As recently shared by Zion Market Research, “the global market for natural and organic cosmetics had a value of approximately USD 21.48 billion in 2023,” and “it is projected to reach around USD 37.44 billion by 2032, with a compound annual growth rate (CAGR) of about 7.19% from 2024 to 2032.”
With consumer demand soaring for increasingly sustainable cosmetics options, manufacturers are left to navigate the best practices to source, formulate, and produce products to meet their needs – leaving companies open to liability issues surrounding impact shifting and quality assurance.
To explore these issues and more, CosmeticsDesign interviewed Polina Dekhtyar, Senior Sustainability Strategist at Boston Consulting Group company Quantis, for her insights.
CDU: Can you share some brief background about your professional experience, the company, and your relationship with the cosmetics and personal care product industries?
Polina Dekhtyar (PD): I’ve spent much of my career at the intersection of business and sustainability. I’m passionate about enabling more sustainable consumption and production models for the products we consume every day, and in recent years, I’ve been particularly focused on the cosmetics and personal care industry.
After spending several years in strategy consulting, I joined Estee Lauder Companies, where I worked on internal transformation and corporate marketing initiatives. I wanted to work more directly on addressing the sustainability challenges in the sector, so in 2022 I joined the Cosmetics and Personal Care team at Quantis (a Boston Consulting Group company), which is a specialized sustainability consulting firm that guides some of the biggest companies in the world in their sustainability journeys.
I’ve had the opportunity to work with some of the top global cosmetics players on topics like eco-designing their products, building their climate strategies to contribute to global net-zero goals and reducing waste. With beauty being such a product-driven and innovation-driven industry, I’m particularly interested in how the choices made in designing beauty products can contribute to overall sustainability performance.
CDU: What is impact shifting, and what role do cosmetics and personal care product manufacturers and suppliers play?
PD: Impact shifting is when action taken to reduce environmental impact in one area negatively impacts another. For instance, if a company swaps out a carbon-intensive ingredient for another one without a holistic environmental assessment, it could come to find that the new ingredient might have an equally as negative impact on biodiversity.
Avoiding impact shifting requires product innovators to move beyond a narrow set of objectives towards a more holistic, eco-design approach, which aims to limit overall environmental impact across a comprehensive set of impact areas. Companies that identify and mitigate impact shifting risks will future proof their material choices and speed up their trajectory toward impact reduction.
Cosmetics and personal care product manufacturers must better understand the holistic impacts of various raw materials used in their products and empower and upskill their R&D teams to leverage impact data. Manufacturers must also collaborate with suppliers along their value chain to improve material traceability and reduce impact shifting risk.
CDU: What are some of the best practices for selecting raw ingredients for sustainable cosmetic and personal care product formulations?
PD: There are several best practices for sustainable raw ingredient selection:
- Start by considering your formulas and identifying highly impactful ingredients as well as potential alternatives. Using a Life Cycle Assessment (LCA) approach can help you understand various potential impacts of different ingredient options and proactively flag trade-offs in formula design.
- Take an eco-design approach to your product design, by integrating sustainability considerations throughout the design process and standing up the needed governance to include environmental performance in decision making.
- Work with certified product and raw material suppliers who adhere to vetted sustainable sourcing standards.
- Develop robust sustainable procurement policies and monitor and collaborate with suppliers to ensure compliance. This also requires building transparency and traceability in what are often complex supply chains.
- Work collaboratively with and support value chain partners to help them on their own sustainability journey (via capacity building or innovative financing, for instance) or to deploy best practices such as regenerative agriculture.
- Support continuous innovation by partnering with suppliers developing vetted lower-impact alternative ingredients.
By incorporating some of these best practices, cosmetics and personal care product manufacturers can contribute to a more sustainable and responsible industry.
CDU: What are the risks associated with raw material selection regarding impact shifting?
PD: When thinking about the sustainability of their raw materials, many beauty brands today focus primarily on a few select objectives, such as addressing key consumer trends like natural beauty or meeting public commitments around carbon or plastic reduction. While these are very important goals in themselves, taking a narrow view on material selection and innovation can lead to unintended trade-offs in other areas, like water use or deforestation.
We know that in some cases high demand for specific materials can have substantial impacts on nature – for example, cultivation of palm oil ended up driving 7% of global deforestation between 2000 and 2018, according to the FAO, and is now a familiar cautionary example.
While companies are now phasing out or sustainably sourcing palm oil, there are other natural materials that are growing in popularity and may place local ecosystems at risk. This doesn’t mean that these materials shouldn’t be used, but it’s important for brands to holistically assess their raw materials options to understand potential impacts across the board and be aware of potential trade-offs, to select the best options overall and better manage sustainable procurement.
This is particularly true as regulatory and reporting standards are evolving to include considerations beyond carbon (for example, the EU CSRD includes multiple disclosure areas, including biodiversity, water, and circularity).
CDU: What should manufacturers and suppliers pay attention to when considering future-proofing product formulations to comply with environmental standards?
PD: At a high level, both brands and suppliers should keep up to date on environmental regulations and standards relevant to the industry, as these are rapidly evolving, particularly in the EU. Understanding both regulatory and consumer trends can help companies stay one step ahead and go beyond compliance to future-proof their products. Given the length of innovation cycles in beauty in particular, brands should think ahead to keep their portfolios in line with environmental standards.
Once they are aware of key requirements and considerations, brands can apply robust LCA-based environmental assessment and eco-design principles to ensure that their products are compliant. Regulatory and consumer trends are also increasingly pushing towards greater transparency around products’ sustainability performance, so having a robust understanding of the products’ various impacts can help strengthen consumer communication.
CDU: What are your predictions for future trends in sustainable cosmetics and personal care product formulations?
PD: With product use phase responsible for 40% of the cosmetics industry’s environmental impact, a focus on consumer education and engagement is taking root. Aiming to equip consumers to make more informed sustainability choices, initiatives like the EcoBeautyScore – an industry-driven harmonized environmental score for products – are growing.
Additionally, eco-design and circularity are also influential themes shaping the industry, opening doors to new opportunities while enabling companies to avoid impact shifting when integrated into every stage of product development. While circularity principles have historically been primarily associated with packaging, brands are beginning to experiment with renewable, recycled and upcycled ingredients as well.
Lastly, the industry is witnessing a new ingredient trend driven by a push to preserve nature and biodiversity, which can open doors to new lower-impact innovative cosmetics ingredients.
CDU: Anything else to add?
PD: The beauty and personal care industry is starting to see a shift from commitments and target-setting towards action. Consumers, investors, and regulators are expecting companies to track and demonstrate progress towards their goals, and sustainable product design as well as sustainable procurement will be key levers for achieving that progress. Companies can therefore expect increasing scrutiny of their choices.
At the same time, there is growing awareness in the sector that beauty brands need to think beyond carbon and be vigilant about nature impacts, particularly since beauty is both very dependent on natural inputs and has significant impacts on nature and biodiversity.
The beauty sector has innovation in its DNA, and I think brands can really harness the power of that innovation excellence to come up with new solutions that lower overall environmental impacts of their products.
