The Solutions

Growing a Sustainable Economy

            As for current ethical concerns regarding the cosmetic industry, many more economic regions are just catching up with their regulations and concerns. Like most problems with sustainability in the economy, most countries seek out a large and impressive capital economy before they realize the importance of sustainability and eco-friendly practices later on during their processes of development.

This not only makes it hard to implement new sustainable policies, but also means that the local business practices will always be slightly more backward in the eyes of its Western investors. However, regions once considered developing are now catching up with their ethical concerns.

How? Ethics!

Already in its second year, the “Asia-Pacific edition of the Sustainable Cosmetics Summit” is precisely aimed at tackling the major ethical issues pertaining to the cosmetics industry, particularly ecological awareness and the ethics of cosmetic research. Such summits are very important in the transmission of cosmetic knowledge, allowing the most up to date knowledge on issues of ethical cosmetic research and development for less developed industries. Furthermore, these summits are gathering places for smaller sustainable product suppliers, or cosmetic material producers to meet up with larger, more established cosmetic tycoons in the industry.

This particular summit investigates the issue of ethical cosmetics in the industry through two perspectives: the first being eco-friendly, natural, “green” cosmetic ingredients, the second being the stainable packaging and marketing practices for a cosmetic company. In response to this, this summit’s method of splitting the issue of ethics in different sustainable stages gives the consumer an overview of the very important matters regarding sustainability today, those being successful obtainment of positive ingredients, along with incorporating a successful marketing plan to sell such eco-friendly products.

            With the lax in governmental regulations, the cosmetic industry can mainly be changed by way of its consumer-ship public. With the new technological advancements, consumers can easily research the ingredients and chemical additives in any of their daily cosmetic products. With women applying make-up on a daily basis, the chemical toxins in the cosmetics should be the lowest possible to ensure unwanted side effects.

How? Regulations!

Though governmental regulations are the best and most lasting way to ensure the illegality of some particularly harmful products in cosmetics, consumers should always be informed of the ingredients of the products they are purchasing. Knowledge transparency is very important for sustainable companies, and with such knowledge, consumers will trust their brand name products even more. Other than consumer product awareness, consumers should actively boycott products they feel that do not reflect their moral and ethical standards.

If consumers actively pursue for industry change in unethical practices, the demand will force these cosmetic companies to rethink their unethical policies, and access whether or not unethical behavior is really more lucrative in the long run.

           According to David E. Gumpert, the entire notion of the “American entrepreneur” could be seen as a less ethical image. Gumpert attributes this image to the fact that entrepreneurs have to constantly offer products, or different product marketing strategies, that are not already on the market. Gumpert suggests that this may force them to seek out more legally questionable routes in face of profit. However, the cases seen in the cosmetic industry seems to be just the opposite. The high amount of saturation in the traditional cosmetic companies have forced new, up and coming cosmetic brands to seek out different eco-friendly marketing strategies and all natural formulas. With this new trend of environmentally aware cosmetic products, it is often the old unethical processes that need to be innovated.

Moreover, according to the Harvard Business Review, ethical issues are often overlooked in the reality of the workplace: “Responding to intense pressure for short-term results, people working for corporations often cut corners that they shouldn’t.” Harvard Business Review stressed how the collective environment of the workplace often contributes to the unethical employee practices that do not seem to unethical when everyone else is involved. In light of these unethical business practices in the fundamental workplace, companies wishing to project an image of sustainability and eco-friendly attitudes should focus on changing the overall work place mentality to encourage sustainable behavior on the most fundamental level. 

The Positive Effects:

All in all, if the work place is encouraged as an honest and reputable place, where the employers really care about their employees, and the employees really care about the company consumers, consumers will be increasingly willing to purchase ecologically conscious products. To really ensure sustainable products and good ethical company practices, consumers should call for company transparency in products to ensure long sustainable practices.

Other than consumer awareness of knowledge, consumers should push for good ethical practices on the fundamental corporate level. Through pushing for a change in the business environment, and heightening the awareness towards good, ethical business practices on the most base business level, this will fundamentally change the ongoing business ethics of the larger environment.

References:

“Asian Cosmetics Summit tackles major ethical & ecological issues.” Eco-Business. Jul 23, 2012.

Web. http://www.eco-business.com/press-releases/asian-cosmetics-summit-tackles-major-ethical-ecological-issues/

Gumpert, David E. “Are Today’s Entrepreneurs Less Ethical.” Bloomberg Businessweek:

Small Business. Sep 30, 2003. Web. http://www.businessweek.com/stories/2003-09-30/are-todays-entrepreneurs-less-ethical

“Raising Ethical Issues at Work.” Harvard Business Review. Feb 22, 2010. Web.

            http://www.businessweek.com/managing/content/feb2010/ca20100223_354669.htm

The Ongoing Unethical Practices

What? Unethical?

