Natural Hair Care Product Industry ESG Thematic Report, 2023

Environmental, Social and Governance (ESG) in Natural Hair Care Product Industry

The environmental, social, and governance (ESG) criteria are used by socially responsible investors to assess a company's performance based on three primary aspects: its environment, its social impact, and its corporate governance.

Hair care sector is seeing an increase in consumer demand for environmentally friendly and/or ethical products, particularly in Asia Pacific and Latin America. The renewed focus on sustainability has been beneficial to hair care in recent years, as the category has been overexposed to water use in both production and consumer usage, and there has been a dearth of mainstream innovation in format, so it has been ripe for disruption.

Non-organic and non-natural hair products contain harsh ingredients that can damage the scalp's protective layers over time. The toxic chemicals used also leave a major impact on the environment. In most natural hair care products, there are antioxidants containing Vitamin E that provide nutrients to the scalp and stimulate hair growth. Consumers are turning to natural products because chemical-based shampoos and conditioners have adverse effects on their hair quality and scalp. The demand for natural hair care products has grown due to consumers becoming more aware of ingredients such as sulfates, parabens, mineral oil, and alcohol.

ESG Trends

The number one eco-friendly and ethical feature consumers are looking for in hair care in 2020 is natural ingredients, but rising awareness regarding animal cruelty, recyclable packaging, and sustainably sourced ingredients is also a growing concern. Also, the natural hair care brands have taken extra initiatives by practicing ethical sourcing and implementing transparency in their production process.

Environmental protection will be enhanced if consumers ditch products that contain harmful chemicals, as concern about these nasty chemicals being released into the environment will be reduced. A harsh chemical-based hair product will not only damage your hair and scalp, but it will also adversely affect your overall health. Due to their ability to mimic hormones, parabens and phthalates have been linked to health concerns such as breast cancer.

Moreover, natural organic products do not undergo animal testing, meaning they are cruelty-free. Sustainable hair care companies are also vegan friendly and do not use animal products when manufacturing or producing their products. If customers wish to use more natural ingredients in their hair routine without using animals, sustainable haircare is the way to go. Also, there are many natural hair and skin care brands that use recyclable or biodegradable packaging. As a result, once you've used the product, you won't be able to dispose of it in a landfill.

ESG Challenges

Our analysis also shows that hair care products consume a significant amount of water, mainly since consumers consume a lot of water while using them. In the meantime, consumers are becoming increasingly aware of the environment and willing to change their behavior to be more sustainable. It is estimated that 80% of hair care products' carbon footprint comes from the hot water used in the shower - and this shows how businesses can benefit from the need to reduce water consumption. A typical person uses seven liters of water when washing and conditioning their hair. In response, a top hair care brand has launched a mass market No Rinse Conditioner across Europe, following its Shampoo Bar launch last year. Each conditioner tube will save 100 liters of water.

While natural hair care products have many benefits, consumers are becoming more suspicious of greenwashing and are looking for brands that share a variety of conscious values. To verify social and sustainable claims made by brands, certification and transparency will become increasingly important. Brands who are not willing to adapt to this social-purpose landscape will likely lose consumer trust by the end of the forecast period.

Growth of the Natural Hair Care Product Market

As of 2020, the global market for natural hair care products market was valued at USD 8.54 billion and is expected to grow at a compound annual growth rate (CAGR) of 4.7% between 2020 and 2027. An important factor driving market growth is a growing awareness of the benefits of natural hair care products. The changing consumer perception of natural ingredients in cosmetics and personal care products is expected to boost demand for natural hair care products.

Key Companies in this theme

    • Procter & Gamble

    • NatureLab Tokyo

    • Estee Lauder

    • Mama Earth

    • St. Botanica

    • Bollati

Scope of the Natural Hair Care Product 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 Natural Hair Care Product Industry ESG Thematic Report: 

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

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

    • Identifying ESG risks and opportunities for business among leading players in the natural hair care product industry

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