News from Forbes

In a rare move by two fierce competitors, Walmart and Target brought together stakeholders from across the U.S. beauty and personal care (BPC) industry in 2014 to drive safer, more sustainable products. This was bold considering that there was no consensus on the basic definition of product sustainability in an industry estimated at over $80 billion. After three years, a core group of eighteen organizations across the BPC value chain, including the Environmental Defense Fund (EDF), released the first science-based scorecard of 32 key performance indicators (KPIs), marking the most sweeping market demand signal for safer and more sustainable beauty and personal care products yet.

Why does this matter?

Beauty and personal care consumers increasingly care about the health and environmental impacts of the products they buy. A vast majority of 87 percent of consumers globally prefer products with “no harsh chemicals or toxins.” Millennial women are also driving demand for more sustainable products. To address this gap, Forum for the Future worked together with The Sustainability Consortium and industry leaders to “shift the beauty and personal care product sector into a more sustainable, thriving and resilient industry that serves the needs of people and planet both now and in the future.”

The scorecard is a breakthrough for quantifying product sustainability, or the degree to which a product does what it is supposed to do without harming the user, the makers, or the planet. To understand the full range of potential impacts of a product, it is important to evaluate the human health and environmental impacts of the product’s raw materials, processing, manufacturing, packaging, transport, sale, use, and disposal. Consider that one supplier can make tens of thousands of different products, and this process can quickly become overwhelming. Add to that the fact that a retailer can sell hundreds of thousands of products. Trying to assess and improve sustainability of such vast product portfolios is daunting.

KPIs are important because they align and simplify the conversation by narrowing the focus to the most relevant environmental and social issues, or “hotspots.” Meaningful KPIs add clarity to key hotspots and incentivize suppliers to adopt more sustainable practices by assigning higher points to those actions.

The new BPC scorecard focuses on four major “clusters” to characterize product sustainability:

  • Human Health – Human health impact of ingredients and product formulations
  • Supply Chain and Environmental – Resource usage (e.g. energy, water) and emissions during sourcing, manufacturing, and product use
  • Disclosure – Ingredient disclosure to consumers, and
  • Packaging – Environmental and health impacts of packaging decisions.

This scorecard is unique for two reasons. First the scorecard is publicly available. While deciding how to share results will be up to individual companies, consumers can at least see where the sustainability conversations between suppliers and retailers are likely to be focused and can be comforted that the scorecard evaluates what’s in a product and packaging, not simply a company’s procedures. Second, the scorecard awards the highest number of points to the human health “cluster” (130 points out of 400 points). This is especially important considering that in the US regulatory oversight of chemical safety of personal care products is lacking. In the United States, only 30 ingredients had been partially banned, compared to 1,300 chemicals in European countries. The last federal law to regulate the safety of personal care products was passed in 1938.