Skin Care Product Industry ESG Thematic Report, 2023

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

Different actors of the consumer market such as consumers, manufacturers, and governments are working on achieving sustainability goals through implementing different policies of ESG.

The current value of the skin care product market is USD 130.85 billion, with the trend inclining an estimated value of USD 204.62 billion might be achieved by 2030. Due to its economic magnitude at a global level, the skin care products market is functioning positively in the sphere of ESG. Many players in the market are working on the components of ESG by including various goals such as making and executing net zero policies in manufacturing and including different ethnic and racial groups to its target audience.

Hence, players operating within the skin care product market contribute to each of the components of environment, social and governance at different levels.

The pandemic has adversely impacted the skin care products market economically by weakening the sales of the products. Simultaneously, the change in the opinion of consumers due the exclusion of BIPOC’s (Blacks, Indigenous, People of Color) has further impacted the social perception of the market. Further, the manufacturing process of packages used for packing the products and the consumption of raw materials affect the environment. Major players in this sector are working to create a positive impact in the ESG space globally, by incorporating various policies in their activities.

Change in Trends:

The skin care product industry faces challenges in terms of its products. Certain skin care products can be threatening to the consumer as well as to the environment as these contain microbeads. Microbeads are one of the important components in the skin care products, that can damage the skin as well as its end-of-life use causes water pollution. Further ingredients such as palm oil usage are unregulated and the resource is unsustainable, thereby creating challenges to work on sustainable goals.

Preservatives such as Parabens and Triclosan, which are found in the majority of cosmetic products, are also responsible for ocean chemical pollution. Oxybenzone, one of the ingredients in sunscreens, is considered as an endocrine disruptor and it has been reported that fourteen thousand tons of sunscreen is released into the ocean every year causing damage to coral reefs.

The industry has a significant positive impact on the social aspect of the ESG. Due to change in the perception of consumers, they aim for inclusion of ethnic minorities within their work force and ensure gender equality within the workforce. Companies in this space have improved their policies on waste management, packaging life cycle and plastic pollution. companies have pledged to make the packaging recyclable and reusable through using combinations of materials used for manufacturing the packages. Some of the players have replaced petroleum-based plastic with bio-based plastic.

One of the leading companies during the pandemic has released its workforce statistics, which states that the marginalized ethnic groups are recruited into the workforce and composed of the majority of women. Despite having a diverse workforce, the industry requires to focus on improving inclusion in the workforce.

Further, brands such as Sephora have introduced BIPOC (Black Indigenous People of Color) products to their product line up, thereby including people of different race and ethnicities into their target audience. Some of the key companies have a consensus amongst their board members to initiate action against climate change, where they have committed to certain practices such as deforestation free supply chain, a net zero emissions products by 2039, a regenerative agricultural code for all the suppliers, which reflect the governance core values also.

Growth of the Skin Care Product Market in Indian arena:

The skin care product market in India is valued at USD 24.54 Billion and by 2027, the value may increase to USD 33.33 billion, at a compound annual growth rate of 6.32%. The scope and potential regarding the ESG in the relevant market is yet not fully explored.

At a global scale, most of the players in the market are committed to the UN-SDGs (United Nations Sustainable Development Goals), to ensure their actions are responsible. However, locally, the industry is largely unregulated. The Drugs and Cosmetics Act is one of the major laws, whereas the CDSCO (Central Drugs Standard Control Organization) is the regulatory body that largely focuses on pharmaceuticals alone.  Thus, the market is still open to regulations.  

Key Companies in this theme

    • L’Oréal S.A

    • Beiersdorf AG

    • Procter & Gamble

    • Johnson & Johnson Inc.,

    • Unilever.

Scope of Skin Care Products 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 Skin Care Products Industry ESG Thematic Report:

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the skincare products 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 skincare products industry

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