Ongoing unethical practices in the cosmetic industry are evident and debatable. Currently, the most widely reported and notable unethical practice would probably be the unethical animal testing practices on the pre-supplier, research end of the business chain. Despite current Food and Drug Administration’s open regulations, not requiring the testing of products on animals before commercial release, many companies still choose to test their products on rabbits and rats. Although there are many other alternatives to unethical animal testing, such as human tissue cultures and sophisticated computer technology, companies still choose these unethical practices out of convenience and lowered budgets.

According to activist organization People for the Ethical Treatment of Animals, better known as, PETA there are actually many positive companies in need of ethical consumer support. PETA also keeps a list of the numerous ethical questionable companies that do, in fact, incorporate animal testing into their product research. However, the Harvard Business Review reports that despite the questionable ethics behind animal testing, some countries, such as China, still require “cosmetics to be tested on animals” (Jones 145). Companies such as Brazilian based 4Natura, known for its emphasis on all natural products and ethical practices, opted to not enter the competitive Chinese market due to these unethical regulations. 

Yes..and We Actually Have More…

Other than these practices of animal cruelty in China, according to The Economist, “Quality, cleanliness and safety, for instance, are still rare in a country where stories abound of fake baby milk and washed diapers sold as new.” Geoffrey Jones also asserts how “Avon’s recent problems in China – where allegations of bribery of local officials have tarnished its brand, damaged relations with sales representatives, and made possible a takeover bid by Coty” (145). Avon’s ethical problems in the Chinese market are reflected in its drastically lowered RNOA rate, or profitability ratings, though their business sales remain undisputed.

Other than animal testing debates and problematic developing markets, the cosmetic industry also faces other ethical challenges with the growing awareness of the general population. The Internet has also become both a blessing and problem for these developing cosmetic companies because of the many discussions on ethical and unethical business practices. Also, the popularity of the Internet has also resulted in a demand for higher emphasis on customer reviews and knowledge.

  

Guideline? Or Worse?

As early as 2006, Helena Spongenberg reports how the UN passed the “new Brussels guidelines,” forcing cosmetic firms to “disclose any reports they might have received of a product – ranging from perfumes to lipsticks – causing allergic reactions or irritant effects.” These new guidelines set in 2006 also force cosmetic companies to list their complete ingredients upon costumer request, reflecting the importance of complete consumer knowledge transparency as an ethical practice. Consumer complaints are also one of the most prominent ways the government can regulate companies and company marketing practices. As in the case of cosmetics, in which the overall industry that encourages costumers to spend more and look younger, medical and purely external cosmetics are often blurred. During these instances of dispute, the government often relies on populations such as doctors or in-the-know customers to make complaints to regulate companies.

However, according to Robert Mendick, exclusive discount offers that group medical procedures with cosmetic discounts are actually “not legally enforceable.” This was brought to light when discounts offered by a cosmetic company called Transform “have been criticized as unethical by senior surgeons who accuse.

Transform of encouraging women to undergo combinations of procedures that could increase the risk of complications.” These reports of unethical company behavior not only bring company ethics to the forefront, it also highlights consumer complaints as a real force in enforcing public judgments towards unethical practices.

However, despite these continuous calls for ethical behavior by the consuming public and activist organizations such as PETA, lawful regulations are still slow on the global scale. Other than the widely publicized and debated animal rights regarding cosmetic product testing in the research stages, there are actually still many underlining problems in the cosmetic industry that were only suggested and have yet to be put to the forefront.

Many of these problems regard developing countries and their various practices regarding cosmetic regulations. While countries like China still uphold unethical regulations demanding animal testing, more problematic is the local economy structure and the corrupt business and governmental relations. Such business practices are not only detrimental to a company in the long run, they are also negative press and associations in the present.

Furthermore, these practices would also reflect to the knowledgeable consumer about the core objectives of a company, suggesting that these companies are actually more in favor of business revenue than the overall benefit of society. When a cosmetic company has such a reputation in the industry and among customers, this can be a large obstacle for its company sustainability and growth in the long run. 

References:

Jones, Geoffrey. “The Growth Opportunity that Lies Next Door.” Harvard Business Review:

July-August 2012. p141-6. Print.

“Retailing in China.” The Economist. May 19 2011. Web.

            http://www.economist.com/node/7246087

Spongenberg, Helena. “Cosmetics Firms to Give Customers Info.” Aug 28, 2006.

Bloomberg Businessweek: Global Economics. Web. http://beta.fool.com/gibbstom13/2012/02/15/avon-beat-not-broken/2046/  

The Ethical Dilemmas

The Ethical Rules?

