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Cosmetic Industry

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Dorothy Wang

on 23 October 2013

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Transcript of Cosmetic Industry

- Found in 1946 by Estée Lauder
- premise: every woman can be beautiful
- It is a manufacturer and marketer of prestige skincare,
makeup, fragrance and hair care products.
- It is now the world’s fourth largest beauty company
- number of employees; 40,000
- subsidiary companies: M.A.C, Coach, Clique, Michael Kors,

Ethical Responsibility
- Committed to market products whose safety has been proven

- Was able to end all testing of its products
on laboratory animals in 1989

- Still use testing when predicting the safety of ingredients

- Goal: to replace all animal testing

- Ethisphere: one of the “Most Ethical Companies in the World”
since 2010
Class battle!
1. Split into into2 groups.
2. Do a ‘volley’ of questions
3. The team that gets the most points gets a prize!

Which companies use animal testing?
Which company do you think is the most ...? Why?
What is animal testing?
Name some alternatives to animal testing
Name some carcinogens

The Ugly Truth:
Looking Beautiful on the Outside But Not on the Inside
Cosmetic Industry
- Cosmetics = care substances used to enhance the
appearance or odor of the human body
- Companies different approaches to corporate social responsibilities
- do NOT support brands that are unethical and deceptive
- research your product: www.ewg.org/skindeep/

Two Major Issues
Safety Issues Animal Testing
Game :D
- A fairly ethical company that works to eliminate animal testing

- However, CoverGirl has no warnings about the proven carcinogenic
content in their makeup and has not tried to reduce this content

Works Cited
"Corporate Info." Estée Lauder. Estée Lauder, n.d. Web. 20 Oct. 2013.
"Cosmetics and Personal Care." Government of Canada, Health Canada, Public Affairs, Consultation and Communications Branch. N.p., n.d. Web. 19 Oct. 2013.
"Easy, Breezy, Beautiful Carcinogens." FemmeToxic. FemmeToxic, n.d. Web. 20 Oct. 2013.
"Estee Lauder Daywear Anti-oxidant Beauty Benefit BB Creme, SPF 35." || Skin Deep® Cosmetics Database. N.p., n.d. Web. 20 Oct. 2013.
"FAQ: General Questions About Cosmetics and Health." Campaign for Safe Cosmetics. Campaign for Safe Cosmetics, n.d. Web. 20 Oct. 2013.
"Formaldehyde-releasing Preservatives." David Suzuki Foundation. N.p., n.d. Web. 20 Oct. 2013.
"Ingredients." Discover Aveda. N.p., n.d. Web. 20 Oct. 2013.
"L'Oéal Awarded at the Grands Prix for Financial Transparency." L'Oréal Awarded at the Grands Prix for Financial Transparency - News - L'Oréal Group. L'Oéal, n.d. Web. 20 Oct. 2013.
Loeb, Walter. "Estée Lauder -- A Beauty Company To Be Reckoned With." Forbes. Forbes Magazine, 09 Sept. 2013. Web. 19 Oct. 2013.
"L'Oreal in Exclusive Talks Buy Carita, Decleor from Shiseido." Reuters. N.p., 17 Oct. 2013. Web. 20 Oct. 2013.
"L'Oreal Professional Texture Expert Infinium 4 Hairspray Extreme Hold Finishing Spray." || Skin Deep® Cosmetics Database. N.p., n.d. Web. 20 Oct. 2013.
MICHELS, SCOTT. "Lawsuit: L'Oreal Used Banned Chemicals in Foreign Sales." ABC News. ABC News Network, n.d. Web. 20 Oct. 2013.
"Parabens." David Suzuki Foundation. N.p., n.d. Web. 20 Oct. 2013.
"'Pinkwashing' -- 6 Companies' Questionable Claims to Promote Breast Cancer Awareness." The Motley Fool. Fool.com, n.d. Web. 20 Oct. 2013.
"Retail Revenues and Expenses Cosmetics, Beauty Supplies and Perfume Stores (NAICS 44612)." Canada Industry. N.p., n.d. Web. 19 Oct. 2013.
"Senate Health Commitment." Official California Legislative Information. N.p., 28 May 2005. Web. 20 Oct. 2013.
"Women's Consumer Advocates Take on Cosmetics Industry." MercuryNews.com. N.p., n.d. Web. 20 Oct. 2013.
"Answers." Our Position. N.p., n.d. Web. 22 Oct. 2013.
"Why Our Farming Minister Should Hang His Head in Shame." - Naturewatch. N.p., n.d. Web. 22 Oct. 2013.
"Corporate Responsibility Report 2012." N.p., n.d. Web.
"Initiatives in Response to Animal Testing and Alternative Methods." Shiseido Group Website. N.p., n.d. Web. 22 Oct. 2013.
"Japan Cosmetics Giant Shiseido Ditches Animal Testing." N.p., n.d. Web.
Kanter, James. "E.U. Bans Cosmetics With Animal-Tested Ingredients." N.p., 11 Mar. 2013. Web.
News, Bloomberg. Bloomberg, 22 Aug. 2013. Web.

