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Sustainability rating platform Good on You has extended its reporting to beauty for the first time and the findings reinforce what critics have long said — that the industry has a long way to go on transparency.
Good on You assessed 239 makeup, skincare and haircare brands across North America, Europe and Asia-Pacific, including a mix of established and emerging companies with an annual turnover of over €2 million. It found that 75 per cent of brands disclose ingredient lists online but do not provide clear information on quantities used. Of the 90 per cent of brands that use ingredients to add fragrance to their products, most — 72 per cent — do not disclose exactly what those ingredients are. Despite common use of the ‘cruelty-free’ label, the company noted that 78 per cent of beauty brands have no publicly available certification to show they’re not testing on animals. And while 15 per cent of brands offer refillable products for more than one-third of their range, only 2 per cent track and report repeat purchases.
Transparency is a big challenge for the beauty industry, which observers note still lacks strict and standardised regulations. It is also facing growing pressure from consumers, says Sandra Capponi, who co-founded Good On You with Gordon Renouf in 2015. Capponi has a background in corporate social responsibility while Renouf has been a consumer advocate for over 30 years; they were motivated to provide a solution for consumers on both garment and brand transparency following the Rana Plaza disaster in 2013. To date, Good on You’s rating has been used by companies including e-tailers Farfetch and Yoox Net-a-Porter, shopping mall owner Unibail-Rodamco-Westfield, Klarna and Microsoft.
Beauty is behind other sectors in its sustainability efforts, which have been relatively small-scale and patchwork. Different global standards for ingredient transparency and testing make it hard for consumers to know exactly what goes into bringing a beauty product to market, and the industry is subject to greenwashing. “There are no agreed standards; it is a very grey area in many respects,” says Emilie Hood, beauty and health consultant for data analytics firm Euromonitor International.
Good on You analysed data across 42 areas, from agriculture, manufacturing, ingredient transparency and animal testing to climate reporting and packaging initiatives, amounting to over a thousand data points across each brand’s supply chain, Capponi says. It used company reports, beauty certifications, standards, third-party indices like CDP Climate and Water reports, and investigations by groups such as the International Labour Rights Forum and Greenpeace. Based on all this data, Good on You scored brands from one (“we avoid”) to five (“great”). Just 1 per cent of the beauty brands were given a score of five.
The report found that smaller brands generally score higher when it comes to transparency. The five top-scoring brands overall are Disruptor London, Odylique, Upcircle Beauty, Tropic and Pai Skincare. Of the larger-scale brands (defined by annual turnover over €50 million), the top three are Youth to the People, Garnier and Lush (ranking seventh, eighth and joint 10th overall, respectively).
“Over 50 per cent of Disruptor London’s ingredients are upcycled/certified organic, all its packaging is plastic-free, and the brand itself is certified microplastic, palm oil and water-free,” says Capponi. “In addition to this, all of its final stage production is made in the UK, and it is Peta-approved vegan and Peta animal test free.”
Capponi adds that the brands that have scored well use high proportions of certified and upcycled ingredients, and they have strong initiatives in place to reduce packaging waste and avoid ecotoxicity — which shows that they are taking meaningful action on some of the critical environmental challenges in beauty supply chains.
It’s not perfect, but it’s a start
Good on You’s scorecard approach has been questioned by some in the industry. The simple naming conventions “could be very damaging to a brand and its reputation, especially when consumers see ‘we avoid’”, says Kamal Kaur, cosmetic compliance specialist, founder and principal regulator at The Cosmetic Regulator. Kaur also points out that if a brand scores low within its ingredient transparency scale, it doesn’t mean the company is non-compliant or acting in a way that harms consumers. However, Kaur says the platform could be “helpful for the more conscious consumer who shops by researching and understanding a brand’s environmental, social and governance (ESG) policies, making it easier for consumers to navigate the ingredient market”.
Capponi says the intention of the naming conventions is to make it easy for consumers to understand. “Rating brands is incredibly complex, and sustainability at large is nuanced, but we need to make the information more accessible and easy to digest for consumers — hence the simplified five-point scale.”
Are there risks associated with using public data, for example, if brands make false claims? “Brand disclosures are definitely a key part of our 1,000-plus ratings dataset, but we also consider other data sources, including certifications, standards and indices,” says Capponi. Good on You is not taking what brands say at face value, she adds: it expects to see evidence to back up claims, with concrete and precise details provided, and it wants brands to be transparent even when, say, they might not be hitting a target they set.
Capponi admits certifications aren’t perfect but argues that “they provide valuable data to track where the industry is making progress. Plus, our ratings also factor in public investigations from regulators. [...] Greater transparency across the board is the goal.”
“Generally, we’re seeing that brands are a little worried about being fully transparent about areas that they are still trying to work out; they’re fearful of scrutiny from regulators and consumers,” Capponi continues. “The last thing we want is for brands to hold back because it might get them in trouble. We want to incentivise brands to talk about everything and share where they are experiencing challenges and their openness to progress. At the end of the day, it gives consumers the information they need to make better choices.”
Lindsay Dahl, chief impact officer at Rituals and a sustainability activist, welcomes it. “The pressure on beauty brands’ sustainability initiatives is long overdue. The industry needs better accountability when it comes to sustainability programmes and practices, and while marketing efforts are widespread, many brands lack true sustainable programmes to back up their marketing.” She adds that third-party platforms that objectively assess the credibility of sustainability programmes are critically important.
Marc Rosen of Marc Rosen Associates, a New York-based luxury packaging branding agency, believes it’ll move the needle and help industry experts like himself know where brands rank in terms of their packaging. “Not every company makes it a mandate to a designer that they want their packaging to be sustainable,” he says. Third-party platforms such as Good On You will aid transparency, allowing experts to research and work backwards through suppliers and manufacturers to start to implement a better materials journey, according to Rosen.
Key learnings for beauty brands
Brands have the opportunity to lean into the reports and scorecards as an indicator of their position when it comes to sustainable transparency and actively improve their practices and business models, Capponi says. Learnings for all beauty brands to take away and implement include improving publically available data and supporting tags and claims with certified data sources. This will not only improve a brand’s transparency standing with consumers but, going forward, will help brands to see and action their shortfalls and incentivise a change.
Capponi says the results of Good on You’s first beauty ratings are clear: “The beauty industry still has a long way to go to take urgent action on sustainability and meet consumer demand for more transparency.” She hopes it will be a call to action for brands and an “empowering moment” for beauty shoppers, who can now access the information they’ve been searching for. “We’re committed to playing our part, too, continuing to evolve our enterprise tools so our partners can reach even more shoppers more easily with credible rating data. There are lots of levers at play, but they’re all critical in redesigning the system for a more sustainable future.”
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