What requirements must natural ingredients for cosmetics comply with to be allowed on the European market?

The demand for natural ingredients in cosmetics is providing exciting opportunities for suppliers in developing countries. At the same time, the regulations for placing cosmetics on the European market are some of the most stringent in the world, and manufacturers and cosmetics brands are having to respond to increasing expectations from consumers and governments in order to meet higher standards for social and environmental responsibility. This translates into a large number of requirements that suppliers must satisfy.

1. What are the mandatory requirements for natural ingredients for cosmetics?

The starting point for understanding the mandatory requirements in the European Union (EU) for natural ingredients used in cosmetics, or any substance used as a cosmetic ingredient, is the European legislation on cosmetic products. This legislation is aimed directly at companies that place cosmetic products on the European market. It includes requirements for substances used in cosmetics. Companies placing cosmetics on the European market must ensure that the substances they use in those products comply with those requirements. In the medium to long term, these requirements will become more stringent, and they will likely include social and environmental due-diligence legislation for all global supply chains that reach Europe.

To respond to the requirements and expectations of European customers, the key requirement for you as a supplier is to have detailed knowledge of 100% of the composition and safety of your ingredient. In some cases, you should also know its efficacy in relation to certain cosmetic benefits. Once you can provide this level of data, you will be able to sell a high-value cosmetic ingredient rather than a low-value raw material. The data will allow your customer and, ultimately, the manufacturer of the cosmetic product to draw conclusions about the maximum safe concentration of the cosmetic ingredient to achieve a desired functionality or cosmetic claim (efficacy) for their cosmetic product. As you read through the information presented below, you will understand why this is necessary. See also Figure 2 for a summary of the requirements.

The key pieces of legislation with which you should be familiar are as follows:

• Cosmetic Regulation (EC 1223/2009) is the primary regulation for cosmetic products for the EU market, ensuring a high level of protection for humans. It is especially advisable to focus on Chapter 4 and Annexes I–VI of this regulation. For the UK, the cosmetics legislation is almost a copy of the EU legislation.

Chapter 4 of the European Cosmetic Regulation presents information about the restrictions for certain substances used in cosmetics. The restrictions are detailed in Annexes II–VI.

Annex I is a report that the manufacturer of a cosmetic product must prepare, containing all details of the product and its ingredients.

Annex I: Cosmetic Product Safety Report (CPSR). The CPSR is prepared by a manufacturer of a cosmetic product, and it is submitted to the European authorities as part of the notification process. As a supplier, it is very useful to have good knowledge about the data on ingredients that the manufacturer must include in this report. The data included in your technical documentation (see below) should therefore match what is required. The following list of requirements must be included in the CPSR by the manufacturer, and it thus forms the basis of your technical documentation:

• Chemical identity of the substances (incl. chemical name, INCI, CAS, EINECS/ELINCS, where possible) and their intended function
• Physical and chemical characteristics of the substances or mixtures
• Microbiological specifications of the substance or mixture
• Purity of the substances and mixtures
• In the case of traces of prohibited substances, evidence of their technical unavoidability
• Toxicological profile of substances contained in the cosmetic product for all relevant toxicological endpoints. A particular focus on local toxicity evaluation (skin and eye irritation), skin sensitisation and, in the case of UV absorption, photo-induced toxicity shall be made.

The final bullet point regarding toxicological profile is usually included in the Safety Data Sheet (see below). If the ingredient you are selling is already well known, and especially if it is known and not hazardous, then you will be unlikely to be asked for this toxicological data. If it is a new ingredient, however, or if it is hazardous, this information will be requested. In most cases, toxicological data on well-known hazardous substances (e.g. well-known essential oils) will already be available. See the section below on the Classification, Labelling and Packaging of Substances and Mixtures.

Annex II: Prohibited substances

At the time of writing this study there were 1,694 prohibited substances. This number increases regularly.

Some of these substances can be found as contaminants in legally permitted substances. For example, if you are selling cold-pressed unrefined sesame seed oil, it might contain lead (Pb). Lead is a prohibited substance in cosmetics, as are other heavy metals. A buyer may therefore be unwilling to purchase your vegetable oil, as cosmetics manufacturers may be unable to use it in their cosmetic products if the lead cannot be reduced to safe concentrations.

Annex III: Restricted substances

At the time of writing this study, there were 324 restricted substances that must not be used in cosmetics, except subject to the restrictions in this annex. This number also increases regularly. In the case of natural ingredients for cosmetics, examples of restricted substances include the allergenic substances found in most essential oils.

For example, if you are producing black pepper essential oil or nutmeg essential oil or a citrus oil, it is highly likely that it contains d-Limonene. This is one of the 26 allergens found in essential oils. D-Limonene is listed in Annex III as a restricted substance. The presence of the substance must be indicated in the list of ingredients if its concentration exceeds 0.001% in leave-on products, or 0.01% in rinse-off products. Other restrictions relate to product types, the parts of the body where the product is used and the maximum concentration. If you are a supplier of an essential oil, it would be advisable to prepare an Allergen Declaration that lists the concentrations of the 26 allergens in your essential oil.