Economic Responsibility
- Founded by Eugène Schueller in 1909

- Largest cosmetics and beauty company

- Ethical Principles: Integrity, Respect,
Courage and Transparency

- Mission statement: make beauty universal
in a sustainable and responsible way

- 5 key areas: hair care, hair color,
skincare, make-up, and fragrances
- 27 global brands

- Over 72,600 employees worldwide

- Products distributed in 130 countries

﹣ 2012 revenue: 22.5 billion euros
profits: 2.9 billion euros

CoverGirl is an American cosmetics brand founded in Maryland

- was acquired by Procter & Gamble in 1989.
- provides a wide variety of cosmetics available at
reasonable prices
- currently the best selling mass market
cosmetic brand in the U.S. and is particularly
prevalent in the teenage marketplace

The Procter & Gamble Company (P&G) is an American multi-national consumer goods company

- was founded by William Procter and James
Gamble in 1837
Legal Responsibility
- Falsely marketed shampoo, conditioner and styling

- Reached a class action lawsuit settlement in Aug 2013.
- has agreed to modify the labels of these products
to remove certain misleading language.

- Recently faced discrimination lawsuits in France related to
the hiring of spokesmodels and institutional racism.
- Founded by Arinobu Fukuhara in 1872

- manufactures and sells cosmetics, cosmetic tools,
toiletry products in Japan and overseas

- Mission statement:

Discretionary Responsibility
- L'Oréal-UNESCO Awards for Women
in Science

- “Look Good...Feel Better" Project
Economic Responsibility
- Covergirl’s revenue has not been disclosed

- Parent company P&G has a revenue of US$ 84.17 billion &
an operating income of $ 14.48 billion in 2013 fiscal year

- Estimated to have more than 500 million in revenue
- global cosmetics industry generates US$243

- Canadians use around seven different cosmetic
products per day

- In 2010, the Cosmetics, Beauty Supplies and
Perfume Stores industry in Canada generated
$61.3 million in profits
- many controversies over ethical concerns
- The world's largest cosmetic companies:
Procter & Gamble
Estée Lauder
Legal Responsibility
- has not had any past lawsuits
Ethical Responsibility
- In April 2011, CoverGirl supported the Procter & Gamble Children's Safe
Drinking Water campaign

- Donated $500,000 to the program, which provided 50 million liters of
drinking water to children across the world

- Given checks to people in need, most recently to the cancer-diagnosed
Talia Castellano, a 13-year old girl wishing to be a makeup artist and also
chose Castellano to be an honorary CoverGirl.
Discretionary Responsibility
- As of March 31 , 2013; Group companies: 104

- number of full time employees:33,356

- Net sales: 677.7 billion yen = 7 billion CAD
Economic Responsibility
Cosmetics Testing on Animals

