performance Data [67]Climate Action (GHG), Protect and Regenerate nature (Deforest, Sourcing, Water, Formula), Waste-Free World (Plastic Package, Waste)TCFD
Estée Lauder, New York, NY, USAFiscal 2022 Social Impact and Sustainability Report [68]Climate and Energy, Water, Sourcing (Biodiversity), Packaging, Ingredient TransparencyGRI
TCFD
SASB
P&G, Cincinnati, OH, USA2022 Citizenship Report [69]Climate (GHG, Energy), Waste (Package, Waste), Water, Nature (Sourcing, Deforestation)TCFD
Shiseido, Tokyo, JapanSustainability Report 2021 [70]Reducing Our Environmental Footprint (CO2, Water, Waste), Developing Sustainable Products (Packaging, Formula/Ingredients), Promoting Sustainable and Responsible Procurement (Palm Oil, Paper)TCFD
Beiersdorf, Hamburg, GermanySustainability Highlight Report 2022 [26]
Beiersdorf-NFS-2022 [71]		For a Climate Care Future (GHG, Energy), For Fully Circular Resources (Formula, Package, Waste), For Sustainable Land Use (Sourcing), For Regenerative Water (Water, Formula)GRI
TCFD
LVMH, Paris, France2022 Annual Report [72]Biodiversity (Sourcing, Forest), Circular Design (Package), Traceability/Transparency, Climate (GHG, Energy)GRI
TCFD
Kao, Tokyo, JapanSustainability Report 2022 [73]Decarbonization, Zero Waste (Package, Waste), Water Conservation, Air and Water Pollution Prevention, Responsibly Sourced Raw MaterialsGRI
TCFD
Coty, New York, NY, USAFY22 Sustainability Report [74]Package, Sourcing, GHG, EnergyISAE3000 [84]
Johnson& Johnson, New Brunswick, NJ, USA2021 Health for Humanity Report [75]GHG, EnergyGRI
SASB
COSMAX, Seongnam, South Korea2022 Sustainability Report [27]Formula, Packaging, SourcingGRI
TCFD
SASB
kdc/one, Quebec, CanadaEnvironmental, Social, Governance Report 2021 [76]Energy, GHG, Water, WasteGRI
Intercos, Agrate Brianza, ItalyConsolidated Nonfinancial Statement 2022 [77]Formula, GHG, Sourcing, WasteTCFD
GRI
Sephora, Paris, Francewww.inside-sephora.com/en/, accessed on 30 May 2023. [78]Climate, Sourcing, Eco-Design and Product Transparency, Reduce–Reuse–Recycle
Ulta Beauty, Bolingbrook, IL, USA2021 Environmental, Social and Governance Report [79]Reducing Emissions, Sustainable PackagingTCFD
SASB
Douglas, Düsseldorf, GermanySustainability Report 202 [80]GHG, Formula, PackagingGRI
SASB
GHG: greenhouse gas.
Table 2. Each company’s targets, goals, and commitments reclassified into the seven environmental issues.
Table 2. Each company’s targets, goals, and commitments reclassified into the seven environmental issues.
CompanyTargets, Goals, and Commitments
Climate/
Energy		PackagingSourcingWaterWasteFormulaPollution
L’Oréal, Clichy,
France		●●●●●●
Unilever, London, UK●●●●●●
Estée Lauder, New York, NY, USA●●●● ○
P&G, Cincinnati, OH, USA●●●●●
Shiseido, Tokyo, Japan●●●●●●
Beiersdorf, Hamburg, Germany●●●●●●
LVMH, Paris, France●●●
Kao, Tokyo, Japan●●●●● ●
Coty, New York, NY, USA●●● ●
Johnson & Johnson, New Brunswick, NJ, USA●
COSMAX, Seongnam, South Korea ●● ●
kdc/one, Quebec, Canada●○ ●●
Intercos, Agrate Brianza, Italy● ● ●○
Sephora, Paris, France◐○○ ○
Ulta Beauty, Bolingbrook, IL, USA○●
Douglas, Düsseldorf, Germany●○○ ○
● Quantitative goal; ◐ nonquantitative goal; ○ no goal, but a plan.