Annexes IV, V and VI

These annexes refer to the lists of colours, preservatives and UV filters permitted in cosmetic products.

If your ingredient has any of these properties and it is not included in one of these annexes, it cannot be used for that primary purpose. For example, a natural colour that is not included in Annex IV cannot be used as a colourant as its primary use. You can apply to the Scientific Committee on Consumer Safety of the European Commission to have your ingredient listed in one of these Annexes. You will need to prepare a safety dossier, and the average cost of this will be in excess of €100,000. New substances are rarely added to these three annexes.

• The second key legislation with which you should be familiar is Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals, more commonly known as REACH. The REACH system aims to ensure a high level of protection of human health and the environment, including the promotion of alternative methods for assessing the hazards of substances. More information about REACH is provided below.
• The third key legislation with which you should be familiar is the Classification, Labelling and Packaging Regulation (CLP) EC No. 1272/2008)

The purpose of the CLP is to ensure a high level of protection for health and the environment, as well as the free movement of substances, mixtures and articles. It is the only legislation in force in the EU for the classification and labelling of substances and mixtures.

The CLP legislation is based on the Globally Harmonized System of Classification and Labelling of Chemicals of the United Nations. Many countries have adopted the GHS into their own legislation. For this reason, the requirements of the CLP regulation will be familiar to non-European companies that need to classify, label, package and transport chemicals in their own countries. The CLP data have been incorporated into several sections of the Safety Data Sheet. One aspect of the European management of the CLP legislation that is of value to non-European companies is that the CLP notifications made by EU manufacturers and importers are published by the European Chemicals Agency (ECHA).

REACH

REACH and CLP are important pieces of legislation for European companies that import or manufacture substances used in cosmetics. EU companies must follow the requirements of Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and the Classification, Labelling and Packaging (CLP) legislation. At the same time, however, even though REACH and CLP apply directly only to European companies, it is useful for non-European companies to know how REACH works, as there is a mechanism—the Only Representative (presented below)—whereby a non-European company can participate directly in REACH. This can yield commercial advantages.

EU and EEA (European Economic Area) companies that manufacture and import chemicals are responsible for the safe use of their products, and they must register their chemicals. Under REACH legislation, they must assess whether their chemicals might cause adverse effects to human health and the environment. This is done according to reliable tests or the use of alternative information that has been scientifically justified and presented in a registration dossier.

The underlying safety principle of REACH is that greater quantities that are manufactured or imported pose greater risks to human health or the environment. The amount of data required in the registration dossier thus depends on the quantities that are manufactured or imported annually.

The larger the volume, the more data will be required to be included in the registration dossier. Four tonnage bands are used to guide manufacturers or importers with regard to the amount of data required: 1–10MT, 10–100MT, 100MT–1,000MT and greater than 1,000MT.

A chemical substance that is imported or manufactured by a European company at less than 1MT per year falls outside the scope of REACH. Note that this is different from exemption from REACH. An exempt substance has intrinsic properties that are determined to be safe for human health and the environment regardless of the quantities imported or manufactured annually in Europe.

One fact about REACH is that the costs of preparing a registration dossier are prohibitively high for many companies, especially SMEs. Therefore, to share the costs and reduce the number of times that a test must be repeated for the same chemical (especially tests on animals), many companies organise themselves into a consortium (formally known as a Substance Information Exchange Forum, or SIEF) for that chemical substance.

Successful registration of the chemical substance by the consortium results in each member of the consortium being awarded a unique registration number for that substance, and a permitted maximum tonnage of that substance can then be imported or manufactured by that company per year. Every European importer or manufacturer must obtain a registration number for every substance that they import or manufacture above 1MT per year, unless the substance is exempt.

While REACH covers all chemical substances imported or manufactured in the EU, certain classes of chemicals are exempt from its registration procedures. This includes vegetable oils, as they are non-hazardous. In contrast, essential oils are not exempt from REACH.

One key aspect of REACH is that it contains the requirements for Safety Data Sheets (PDF, see the section on technical documentation below). All substances, including natural ingredients for cosmetics, must have their own Safety Data Sheet when they are transported to and within Europe, regardless of the quantities that are imported or manufactured. Under international rules for classification and labelling, non-EU companies must also have a Safety Data Sheet to transport their chemical substances to the EU from the place of manufacture.

Only Representative

Although REACH applies directly to European manufacturers and European importers, there is a mechanism whereby a non-European company can join a substance consortium by setting up a European agent to represent them in the consortium. This agent is known as the Only Representative (OR). The advantage of setting up an OR is that the non-European company acquires a REACH registration number for its substance. This gives the non-European company the right to sell in Europe up to the maximum amount of chemical linked to its registration number. Without their own registration numbers, non-EU companies are restricted to (a) selling to European companies who have a registration number for that substance, or (b) selling up to 1MT per year to a company that does not have a registration number. Option (b) is commercially viable for some chemicals, provided that the exporter can find enough customers in Category (b). Conversely, an EU company that does not have a REACH registration number is limited to importing up to 1MT of a particular chemical per year. If the company wishes to buy more than 1MT per year, it must either obtain its own registration number, buy from another European company or buy from a non-European company that has an OR in the consortium. This gives an advantage to the non-European company with an OR. It increases the value of the company and places the company in competition with other exporters, as well as with other companies in the European consortium.

