Marketing & Communications

Ecolabels Ensure Chemical Sustainability in Beauty, Household Products

63% of consumers want brands to help educate the public about product origins and business practices. Companies that avoid greenwashing — and demonstrate this honesty to the public — could distinguish themselves in the eyes of potential customers.

Sponsored Content | / This article is sponsored by Capgemini | By Lilli Gluck | Published 2 months ago | About a 5 minute read

Image: RDNE Stock Project

It’s never been more important for consumer products companies and retailers to adopt sustainable production and distribution practices.

We want as many organizations as possible to embrace climate action, but being at the forefront of this eco-conscious transition isn’t just admirable — it’s good business.

The beauty and household products industries feel the pressure to embrace sustainable processes and materials more than many others. In addition to needing to conform to evolving regulations, they also often need to inform their target demographic about how they are creating more sustainable products. And that customer base often has higher expectations than the average — surveys consistently show the public’s concern about ingredients in skincare and personal care products, makeup, fragrances, cleaning supplies, etc.

Fortunately, ecolabels can help brands show they are rising to today’s sustainability challenges in ethical ways.

Growing demand from consumers and regulators

The trend toward sustainable ingredient preferences is undeniable. According to a 2023 NielsenIQ report, 62 percent of consumers consider sustainability more important now than two years ago. And a survey by supply-chain management company Blue Yonder found that consumers were most likely to pay a premium for sustainability for apparel (30 percent), cleaning products (27 percent), and beauty products (19 percent).

Throughout North America, companies must now navigate laws that regulate the introduction of new chemicals and ensure household products are free of hazardous substances — including Canada’s Food and Drugs Act, the US’s Toxic Substances Control Act, and Official Mexican Standards. And cosmetics companies should adhere to global guidelines such as the International Organization for Standardization’s Good Manufacturing Practice for cosmetics.

North American companies must also pay close attention to the more stringent regulations passed by the European Union — including the European Single-Use Plastics Directive and EU Cosmetics Regulation. And moves by more progressive states such as California — with its California Safe Cosmetics Act and California Cleaning Product Right to Know Act — often signal what’s likely to become adopted more widely.

New standards are emerging regularly — so, it’s important for beauty and household products companies to keep pace to prevent legal complications or lose the public’s trust.

Avoid greenwashing through transparency

Another way to run afoul is by greenwashing — making false or misleading statements about a company’s sustainable products or practices.

Unfortunately, it’s all too common: According to a 2022 Harris Poll survey, 72 percent of C-suite and VP-level executives in North America said their companies engaged in greenwashing. Greenwashing often leaves customers confused — even people who want to support sustainable companies have trouble distinguishing authentic change-makers from the imposters.

In the Capgemini Research Institute’s 2024 edition of the What matters to today’s consumer report — which tracks consumer behavior in the CPG and retail industries — 52 percent of respondents reported having insufficient information for verifying sustainability claims, and 50 percent agreed that sustainability branding lacked global standards.

That may explain why 63 percent want brands to play an active role in educating the public about product origins and business practices. Household products companies that avoid greenwashing — and demonstrate this honesty to the public — could distinguish themselves in the eyes of potential customers.

New technologies can help. For instance, Compare Ethics has an AI-powered platform that helps retailers — primarily in fashion — avoid greenwashing by simplifying eco-claims compliance and fully assuming the risk. It integrates with existing systems, automates the verification process, identifies compliance gaps, and generates compliant sustainability claims.

Embrace ecolabels with strict verification criteria

Companies can also cover their bases by embracing and promoting authentic, reliable ecolabels. This sets them apart by communicating the vetting process for genuine certifications that consumers can trust.

Appearing on product packaging or in an online product listing, ecolabels — which are managed by government agencies, private companies, or nonprofit groups — help consumers quickly identify sustainable choices.

To maintain credibility, any organization maintaining an ecolabel must develop verification processes that are both stringent and aligned with regulatory standards. That will require the following:

Comprehensive criteria: Establish clear and comprehensive standards that determine whether a product warrants the ecolabel.
Regular audits: Regularly review and assess the verification process to ensure ongoing compliance.
Transparency: Build consumer trust by providing straightforward, honest information about the verification process and criteria.

Global nonprofit Green Seal pioneered ecolabeling decades ago and is still widely recognized as one of the world’s most effective and transparent certification organizations. Companies around the world seek the comprehensive validation of their products by meeting Green Seal’s rigorous standards.

In Germany, an ecolabel called Blue Angel — which was launched by the government but is awarded by an independent jury — similarly signifies protections for the environment and consumers. Criteria include limits on emissions of CO₂ equivalents and toxicity to aquatic animals or organisms.

As retailers strive to align with both consumer sustainability priorities and regulatory requirements, ecolabels will continue to play a vital role. By developing robust, transparent verification processes and avoiding greenwashing, ecolabels can help create a market where sustainable choices are the norm, benefiting both consumers and the planet.

But ecolabels also benefit the retailers themselves. They simplify the verification process and increase efficiency while simultaneously protecting the retailer from unintentional greenwashing or non-compliance.

That makes ecolabeling a win-win for all good-faith actors in the consumer goods sector — they help companies effect environmental change while making smart business decisions.