Table 3. The targets, goals, and commitments for formulas and pollution.
Table 3. The targets, goals, and commitments for formulas and pollution.
CompanyTargets, Goals, Commitments
L’Oréal, Clichy, France2030: Evaluate all formulas thanks to our environmental test platform
Unilever London, UK2030: 100% of our ingredients will be biodegradable
Estée Lauder, New York, NY, USA2025: Develop a glossary and provide information about the uses of ingredients
Shiseido, Tokyo, JapanReduce our environmental and social impact by using sustainably sourced raw materials
Beiersdorf, Hamburg, Germany2023: Eucerin 100% free of microplastics
2021: Nivea 100% free of microplastics
2025: 100% biodegradable polymers in our European product formulations
Kao, Tokyo, Japan2025: 100% of factories which disclose VOC and COD emissions
COSMAX, Seongnam, South Korea2030: Microplastic-free suspension of production of existing products; discontinuity of raw materials
Intercos, Agrate Brianza, ItalyCreation of products qualified based on the environmental and ethical profile, strengthening the compliance of new formulations with our Clean List.
Ulta Beauty, Bolingbrook, IL, USAMonitor the landscape of trusted ingredients and ingredients
Douglas, Düsseldorf, GermanyClean products that are free from certain criticized ingredients
VOC: volatile organic compound; COD: chemical oxygen demand.
Table 4. The three retailers’ own environmental standards.
Table 4. The three retailers’ own environmental standards.
RetailerEnvironmental StandardsReference
Sephora, Paris, FranceClean + Planet Positive Standards
Clean: the avoidance of certain ingredient to be harmful to human health and the environment.
Responsible packaging:
100% of products must reduce and eliminate all unnecessary material.
Design for recyclability (2021: 50%~, 2023: ~75%, 2025: 90%)
Reimagine of core brands assortment (2021: 50%, 2023: 75%, 2025: 100%)
−30% PCR, biomaterials, 75% recycled, refillable, FSC-certified, etc.)
Climate commitments must (meet at least one)
100% renewable energy, GHG reduction targets and action plan, carbon-neutral operations
Sustainable sourcing (must meet all)
100% of palm oil and palm kernel oil, MICA; by 2022, zero microplastics and 100% cruelty free
Environmental giving: committed to giving AT LEAST 1% OF PROFIT		[85]
Ulta Beauty, Bolingbrook, IL, USAConscious Beauty at Ulta BeautyTM
Clean ingredients, cruelty free, vegan, sustainable packaging (50% recycled packing, 30% PCR for cosmetic compact lids), positive impact (highlight brands with philanthropic efforts)		[79]
Douglas,
Düsseldorf, Germany		Clean Beauty Guide
Free from cyclic silicones, parabens, harsh sulfates, mineral oils, ethanolamine, synthetic fragrances (<1%), phthalates, formaldehydes and formaldehyde releaser, PEGs, chemical SPF
cruelty-free		[80,86]
Table 5. The goals, basis, progress, and data to reduce greenhouse gas (GHG) emissions.
Table 5. The goals, basis, progress, and data to reduce greenhouse gas (GHG) emissions.
