Natural Skin Care Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Natural Skin Care Industry

It is true that natural skin care products pose significant risks to ESG, yet they also have some benefits. In our analysis, we will analyze a few aspects associated with this theme.

Natural skin care products come with their own pros and cons. The products built using natural materials include packaging that includes plastic which leads to an increased amount of waste. The brands have put a lot of effort into using plastics in packaging and recycling materials to reduce waste. Additionally, more innovative approaches have been adopted, such as the refilling options that assist consumers in reusing the product packaging helping them to be aligned with the circular economy principles. Furthermore, it cannot be denied that the cosmetic industry benefits from biodiversity as natural ingredients are used in the manufacturing of natural skin care products. Naturally sourced products are beneficial to consumers as well as companies aligned to sustainable standards within their organizations can capitalize on the market. Moreover, manufacturers of natural skin care products do not conduct animal testing, which helps to avoid contributing to unfair and harmful practices.

A further concern is that the cultivation of natural products for cosmetics negatively impacts biodiversity. Furthermore, the over-exploitation of natural resources and the adoption of unsustainable farming practices result in the deterioration of livelihoods. It is well known that raw materials used in the manufacturing of cosmetics products are grown using toxic chemicals. This further impairs the quality of the soil, air, and water supply. Additionally, the packaging of personal care products contributes to the accumulation of waste in landfills, which takes years to decompose.

Growing interest and innovation from an ESG lens in the natural skincare product industry

The transition towards sustainability is taking place as consumers are more aware and conscious about the products they buy. More and more people shop ethically and to promote sustainability, support local sellers & community, and to protect the environment. A deeper look at the reasons revealed that eco-friendly aspects added value to the product, followed by the chemical-free aspect, which also had a positive impact on health and the environment, and the sustainable aspect, where the raw materials sourced locally supported the economy, and the natural aspects took care of the environment. Additionally, top brands have taken numerous initiatives towards sustainability, including making clean, plant-based skin and hair care products. Some brands also use packaging made from recycled materials, which makes plastic waste less likely to accumulate.

ESG Challenges

As per our research regarding the challenges for natural skin care industry, it has been found that land shortages have caused rises in the prices of consumer foods. As a result, the transition to natural products has highlighted serious concerns. The increasing population is leading to a rising need for food, so diverting land used to grow food to be used for beauty products is a serious threat. The solution for the same can be found when it is made sure that plant-based ingredients are extracted sustainably, and the land is used in an optimized manner.

 In addition, the production process for natural products which are derived naturally is prone to uncertainty, which makes it difficult to control the quality of the product. "Natural" and "naturally derived" ingredients are difficult to reproduce and control because of variations in humidity and soil conditions.

Growth of the Natural Skincare Market

In 2021, the global market for natural skin care market was valued at USD 6.7 billion and is expected to grow at a compound annual growth rate (CAGR) of 6.6% between 2022 and 2030. Growing awareness of the effects of chemicals on the skin, like irritation and dullness, is one of the primary factors driving the market. Customers are becoming more aware of the benefits of natural, eco-friendly products made from organic ingredients. The research also highlights key highlights about natural skin care products.

Key Companies in this theme

    • Procter & Gamble

    • The Estée Lauder Companies Inc.

    • Mama Earth

    • Unilever

    • The Clorox Company

Scope of the Natural Skincare 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 Skincare Product Industry ESG Thematic Report

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

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

    • Identifying ESG risks and opportunities to business among leading players in the natural skincare product industry

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