Marie Redding, Senior Editor05.24.22
Experts participated in the presentation, “Strategic Outlook: Responsible Consumption,” moderated by Jane Nelson, director of corporate responsibility initiative, Harvard Kennedy School of Government, at the World Economic Forum's annual meeting on May 24th, 2022.
Nicolas Hieronimus, chief executive officer of L’Oreal, joined panelists J. Michael Evans, president, Alibaba Group Holding Limited; Gilberto Tomazoni, global chief executive officer, JBS (food producer); and Vivianne Heijnen, minister of the environment of the Netherlands for the discussion. (View the 50-minute video here at WEF).
Panelists were asked how they are navigating current challenges, including inflation, water issues facing some communities, and more—while working toward these long-term goals:
- Being more environmentally responsible
- Keeping people healthy
- Being more inclusive and transparent
Nelson continues, "There are plastic challenges—only 14% of plastics are being recycled today. So there are shifts we need to make—but there is also a lot of innovation. So we want to focus on some of the solutions here today."
Nelson asked Hieronimus if there are any major innovations that he is excited about that will soon drive more responsible consumption. “Innovation is at our core,” Hieronimus says, adding, “Over 3% of our turnover is spent on R&D.”
3 Key Areas for L'Oreal
There are three key areas of focus for L’Oreal, Hieronimus says. They are—1. Responsible Innovation
“We spend a lot of effort improving the environmental footprint of our products—and 96% of all the products we launched last year had an improved environmental profile,” says Hieronimus. “One example is our new no-rinse conditioner—each tube saves 100 liters of water—and that makes a difference.”2. Responsible Production
“We are working on our packaging— we pledged to have 100% recycled plastic by 2030. We are at about 20% right now, but most of our brands are on the way,” says Hieronimus. "Manufacturing and sourcing are very important—we want all of our sites to be carbon neutral. Today, 70% of our factories are, including all in the U.S."3. Responsible Consumption
"The consumer has a very important role to play in responsible consumption," says Hieronimus. "There is an important number that always strikes me—85% of people say they want to behave more sustainably, but only 5% do it. The reason for this huge gap is—one, a lack of information; and two, a compromise in quality. These are the two things we are working on.”How L'Oreal is Encouraging 'Responsible Consumption'
In an effort to increase consumer demand for more sustainable products and encourage "responsible consumption," L'Oreal is working toward tackling the two challenges Hieronimus mentioned—- Better Communication: Making sure consumers have more information to make better purchasing decisions.
- Consistent Quality: Keeping quality consistent so consumers will want to choose more sustainable products.
L’Oreal also intends to help consumers make more sustainable choices with the help of the EcoBeautyScore Consortium, in collaboration with 42 other companies, including competitors, retailers, and others working together. “We are developing an EcoBeautyScore, and we have shared it with the entire industry,” Hieronimus explains. “It will help the consumer judge whether or not a product is sustainable, so that they can make educated choices.”
Amorepacific joined the EcoBeautyScore Consortium earlier this year. Henkel, LVMH, and Unilever are founding members.
Another hurdle to overcome—and get more consumers on board with making more sustainable choices—is to ensure quality, Hieronimus says.
He mentions that one product in development recently was one "flop" that didn't work. “Whenever a consumer tries a sustainable product that is not as good as the non-sustainable one, they won’t stick with it," he says. “Our labs work hard to ensure that all of our new sustainable products are at least as good as the non-sustainable ones,” he says.
Refillable Packaging Is the Solution
Hieronimus mentions refillable packaging, presenting it as the ideal solution. The challenge is getting consumers to choose it. "Consumer empowerment" is key, Hieronimus says. "We have to help consumers understand how to change their behaviors. We can only be agents of change if consumers are agents of change," he says.Using more refillable packaging is an ideal sustainable solution—but consumers have to get on board and change their product usage behavior, Hieronimus says. "So instead of buying a shampoo bottle or fragrance bottle more than once, you buy a beautiful package once and get it refilled," he says.
"But this is something you not only have to make happen, you also have to tell consumers about it—and incentivize it," he explains. "We have to tell them it is cheaper to refill a fragrance than buy a new bottle," he says, adding, "Then they will understand— buying a refillable package saves the planet and saves money."
Why Reducing Packaging is Key
When someone in the audience asked the panelists how a small business can afford to choose sustainable packaging because it often costs more, Hieronimus revealed the key—reduce packaging to offset costs."The cost of sustainable materials is a problem, it's true—but we don't have a choice," Hieronimus says. "The choice we do have is that you can reduce the packaging when you switch to more expensive sustainable materials."
As an example, Hieronimus says that when L'Oreal switched its shampoo bottles to PCR plastic, which is more costly, they also reduced the plastic's weight. This is often called lightweighting.
And in beauty marketing, it's all about the consumer's perception. "Five years ago, consumers expected thick, shiny, heavy plastic bottles," says Hieronimus, adding, "now today, if it's soft and it looks a bit handcrafted, they think it's good."
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