The present ethical rules that govern the cosmetics industry are complicated, as cosmetic rules are often blurred between consumer and health laws. Since many of the popular cosmetic companies in the industry are large global corporations, they are able to evade global industry production laws and restrictions. Furthermore, the ethics of the cosmetics industry is currently made problematic by the practices of the blurring of the cosmetic and health industry.

In “The changing face of skin care,” Amy Tsao talks about the increasing practices of dermatologists acting as skin-care cosmeticians. According to the article, “Plenty of dermatologists view selling cosmeceuticals as good medical practice.” While doctors certainly can help to educate the public about basic skincare, without regulations in the cosmetic industries, doctors might be able to be unreasonably paid for telling lies.

  

Responsibility! Action!

Doctors should not be able to recommend cosmetics without taking responsibility of their actions. Other than these present lack of boundaries between cosmetics and medicine, the present ethical regulations in the cosmetic industry in the States is increasingly better. Cosmetic companies have finally started to understand the need of asserting a positive and socially aware image. One of the businesses that started successfully mass marketing as an eco-aware corporation is The Body Shop.  

In The Economist “Idea: Corporate social responsibility,” Tim Hindle asserts how ethical business sells: ““Being good”, said Anita Roddick, founder of an “ethical” cosmetics firm, The Body Shop, “is good business.”” The Body Shop has shown how consumers are willingly to pay more for a community conscious product that does not harm the environment. This sense of community consciousness is one of the important marketing techniques and ethical consciousness that is gradually spreading in the cosmetic industry.

It is usually through the spread of these consciousnesses that become the force to enact laws and regulations. Other than these growing concerns, the actual regulations towards the cosmetic industry have also become increasingly ethical in the Western markets. “EU bans cosmetics with animal-tested ingredients” reports how while “industry trade body Cosmetics Europe said the ban comes too early and acts as a brake on innovation,” animals rights groups were highly encouraged by the ban.

 

This ban on animal-tested ingredients reflects the difficulties and paradoxes in setting up ethical rules today in the business world. The cosmetic industry, being such an intimate product with the consumer, requires high health regulation to ensure product safety. However, corporations have long treated animals inhumanely in the name of science to test products on animals. This ethical dilemma is seemingly resolved by banning the testing of human cosmetic problems on animals, however the real difficulty is in both ensuring the safety of these lab animals as well as the safety of the human consumers.

After animal testing is banned, corporations will be forced to either move their researching labs to areas with less restrictions, or create and innovate new ways in producing and researching cosmetic products. If the cost of innovation is too high, some companies might still resort to unethical research methods involving animal testing.

Moreover, animal-testing is just one dimension in the ethical issues in cosmetic industry regulations. The increased ease of cosmetic forums and product reviews has really changed the environment in cosmetic marketing strategies. Consumers have a heightened awareness of product ingredients and affects from such ingredients. Ethically conscious, all natural cosmetic brands have come to be a significant factor in both mass retail and departmental chains. With the success of Roddick’s The Body Shop, consumers have started to exhibit awareness towards the community trade and social responsibility, with some even critiquing the Body Shop for false advertising of sustainability. While awareness of the ingredients in cosmetic products reflects consumer awareness of their individual health, consumer awareness in community and social responsibility reflects consumer awareness in the overall goodwill of our future society.

Furthermore, Roddick’s marketing plan of incorporating all natural, globally conscious products has proved that cultural sustainability and consumer awareness is here to stay. This will only result in heightened restrictions of corporate ethics in the future. With this outlook of sustainability in the future, companies should brace themselves for the future restrictions to come, and start adjusting their company strategies towards more sustainable, social, and eco-friendly methods. It is important for companies to take a stance in funding a sustainable business plan because companies should uphold their social and ethic responsibilities back to societies.

Possible Outcomes

In upholding these responsibilities, companies will ensure they increase their target population and expand their profit margins. Since cosmetic companies have benefited greatly from this foundational force in globalization, cosmetic corporations should also pick up the social responsibilities as well. Through upholding social responsibilities, companies will be sure of their long-term welfare in this global economy as well.

As a result, companies that invest in ethical processes will also benefit in profit in the long term because of the increase call for ethically restrictive laws and regulations in countries everywhere.                        

                                                                                                            

References: 

Hindle, Tim. “Idea: Corporate social responsibility.” The Economist. Sep 9, 2009. Web.

            <http://www.economist.com/node/14298797>  

Tsao, Amy. “The Changing face of Skin Care.” Bloomberg Businessweek. Nov 29, 2004.

            Web. http://www.businessweek.com/stories/2004-11-29/the-changing-face-of-skin-care.

“EU bans cosmetics with animal-tested ingredients.” Bloomberg Businessweek. Mar 11, 2013.

Web. http://www.businessweek.com/ap/2013-03-11/eu-bans-cosmetics-with-animal-tested-ingredients