CompanyTargets, Goals, CommitmentsBasisProgressData
L’Oréal, Clichy, France2025: Scopes 1, 2—carbon neutrality (vs. 2016)
2030: 25% reduction per finished product
(tCO2 eq/kg of formulas sold) (vs. 2016)		SBTi2022: 65%
2022: −24%		Scopes 1, 2, 3
Unilever, London, UK2030: Scopes 1, 2—zero (vs. 2015)
2039: Scopes 1, 2, 3—net zero (vs. 2015)		SBTi2022: 34.31
2022: −68%		Scopes 1, 2, 3
Estée Lauder, New York, NY, USA2030: Scopes 1, 2—50% reduction (vs. 2018)
Scope 3—60% reduction (vs. 2018)		SBTiFY2022: 54%Scopes 1, 2, 3
P&G, Cincinnati, OH, USA2030: Scopes 1, 2—50% reduction (vs. 2010)
2039: Scope 3—net zero		SBTiFY 2022: 57%Scopes 1, 2, 3
Shiseido, Tokyo, Japan2026: Carbon neutral
2030: Scopes 1, 2—46.2% reduction (vs. 2019)
2030: Scope 3—55% reduction (vs.2019)		SBTiPlan to disclose in 2023Scopes 1, 2, 3
Beiersdorf, Hamburg, Germany2025: Scopes 1, 2, 3—30% reduction (vs. 2018)
2030: 100% climate-neutral production sites		SBTi2022: 17%
2022: 7%		Scopes 1, 2, 3
LVMH, Paris, France2026: Scopes 1, 2—50% reduction (vs. 2019)
2030: Scope 3—55% reduction/protection		SBTi2022: 11%
2022: 77%		Scopes 1, 2, 3
Kao, Tokyo, Japan2030: Scopes 1, 2—55% reduce (vs. 2017)
2030: 22% reduction in absolute full lifecycle (vs. 2017)		SBTi2022: 20%
2022: 4%		Scopes 1, 2, 3
Coty, New York, NY, USA2030: Scopes 1, 2—50% reduction (vs. 2019)
2030: Scope 3—28% reduction (vs. 2019)		SBTiFY2022: 70.6%Scopes 1, 2, 3
Johnson & Johnson, New Brunswick, NJ, USA2030: Carbon neutrality
Scopes 1, 2—60% reduction (vs. 2016)
2030: Scope 3—20% reduction (vs. 2016)		SBTi2021: 50%Scopes 1, 2, 3
COSMAX, Seongnam, South Korea2025: Scopes 1, 2—25% reduction (vs. 2017)
2030: Scopes 1, 2—30% reduction (vs. 2017)		DNV Business Assurance Korea2021: 27%
2021: 23%		Scopes 1, 2, 3
kdc/one, Quebec, Canada2025: Trace 100% of Scope 1 and Scope 2 to renewable energySBTiFY 2022: 100% of Scopes 1, 2’s emissions from manufacturing sites offset with renewable energyScopes 1, 2
Intercos, Agrate Brianza, Italy2025: Scopes 1, 2—20% reductionSBTi2022–2022:
−32%		Scopes 1, 2
Sephora, Paris, France2026: 50% reduction (stores, headquarters, distribution center)
Ulta Beauty, Bolingbrook, IL, USA2× renewable energy credits commitment in 2022SBTi2021:
SBT setting		Scopes 1, 2, 3
Douglas, Düsseldorf, Germany2025: Scopes 1, 2—carbon neutral
FY2022/23: Roadmap for Scope 3		SBTi Scopes 1, 2, 3
SBTi: science-based targets initiative.
Table 6. The targets, goals, progress, and data for packaging.
Table 6. The targets, goals, progress, and data for packaging.
CompanyTargets, Goals, CommitmentsProgressData
L’Oréal, Clichy, France2030: 100% of the plastic package from recycled or biobased sources (50% by 2025)2022: 26%Recycled material
2030: 20% reduction in intensity the quantity of packaging used for our products (vs. 2019)2022: −3%
2025: 100% refillable, reusable, recyclable, or compostable plastic packaging2022: 30%
Unilever, London, UK2025: 25% recycled plastic2022: 21%Recycled plastic
2025: 50% virgin plastic reduction by 20252022: −13%
2025: 100% reusable, recyclable, or compostable plastic packaging2022: 55%
2025: Collect and process more plastic than we sell2022: 58%
Estée Lauder, New York, NY, USA2025: recyclable, refillable, reusable, recycled, or recoverable packaging (75–100%)FY2022: 63%Total weight of product package
2025: increase PCR material to 25% or more.FY2022: 17%
2030: reduce 50% virgin petroleum contentFY2022: 87%
2025:100% of our forest-based fiber cartons FSC-certifiedFY2022: 95%
P&G, Cincinnati, OH, USA2030: 100% recyclable or reusable consumer packagingFY2022: 79%Plastic packaging
Recycled plastic resin
2030: 50% reduction in virgin petroleum plastic (vs.2017)FY2022: 8%
100% of our paper packaging to be either recycled or third-party-certified virgin contentFY2022: 99%
2025: 50% of our virgin paper packaging is FSC™-certifiedFY2022: 68%
Shiseido, Tokyo, Japan2025: 100% sustainable packaging for sale of product with plastic packaging.2022: 64%
Beiersdorf, Hamburg, Germany2025: 100% of refillable, reusable, recyclable2022: 67%Fossil-based virgin plastic
2025: 30% recycled material (vs. 2019):2022: 10%
2025: 50% reduction in fossil-based virgin plastic (vs. 2019)2022: 15%
LVMH, Paris, France2026: Zero fossil-based virgin plastic (vs. 2019)
2030: 100 % of new products covered by a sustainable design		2022: 8% reductionWeight of packaging
Kao Tokyo, Japan2030: to begin decline Quantity of fossil-based plastics2021:104 thousandPlastic package
Plastic in refill replacement
2030: 300-million quantity of innovative film-based packaging penetration for Kao and others per annum2021: 11 million
2030: % of recycled plastic (to disclose in 2023)2021: 1%
2025: Product-launch practical use of innovative film-based packaging made from collected pouches2021: product launch
2025: 100% of recycled plastic in PET containers (Japan)2021: 19%
Coty, New York, NY, USA2025: 100% folding box boards made with FFSC- or PEFC-certified material
2030: 20% reduction in packaging (vs. 2019)
2030: 30% usage of PCR materials		New target set in FY22.
