Sustainability in the Personal & Household Care Industry
Companies in the personal and household care industry manufacture a diverse set of consumer products, including cosmetics, fragrances, hair products, lotions, and household cleaners. In recent years, environmental groups and regulators have targeted the industry over human health concerns, and there is growing scrutiny on the broader environmental impacts, such as raw-ingredient sourcing, packaging, and energy. As a small set of companies raise the bar on environmental performance, companies within this industry should anticipate pressure.
Sustainability Drivers
Increasingly, consumers want products that are safe, not only for human use, but for the environment as well. Within the industry, a significant gap exists between companies that have implemented environmental sustainability strategies and those that have not yet taken major actions. For companies that manufacture their own products, as well as those that rely on suppliers, higher consumer expectations have sweeping implications across the value chain—on everything from raw-ingredient and product sourcing to packaging to distribution.
For personal care companies, environmental regulation and ingredients disclosure have historically not been major issues. But the regulatory environment is poised to change in response to growing consumer concerns about ingredient safety. At the same time, large retailers, such as Walmart, are pushing personal care and household products companies to cut carbon emissions, water consumption, and waste, and to create lighter and greener packaging.
Challenges and Opportunities
To meet emerging sustainability challenges, personal and household care companies need to ask:
- How can we develop and communicate environmental sustainability policies with regard to sustainable sourcing and ingredient use to enhance our relationships with customers?
- How do we design products to meet consumers’ emerging sustainability interests?
- To what extent should we be designing products and business practices today for tough regulatory standards that might not be implemented for several years?
- How do we prepare to meet the rising expectations of retailers and other channel partners?
Viridis has worked closely with personal care products companies to address these and other critical questions.
Case Study
A leading-brand personal care company asked Viridis to diagnose and evaluate its global impacts, including paper sourcing, packaging, carbon emissions, and raw materials. The project required an understanding of a complicated value chain and set of business processes and dynamics. Data resided in multiple locations across the company and were not always complete, requiring interpolation and judgment based on the industry knowledge of Viridis Strategy Group. Viridis also conducted a rough carbon footprint calculation for the company. Strategic recommendations, along with high-level action plans and rough budgets, were delivered to client leadership. Viridis subsequently helped develop a program for engagement of key stakeholders in a global green program and supported the development of a global paper procurement policy and tracking/management system. Since Viridis's involvement, the client has systematically addressed risk and taken steps to enhance its reputation as responsible and engaged in environmental sustainability, placing first among personal care products companies on the Newsweek Green Rankings 2009.