Transparent beauty: supply chain risks in cosmetics

By Lucy Whitehouse

- Last updated on GMT

Transparent beauty: supply chain risks in cosmetics
Verisk Maplecroft Research has revealed supply chain risks that it says ‘could blemish cosmetic reputations’.

The firm has released a Commodity Risk Briefing on how to trace and monitor the Environmental, Social and Governance (ESG) impact of cosmetics ingredients, and the risk this poses.

About 30% of the ingredients used in the cosmetics assessed are derived from either mined or agricultural commodities, the firm explains.

This means, the report suggests, that it is a particular challenge for the cosmetics industry to balance “the necessary secrecy around the thousands of formulations they use to create their products, with the transparency that consumers and regulators increasingly expect in relation to how and where ingredients are sourced.”

To achieve this transparency, cosmetics companies must first dig into the depths of their extensive and complex supply chains to find out the risks that may lie hidden there, Verisk Maplecroft Research asserts.

The firm reckons its recent briefing is one step in the right direction on this front.

Key findings

Three of the top headline findings from the briefing are:

  • Numerous commodities used in mainstream cosmetics are linked to ESG risks across every continent

  • Given the depth and breadth of the cosmetics supply chain, tracing and monitoring the tiers of production is virtually impossible

  • Companies are relying on certification schemes to help them address ESG issues, but these schemes cannot guarantee the absence of risk.

The following displays some examples of everyday cosmetics, showing the ingredients for each that are classified as high or medium risk in Verisk Maplecroft’s risk indices.

Verisk Maplecroft - Cosmetics_Risk_tables

The full briefing is available to access here​.

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