- banned in the Netherlands, Belgium, and the UK

- in 2002, the European Union agreed to phase in a near-total ban on the
sale of animal-tested cosmetics throughout the EU

- ban all cosmetics-related animal testing from 2009

- France has protested the proposed ban by lodging a case at the European
Court of Justice, asking that the ban be quashed

- the ban is also opposed by the European Federation for Cosmetics
Ingredients (represents 70 companies in Switzerland, Belgium, France, etc)
Legal Responsibility
- the company has not had any past lawsuits
Discretionary Responsibility
Economic Responsibility
- the world’s fourth largest beauty
- number of employees; 40,000
- Revenue US$10 billion
- Net income US$1019.8 million
Legal Responsibility
- Feb 2012: class action lawsuit against Estee Lauder for their
false claims of no animal testing and deliberate
misinformation of a “cruelty free”label

-“This case is about being open and honest with
consumers, if you advertise that you are not conducting
animal testing, then you shouldn’t be conducting animal
testing – it’s that simple.” - Counsel Filippo Marchino of
The X-Law Group, P.C.
Ethical Responsibility
- the company is not very transparent in
terms of its animal testing and unsafe
content within its makeup

- Estée Lauder subsidiary, Aveda, promises
to use green ingredients
Ethical Responsibility
- state that
1. Provide safe and effective products to consumers
2. Comply with the cosmetics regulations

- Consumer safety: carcinogenic content

- second consecutive year: "World's Most Ethical Companies"

- "Companies With the Most Advanced Commitment in
Socially Responsible Management" in Japan
CoverGirl Clean Pressed Powder, Creamy Natural

- $12

- One of the classics, used by countless women
over the years

- Contains culprits methylparaben, BHT,
propylparaben, and at least five other ingredients

- Causes reproductive problems when used over a
period of years

- Ranks 9/10 on the Environmental Working Group's
list of toxic makeup
Cover Girl
Discretionary Responsibility
- created an Breast Cancer Awareness
- represent The Breast Cancer Research
Foundation’s first and
largest corporate supporter
- To date, the BCA campaign has raised $48
- In 2012, Estée Lauder promoted a pink
lipstick and clutch duo, of which 20% of
proceeds would go to Breast Cancer
Research Foundation.
Estée Lauder
- Aims to create a society in which people and the
Earth are both beautiful by steadily promoting
environmental initiatives in all processes of its
business activities

e.g. Launch of Naturals Addictive-Free Skincare Line

e.g. Commencing environmental education in local
• Maybelline products contained dibutyl phthalate, a
potential carcinogen.
• products contained a refrigerant.
• deodorant containing Tricolsan (also banned for being an
anti-microbial agent)
• Products in Europe contained unlawful levels of Kathon
• "100 percent vegan"products contained animal-derived
• The chemicals used in these claims are not banned in the

• In 2012, the FDA found lead in 400 lipstick brands with
Maybelline and L'Oreal having the highest content.

-L’Oréal uses an obstructionist strategy

-in the zone of compliance

Cover Girl Replenishing Natural Finish Make Up

Labeled Toxic Ingredients:
- BHA, Carcinogenic

- TALC, Carcinogenic; Lung Irritant.

- LANOLIN, often contaminated with DDT and
other carcinogenic pesticides

- PARABENS, Contact dermatitis

- FRAGRANCE, Wide range of unlabeled, untested,
and toxic ingredients; contact dermatitis
- has many proven carcinogenic materials in their listed ingredients list
Shiseido producst have been found to contain:

- can lead to learning, language and behavioral problems (eg. lowered IQ)
- young children and pregnant women are particularly vulnerable.

