ChainPoint recently had the opportunity to present at the Sustainable Cosmetics Summit held by Organic Monitor in Paris. The topic of our presentation was: “Using information technology to make cosmetics supply chains more sustainable”. Below we have gathered 7 key take-aways from the Sustainable Cosmetics Summit that not only relate to cosmetics but also to many consumer goods industries.
1/ Supply chain transparency is key to tackling sustainability issues for cosmetics companies
Like other consumer goods companies, cosmetics brand owners and manufacturers are increasingly going beyond their own walls to measure and reduce their environmental and social impacts. Indeed, study after study proves that often times most of the impacts lie in the supply chain, and that there are some efficiencies and cost reduction opportunities to be seized by tackling these impacts. So transparency and traceability in the supply chain were firmly on the agenda of the conference.
Mapping your suppliers creates a better overview of the risks upstream
2/ Natural ingredients and packaging materials are front and center
With natural ingredients often ticking boxes in terms of lower health and environmental impact, cosmetics companies are racing to innovate in this area. This can be witnessed by a persistent trend of large traditional brand owners buying natural cosmetics companies.
Plant-based ingredients are growing in popularity and use, for anti-pollution skincare among others. Examples of plant-based ingredients growing in popularity include:
- algae and seaweed, which has prompted the Marine Stewardship Council and the Aquaculture Stewardship Council to jointly work on an upcoming standard on sustainable seaweed
- food waste-based ingredients such as grape pomace, which is a by-product of wine production that is rich in anti-aging components.
There were also many discussions on sustainable packaging, and one key trend is the increased use of bio-based plastics from renewable materials.
3/ Natural focus brings new sustainable sourcing challenges
However as it turns out when evaluating overall impact with for example a lifecycle assessment method, natural options are not always the best. Some synthetic ingredients or packaging materials actually have less environmental impact. In some other cases, genetically-modified bacteria used in controlled environments can produce new, useful ingredients. Lastly, increased sourcing of natural ingredients can amplify social issues in the supply chain, such as child labor in the mica industry.
So cosmetics brand owners have a responsibility to educate consumers, who tend to focus heavily on the environmental impact of packaging, about other important issues such as sustainable sourcing and about possible solutions.
Mica sourcing can be linked to child labour in India's mica mines
4/ Ethical sourcing of biodiversity
Some of the natural ingredients that are increasingly used are extracts from rare plants from biodiversity hotspots. Some natural ingredient supply chains have actually been designated as being in jeopardy by the United Nations Convention on Biological Diversity. Therefore preserving biodiversity as well as sharing benefits of access to these ingredients with local communities, as stipulated by the Nagoya Protocol, is vital to ensure future supply.
5/ The need for collaboration to succeed
Given the complexity of some of the sustainability issues in cosmetics, especially those related to supply chain transparency, pre-competitive collaboration initiatives are an important part of the solution. For some commodities such as palm oil or shea nuts, it is simply too difficult and costly for retailers and brand owners to trace back where they come from on their own. An industry-wide initiative called Beauty 2030 was mentioned, and one of its 4 focus areas is traceability.
6/ Increased consumer demand for authenticity brings storytelling to the forefront
The increased need for supply chain transparency is largely driven by consumer demand and the rise of social media. During the conference there were many discussions about the need to be authentic to gain consumer trust. Some examples included being more open about some product innovations that did not work and what was learnt through that experience, and also using real facts about the origin of ingredients and the production phases. So storytelling based on real-time, dynamic data was a key topic.
Consumers demand more transparency and information.
7/ Need for standardization of assessment tools and centralized information sharing platform
Finally participants discussed consumer confusion due to the proliferation of natural, organic, or sustainable labels on packaging, and supplier fatigue due to multiple reporting requirements from their customers. There is definitely a need in the cosmetics industry for standardization of supplier assessment methodologies, labels, as well as centralized software platforms such as ChainPoint to share information and collaborate.
Many trends that were discussed can be directly related to the work we do at ChainPoint
ChainPoint’s software solutions for traceability, supply chain mapping and storytelling among others can help cosmetics retailers, brand owners and manufacturers to tackle sustainability issues in their supply chains.
Whether it is about tracing back the origin of your natural ingredients and packaging materials, assessing the performance of your suppliers on environmental and social indicators, increasing collaboration in your supply chain, communicating to consumers or ultimately about risk management and brand protection, a centralized software platform such as ChainPoint can be a key part of the solution.
Contact us at email@example.com to see how we can support you in creating sustainable cosmetics supply chains. Alternatively, please read our solution paper on our Cosmetics Industry page to learn more.