Lipstick Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in the Lipstick Industry

As far as the environment is concerned, ESG has numerous benefits. It raises awareness of the different climate issues that are occurring and encourages companies to adopt environmentally friendly practices and policies.

Even though beauty products continue to improve the appearance of humans, they have adverse effects on the environment. It's so bad that they have mainly contributed to the ugliness of the ecosystem. lipstick is one of the most popular make-up items, which is used by women of all ages and from all parts of the world. European women are the most likely to use lipstick than women from other regions.

Even though we know that the products enhancing our beauty also harm us, it sounds like a contradiction. However, the problem is quite simple. The chemicals used in these cosmetics and lipsticks are usually not biodegradable. In other words, they do not degrade after use, and thus ultimately end up degrading the environment.

Since the Lipstick Industry affects not only the environment and climate change, but it also has an adverse effect on human skin, therefore the Lipstick Sector has significant environmental, social, and governance risks.

ESG Risk

The amount of chemicals in lipsticks is concerning. While these chemicals are not good for our bodies, what are they doing to the environment? There are many lipsticks that are made from petrochemicals and are toxic to both human and environmental health.

There are several toxic chemicals in makeup that can actually harm human health, including lipsticks. Lipstick also contains lead, a heavy metal that takes a long time to degrade. Lead is dangerous to the environment. Generally, one is exposed to lead from lipstick if they swallow it.  It isn't dangerous when used occasionally, but it is concerning when used repeatedly over the years.

In addition to the chemicals involved in Lipsticks, there are also toxins and plastics that are unintentionally contributing to the poisoning of water, bleaching of coral reefs, displacement of hundreds of species from their habitats, and the generation of enormous amounts of waste from the lipstick industry. Since lipsticks are packaged in plastic, they end up creating a lot of waste. Furthermore, not all plastic packaging can be recycled or accepted by local recycling facilities. Additionally, these packaging end up in the marine environment, where aquatic and wildlife consume them. And worse, since they are non-degradable, we could also consume them when we eat animals.

ESG Trends

Lipstick manufacturers are taking environmental measures to reduce the negative impacts they have on the environment and health. Several companies are also striving to position themselves as ‘green’ companies by using recycled packaging, incorporating botanical ingredients, adding fewer chemicals, or sending a portion of their profits to a variety of green initiatives.

The products of these brands are cruelty-free, vegan, non-toxic in nature, ethically sourced, and thoughtfully packaged. These companies make fresh handmade cosmetics, and they use carefully blended plants, flower absolutes and fine essential oils, as well as natural ingredients. Furthermore, the company does not pack or wrap their products, nor do they come in boxes, as this can help to save on paper, plastic, and other wrapping materials. The products are wrapped in recycled newspaper and given to the customer upon purchase.

In addition to brands, the consumer also plays a significant role in saving the environment, and every woman should be aware of the chemicals in the products that she uses. The best way to go about skin care now is to get as much information as possible and to read the ingredient lists on each product that they purchase. Health consciousness among consumers and awareness about organic cosmetics are fueling the demand for natural and organic lip color products. Natural and organic products contain high levels of antioxidants that help repair the damage to skin cells. This beneficial quality is expected to drive consumers to purchase the product soon.

Growth of Lipstick Market

As of 2018, the global lipstick market was worth USD 11.5 billion. The increasing awareness of personal grooming and appearance of young female consumers throughout the world is expected to be one of the key drivers of this market. Soon, the demand for the product is expected to be fueled by the increasing purchasing power of the female population due to the rising female workforce. The beauty of our bodies is not the only thing people care about; they care about our planet as well. As consumers become more responsible for the climate, they are focusing more on natural and organic products, which has led to an increase in the production and sale of lipsticks that are toxins-free and environmentally friendly.

Key Companies in this theme

    • L'Oréal S.A.

    • Shiseido Company, Limited

    • The Estée Lauder Companies Inc.

    • Coty, Inc.

    • Revlon, Inc.

    • Avon Products, Inc.

    • AmorePacific Corporation

    • Oriflame Holding AG

    • Chanel S.A.

    • Christian Dior SE.

Scope of the Lipstick Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Lipstick Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Lipstick Sector, globally.

    • Key insights into Infrastructure developments and ESG issues affecting the theme.

    • Identifying ESG risks and opportunities to business among leading players in the Lipstick industry.

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and finding opportunities for investment.