- human carcinogen that links to several cancers
- a restricted ingredient in cosmetics in Canada
- cannot be added in concentrations greater than 0.2 per cent in most products

- many of the products contain carcinogens and hazardous chemicals

- the lipstick promoted in Estée Lauder’s Breast Cancer Research Foundation is full
of reproductive toxins, hormone-disrupting chemicals, and carcinogens

- Estee Lauder stated that it is complying with all safety regulations

- has not signed the Compact for Safe Cosmetics

- according to the Skin Deep cosmetic database, over 1,000 Revlon, Estée Lauder,
Mary Kay and Avon products have been ranked between seven and ten, placing
them at what they call a ‘high hazard’ level. (Estee Lauder BB cream score 7

- In 2005, Estee Lauder opposed a California bill that required cosmetics firms to
disclose their use of chemical linked to cancer or birth defects
- Covergirl uses a Defensive strategy

- within the zone of compliance as well
- defensive as it meets its legal and economic

- within the zone of compliance
- Defensive strategy towards its products' safety issues
- Meets economic responsibilities and does the minimally required
- In the zone of compliance
- is on PETA’s list of companies that conduct animal testing

- website claims that it was able to end all testing of its products on laboratory animals except
for some new ingredients, which helps ensure its full safety

- animal testing represents less than 1% of their safety assessments

- created a worldwide center for Predictive Evaluation which produces 130 000 skin models per

- has employed more than 100 scientists and invested €900 million in international research on
animal free safety evaluation

- expanded into China where animal testing is mandatory
- In 2013, L’Oréal was part of a consortium calling on the EU
to invest more in research on alternatives to animal testing

- The Daily Mail: "L'Oreal donates $1.2 million to help abolish
animal testing but welfare groups say the company should
stop the practice NOW”

There are many images online of rabbits, dogs, monkeys that would have been tested on, are these true?
No, we assure you that L’Oreal has nothing to do with these images or those practices. The only laboratory animals used for testing purposes are rats and mice.
Their answer...
- takes a proactive strategy in animal testing, contributing and starting
research into alternate methods

- within the zone of conviction
- CoverGirl: “As for animal testing, P&G Beauty & Grooming's position
is clear: We do not test our products on animals, nor do we ask
suppliers to test them on our behalf. We do not test ingredients on
animals, except in very rare cases when necessary to meet
government-mandates or safety obligations.”

- Have not signed PETA's 'Companies that don't test on animals'

- PETA’s list of offending companies

- 99% of CoverGirl’s safety assessments are conducted by using non-
animal alternative methods such as lab-grown skin

- P&G is a member and key contributor to the European Cosmetics
Association's Steering Committee on Alternatives to Animal Testing

- joined with the European Partnership for Alternative Approaches to
Animal Testing
Cover Girl
- does not test its cosmetic products or ingredients on animals

- goal: eliminate animal testing for cosmetics, rigorously working to
ensure the safety of cosmetics, in order that our customers can feel safe
to use them, while paying full respect to animal protection as well

- The company said it was mostly dropping animal-tested cosmetics as
the European union is finalizing a sweeping ban on the sale of such

- only does animal testing...
1. when mandated by law
2. when no other alternatives exist
3. where animal testing is legally required
- says it does not test products or ingredients on animals

- however, it has begun selling products in China, which requires all
products to be tested on animals

Estée Lauder
- Estée Lauder uses an defensive strategy towards its animal testing

- meets economic responsibilities and does the minimally required

- in the zone of compliance
- not required to be disclosed in the list of ingredients
- easily penetrate the skin
- interfere with hormone function
- have been detected in human breast cancer tissues, suggesting a possible
association between parabens in cosmetics and cancer
- interfere with male reproductive functions
- increased skin aging and DNA damage
- NO restrictions on the use of parabens in cosmetics in Canada
- Covergirl uses accommodative strategy for its CSR as it meets its legal,
discretionary and economic responsibilities

- within the zone of conviction
- Proactive: does not test their products on

- Meet economic, legal, ethical, discretionary

- in zone of conviction
- the founder is Estée Lauder
- started her business in 1946 with four skin
care products and a simple premise: that every
woman can be beautiful.
- manufactures and sells skincare, makeup,
fragrance and hair care products
- subsidiary companies: M.A.C, Coach, Clinique,
Michael Kors, etc
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