More than just cosmetic: the impact of ESG
Back in June AFFINITY wrote about the rise of the Conscious Consumer and their increasing influence on the behaviour of major brands. So not surprisingly, I read with interest this recent piece around the development of an environmental impact scoring system for cosmetics.
It’s an interesting initiative, not just for the brands involved (or for me as a conscious consumer), but because standardisation will increase the ease and reduce the cost of other brands looking to bolster their environmental credentials too. But perhaps more importantly, it could also strengthen another scoring system which is having an even bigger global impact.
The rise and rise of ESG
Environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that are generally used by socially-conscious investors to screen potential investments. Environmental criteria considers how a company performs as a steward of nature. Social criteria examines how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls and shareholder rights.
Whilst typically used at an investment level, the organisational importance of these rankings has started to expand. Not surprisingly then, it’s been an area of increasing focus for the cosmetics industry, with a recent independent report ranking 14 of the world’s largest cosmetics companies against ESG criteria. The report found all beauty companies actively engaging in this area. It seems only a matter of time before brands that have invested the most in these areas (and as a result have the highest scores), start to leverage them as a differentiator in their consumer marketing.
As a result, it will be interesting to see how quickly others jump on board the Unilever-led scoring initiative. Time is a factor, and playing catch up can be difficult. Plus the marketing opportunities from such a move (and being amongst the first movers) are clear.
I for one, will be keeping a close, mascara-clad eye on things.