How the Beauty Sector Got a Wake-Up Call

How the Beauty Sector Got a Wake-Up Call

In the beauty industry especially, the trend has been towards sustainability and CSR policies triggered by consumers. A brief history by Ashok Som, Professor of Strategy and Management at ESSEC Business School and Co-Director of the ESSEC-Bocconi EMiLUX program.

Consumer sensitivity 

Up until the early 1990s, many beauty companies had to face much criticism for unethical and non-environmentally friendly business practices, from a variety of sources including feminists, animal rights activists, authors and public interest groups. Concern kept growing over animal testing and supposedly toxic ingredients, especially those derived from petroleum, sodium lauryl sulphate (SLS), and parabens. Research by Yardley in 1990 showed that the proportion of consumers rating 'cruelty-free' as the most important criterion in cosmetics rose from 8 per cent to 61 per cent in nine months. 

A change in consumer decision

As consumers engaged on a deeper level in their purchase decisions and showed an increasing interest in not only product features but business operations as well, a dialogue between astute brands and discerning buyers arose. Companies began to realize that just as some consumers boycotted products they considered unethical, others would purchase products in part because their manufacturers were responsible. L’Oreal ended the use of animal testing for the evaluation of finished products in 1989 and went on building up strong sustainable development, from biodiversity to fair trade, from eco-design of products to eco-responsibility, from respecting values and commitments to health issues. Procter & Gamblepublished their first CSR report in 1999; 10 years later, they led many initiatives, including the launch of a Supplier Environmental Sustainability Scorecard and rating process to measure and improve the environmental performance of key suppliers, and the use of renewable, sustainable, sugarcane-derived plastic for their packaging. 

Ethics is good for business

In 2010, global sales of natural and organic cosmetics were soaring with revenues projected to approach US $7 billion. And now, in contrast with the mid-1980s, the best-selling cosmetics brands – Avon, Max Factor and Rimmel – all claim to be 'not tested on animals', as do Revlon, Yardley and Estée Lauder. 

As consumer attitudes developed, so has the way that business is done. The ethical movement has been permeating broader consumerism and commerce. TIME magazine once called it a “Responsibility Revolution”: “What we are discovering now [...] is that enlightened self-interest – call it a shared sense of responsibility – in good economics.” State regulation may be failing to control multinational corporations, but green consumerism works.

Edited by Louis Armengaud Wurmser, Reflets Magazine

Ashok Som honored by The Case Centre for best-selling case study: Coach: To be or not to be Luxury. Read about the author and The Case Centre on the ESSEC Business School website

Useful links: 

ESSEC Knowledge: Cutting-edge research – made practical     

ESSEC Knowledge on X