Beauty Brands Tackle Greener Packaging

Packaging is a customer's first introduction to a product. For prestige beauty brands, this first impression can define the consumer experience. The ingredients may be indecipherable and the messaging may be vague, but the packaging is memorable and creates a surefire way to differentiate between options.

However, consumers who care about sustainability are increasingly asking beauty brands what their packaging is made of.

Beauty Industry's Packaging Problem

There's no avoiding it: The beauty industry has a packaging problem. Plastic is ubiquitous in cosmetic packaging, from the thin cellophane wrappers that keep eyeshadow pristine to the plastic bottles and pumps used for lotions and shampoos. All have come under increased scrutiny for their negative environmental effects.

The beauty industry is not the worst offender. An organization called Break Free From Plastic fingered The Coca-Cola Company as the world's worst plastic polluter for the fifth consecutive year in its latest global study, published in late 2022. The following two on the list, PepsiCo and Nestle, also have maintained their spots on the "worst" list for five years.

A Plastic Crisis

The organization Ocean Conservancy estimates that 11 million metric tons of plastics are dumped into our oceans every year on top of the estimated 200 million metric tons already circulating in them. The problem is not a new one but it's getting worse: Half of the plastics ever manufacturered have been made in the last 20 years.

Governments have taken small steps to ban plastics by implementing various regulations, with some success. A 2015 U.S. law forced manufacturers to eliminate microbeads—tiny, exfoliating plastic particles—from rinse-off cosmetics. The ban keeps microplastics, which can't be filtered out by many wastewater treatment plants, out of waterways and, eventually, the stomachs of fish and other marine animals. Canada, New Zealand, and the U.K. have passed similar bans, with many companies voluntarily phasing them out.

Unfortunately, the bans and pledges are often riddled with loopholes. And microplastics, while a major problem, are a drop in the bucket compared to plastic packaging.

While many consumers are quick to point to recycling as a potential cure, only about 10% of plastic trash used in the United States is recycled each year. And recycling import restrictions by China has made it more difficult to export our trash.

1. Estée Lauder: Making Sustainable Packaging a Priority

With so much resting on its packaging, it makes sense that cosmetics brands are hesitant to make sudden changes. Estée Lauder, however, has made environmental sustainability a key pillar of its business. The company has committed to increasing the amount of post-consumer recycled (PCR) material in its packaging by up to 50% by 2025.

The measures it is taking include removing unnecessary packaging and using recyclable bioplastics.

The company knows that the design and aesthetic of its packaging must reflect the prestige of its products. But today’s consumers, particularly young entrants into luxury cosmetics, care about protecting the environment as well as preserving their skin. While the sustainability trend has been in vogue for decades, it is becoming more pronounced. The beauty industry recognizes the importance of addressing sustainability in packaging and along the entire value chain.

While niche beauty brands are seemingly everywhere, Estée Lauder actually owns a fair number of them. The product mix includes Aveda, Bobbi Brown, Bumble and Bumble, Clinique, La Mer, MAC Cosmetics, Origins, and Smashbox. In total, Estée Lauder owns 26 well-known brands sold in 150 countries and territories. It's the only corporation in the world that focuses solely on prestige makeup, skincare, fragrance, and hair care.

Estée Lauder's approach to sustainability requires an ongoing understanding of global consumer expectations for more sustainable products while meeting their changing needs worldwide. And it demands scientific and innovative design acumen. The EL Group launches thousands of packages a year for its skincare, makeup, fragrance, and hair care products. Managing complexity gives them a competitive advantage when it comes to both product and packaging innovation.

Corporate Governance Practices

The company’s board of directors has developed corporate governance practices to fulfill its responsibilities to stockholders in providing direction and oversight of the management of the company. Estee Lauder's goal was to be carbon net-zero, a goal it announced it had met during its fiscal 2021 year. By reducing its dependence on fossil fuel-derived plastic packaging materials, EL can meaningfully reduce its overall impact on climate change.

Estée Lauder uses life cycle analysis (LCA) software to monitor the environmental impacts of its packaging and design choices. In collaboration with suppliers, the company tests sustainable materials: plant-derived plastics, new packaging formats including refills, and post-consumer recycled content.

In order to reduce its environmental footprint, Estée Lauder lists the following sustainable packaging approaches in its 2020 citizenship and sustainability report: low-impact sourcing, or making sustainability one of the core criteria in pricing decisions; leveraging bio-sourced materials; recycling; substituting materials that come from less carbon-intensive materials; pursuing more recyclable primary packaging; reducing the overall footprint by eliminating packaging components wherever possible.

Through relationships with key bio-material suppliers, EL is working to better understand the challenges, costs, and performances of these materials and to assess the human health and environmental safety of the raw materials they procure.

The results are in the numbers. In the fiscal year 2022, 63% of the packaging used by the company was recyclable, refillable, reusable, recycled, or recoverable.

2. Aveda: Committed to Sustainability

The marketing for Estée Lauder's Aveda line leans heavily on its devotion to natural ingredients, and it puts sustainability at the forefront of its production as well.

Aveda was the first beauty company to adopt post-consumer-recycled (PCR) packaging. Now, about 90% of Aveda high-density polyethylene (HDPE) plastic bottles used a minimum of 80% PCR content.

3. Origins: Recycled and Recyclable Packaging

There are multiple approaches luxury brands can take to be sustainable. While Aveda incorporates the circular-economy approach by offer packaging that can be recycled, EL’s Origins brand incentivizes customers to return empty containers and will recycle anything they bring in. To date, Origins has also planted over one million trees to help offset its carbon emissions.

For any consumer that has purchased an Origins skincare or makeup product, there is always a lingering question: what is the Origins packaging made of? The unique feel of its bottles and jars is due to changes in its packaging: the brand is committing to ensuring at least 80% of its packaging by weight is recyclable, refillable, reusable, recycled, or recoverable. The company already powers all of its freestanding stores in North America with 100% renewable electricity.

The Bottom Line

Estée Lauder isn't the only cosmetics company with an eye toward sustainability. Other cosmetic and beauty companies have committed to making their packaging reusable, compostable, recyclable, or otherwise more sustainable than they have been in the past. Such approaches are not only sustainable but encourage brand loyalty so it’s a win for the environment, the business, and the customer.

Most importantly, luxury cosmetic companies need to challenge their packaging partners to meet the same standards. Being sustainable extends beyond addressing consumer needs. It’s taking into consideration the business’ employees, vendors, stockholders, and institutional portfolio managers all of whom are making more intelligent decisions on what to buy, where to work, and how to invest.

Correction—Dec. 17, 2021: A previous version of this article misspelled the name of the company Bobbi Brown.