Robust ESG goals have emerged as a promising trend in the hair care industry, prompting leaders, investors and other stakeholders to inject funds into environmentally friendly products. Brands have shifted to manufacturing cruelty-free hair care solutions as ethical claims garner global traction. Environmental changes and global warming have compelled companies to invest in a sustainable business model. Bullish goals can foster environmentally friendly performance and empower diversity. Moreover, water-efficient products have become the trendsetter amidst water supply scarcity. Innovation and commitment toward society and the planet’s needs can redefine the future of beauty. Stakeholders are gearing up to manage, monitor and assess ESG impacts on sustainable development.
Legion of hair artists is counting on brands that complement human rights and protect people’s and the environment’s safety. Conducting business in an ethical, inclusive and fair manner and focusing on carbon footprint have become a masterstroke to align ESG goals with stakeholders’ interests. Consumers have become gravely concerned about sustainably sourced ingredients and recycled packaging. Prevalence of greenwashing—misleading practice companies and brands adopt to appear sustainable and eco-friendly—that projects a false image of the brand has prompted consumers to be wary of the products they choose. Accordingly, transparency and sound governance have come into the spotlight.
One of the key companies of the Beauty and Personal Care products market, which specializes in production of organic beauty products through their products is reducing the aforementioned impacts of the preservatives, replacing them with natural and organic components, thereby promoting the UN SDG goals of climate action (SDG13) and good health and wellbeing (SDG3).
With the global push to combat climate change, carbon footprint mapping has become noticeable across the supply chain, including buying raw materials and packaging. Renewed focus on reducing energy used in facilities, emphasis on minimization of carbon emissions in scope 1 and 2 and efforts to foster renewable energy will bode well for industry participants. In September 2021, P&G set an audacious goal to attain net zero GHG emissions across its supply chain and operations, including retailers and raw materials, by 2040.
Incumbent players in the beauty sector have furthered their investments in water strategy. The American multinational company claims to have achieved the 2030 target of 35% water efficiency across its five manufacturing sites. In 2020, P&G injected funds into six projects in California’s Sacramento River and American River basins following the collaboration with the Bonneville Environmental Foundation (BEF) Business for Water Stewardship (BWS) program. These projects could restore over 3 billion liters of water to the environment and people. Brands are expected to emphasize water strategy, waste management, recycling solutions and swift action on climate change to bolster their environmental profile.
Stakeholders are navigating opportunities to propel their social performance with a focus on diversity, equity & inclusion, occupational health & safety, human rights, consumer safety and socially responsible products. L’Oréal asserts that 3 million people will gain from its social engagement programs by 2030. The company is bullish on helping 100,000 people from disadvantaged communities to gain access to employment during the same period. The French personal care company claims to have helped over 400,000 girls and women since 2020.
Well-established players are prioritizing talent recruitment and environment to thrive irrespective of race, sex, religion, color, age, sexual orientation, citizenship, gender diversity and marital status. Voyant rolled out unconscious bias training for all employees in the summer of 2020 and formed a strategic roadmap to underpin inclusivity and augment diversity within the workforce. In 2020, the company hosted an inaugural internship program of 16 interns to promote STEM (science, technology, engineering, and math) talent in local communities. Strengthening employee well-being could be a game changer in the business landscape.
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Commitment to sound corporate governance, business ethics, transparency, corporate behavior and anti-competitive practice has underlined the significance of the ESG framework. Leaders are building credibility with investments in world-class safety and quality standards in line with regulatory requirements. In essence, the audit committee in Unilever comprises a minimum of three non-executive directors. The committee plays an invaluable role in, included but not limited to, risk management and internal control arrangements, legal and regulatory requirement compliance and qualification & independence of external auditors.
Creating a governance structure, practices, policies and principles that align with the shareholders’ long-term interest and long-term value for stakeholders could be the go-to strategy. In November 2021, Herbal Essence became the first P&G brand to use Eastman Renew, a molecular-recycled PET with 50% certified recycled content. Using state-of-the-art technology can divert plastic waste from the environment and landfills. These trends indicate the global hair market could register a healthy CAGR of around 6.6% between 2021 and 2028.
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