COSMAX, Seongnam, South Korea2025: 100% of recycled plastic
kdc/one, Quebec, Canada2025: 100% reusable or recyclable packagingRollout startedType of package
Ulta, Ulta Beauty, Bolingbrook, IL, USA2025: 50% of packaging will be recyclable, refillable, or made from recycled or bio-sourced materials
Douglas, Düsseldorf, Germany2030: 50% of all new Douglas brands products will be using recycled material
PCR: post-consumer recycled.
Table 7. The CDP evaluation results for 3 years (climate change, forest, and water).
Table 7. The CDP evaluation results for 3 years (climate change, forest, and water).
CompanyClimate ChangeForestsWater Security
202020212022202020212022202020212022
L’Oréal, Clichy, FranceAAAAAAAAAAAA-AAA
Unilever, London, UKAAAA-A-A-AAA-AAA-AAA-
Estée Lauder, New York, NY, USAAAA-A-BA-BA-BA-A-A
P&G, Cincinnati, OH, USABA-A-No
response		BA-BA-BBB
Shiseido, Tokyo, JapanBA-A-No responseBA-BA-BBB
LVMH, Paris, FranceBA-ABBBBA-A-A-AAABA-A
Beiersdorf, Hamburg, GermanyAA-AA-ABAABBA
Kao, Tokyo, JapanAAAAA-AAAAAAA
Coty, New York, NY, USAA-BBNo responseNo responseNo responseNo responseNo responseNo response
Johnson &Johnson, New Brunswick, NJ, USAAAAA-BA-BBBAA-A-
Sephora, Paris, France
Ulta beauty, Bolingbrook, IL, USANo
response		No
response		CNo responseNo responseNo response
Douglas, Düsseldorf, GermanyNo responseNo responseNo response
COSMAX, Seongnam, South KoreaSubmitted
Unavailable		BBNo responseNo responseNo responseNo responseNo responseB-
kdc/one, Quebec, Canada Submitted
Unavailable		Submitted
Unavailable		 Submitted
Unavailable		Submitted
Unavailable
Intercos, Agrate Brianza, Italy
Awareness (C-/C score), management (B-/B score), leadership (A score). Submitted: submitted a response to some or all questions. No response: did not reply to CDP regarding the request.
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Lim, H.Y.; Kwon, K.H. Sustainable Assessment of the Environmental Activities of Major Cosmetics and Personal Care Companies. Sustainability 2023, 15, 13286. https://doi.org/10.3390/su151813286

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Lim HY, Kwon KH. Sustainable Assessment of the Environmental Activities of Major Cosmetics and Personal Care Companies. Sustainability. 2023; 15(18):13286. https://doi.org/10.3390/su151813286

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Lim, Hea Young, and Ki Han Kwon. 2023. "Sustainable Assessment of the Environmental Activities of Major Cosmetics and Personal Care Companies" Sustainability 15, no. 18: 13286. https://doi.org/10.3390/su151813286

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