One disadvantage of setting up an Only Representative is that the cost of obtaining the REACH registration number can amount to around €40,000–50,000.

In summary, exporters from developing countries have two options with regard to REACH:

1. Avoid REACH registration by:

(a) exporting to companies that have REACH registration or

(b) selling less than 1MT per importer per year

(2) Participate in REACH by establishing an OR and pay the fees to join the consortium for their chemicals or substances

The second option is a commercial decision, and not a requirement. You will need to weigh the advantages and disadvantages of selling small volumes to many customers versus selling larger volumes, if you are higher up the value chain and have the ability to bypass traditional importers who are members of a consortium. Note that both options will require you to prepare Safety Data Sheets.

For the UK, there is UK REACH. It is almost a mirror image of EU REACH, with similar roles and responsibilities. In addition, EU REACH continues to apply in Northern Ireland under the Northern Ireland Protocol.

The REACH legislation has undergone various amendments and updates since its first publication in 2007. All amendments are published on the website of the European Chemicals Agency (ECHA). Two recent amendments of note are Commission Regulation (EU) 2020/878 of 18 June 2020 amending Annex II and Commission Regulation (EU) 2022/477 of 24 March 2022 amending Annexes VI to X (PDF).

Of particular relevance to you as an exporter of natural ingredients is Commission Regulation 2020/878, as it concerns the preparation of Safety Data Sheets. There are updates to the general requirements for:

• Compiling and formatting a Safety Data Sheet
• Updates to the required supplier details
• Updates to the other sections, including Section 1 (identification of the substance) and Section 3 (composition/information on ingredients), in addition to other updates throughout

For full details, refer to the actual legislation and the ECHA guidance for safety data sheets (PDF). Version 4.0 of this Guidance includes the update from Commission Regulation 2020/878. The deadline to be compliant with the requirements of Commission Regulation 2020/878 is 31 December 2022.

Commission Regulation 2022/477 concerns updates to the requirements for the dossiers that are prepared for each substance within the scope of REACH for the various volume bands. These updates are relevant to the members of the consortia, including Only Representatives.

There is no legal definition of a natural cosmetic ingredient

Despite all the attention given to the opportunities for using natural ingredients in the manufacture of cosmetic products, there is no legal definition of a natural (or organic) cosmetic product. Furthermore, the Cosmetics Regulation does not contain a legal definition of a natural ingredient. All cosmetic products sold in Europe must comply with the European regulation for placing cosmetic products on the European market.

The lack of legal definition highlights the fact that, regardless of the ingredients used to make a cosmetic product, (1) all cosmetic ingredients must be used at safe concentrations, based on scientific data, and (2) the final combination of all ingredients in a cosmetic product, must be safe, based on a safety assessment. Product safety is further supported by justifiable claims about the cosmetic product and clear labelling on the final product about the ingredients, the function of the product and any precautions.

The lack of a legal definition has created space for private certification companies and the International Standards Organisation (ISO) to establish their own criteria. This is discussed in the section on additional requirements and certifications.

Examples of natural ingredients used in cosmetics

It is worth noting that natural ingredients for cosmetics can be categorised into three groups: vegetable fats and oils; essential oils; and other plant extracts and derivatives. This can result in differences in the technical documentation, as well as in the parameters that are used to describe and quantify the safety, efficacy and quality of the ingredient.

Vegetable fats and oils

Vegetable oils and fats are a key component of cosmetic products. They provide moisturisation and are incorporated into emulsions to make body and face creams. Vegetable oils are also the basic material for soap and soap-like ingredients. All vegetable oils have a similar chemical structure. They are composed of triglycerides or fatty acids. Different oils have different compositions with regard to their fatty-acid profiles. Different fatty-acid profiles perform differently in cosmetics. For this reason, the fatty-acid profile is one of the most important parameters to include in your technical documentation.

Essential oils

Essential oils are natural plant extracts. They can contain hundreds of different chemicals. These chemicals are known for their fragrant properties, as well as for their anti-bacterial properties and their effects on moods and emotions. Essential oils are powerful chemicals. Some of them can cause very serious health problems. Others can cause adverse skin reactions. Essential oils are more easily flammable than vegetable oils. All of these properties must be included in the technical documentation.

Other plant extracts and derivatives (botanicals)

Botanical extracts typically contain the active components that are used in cosmetics to be able to make claims such as anti-ageing, reducing wrinkles, hydrating skin and soothing sensitive skin. Many hundreds of plants have cosmetic properties, and many more are to be found and developed. The challenge of botanical extracts is that most non-food plants are toxic. For this reason, safety studies are required to determine safe concentrations of use, in addition to efficacy studies to demonstrate the presence of cosmetic properties at safe concentrations. Of the three types of cosmetic ingredients, botanical extracts are the most commonly introduced as new ingredients each year.

Technical documentation

Technical documentation is used to present data about the cosmetic ingredient to the manufacturer of the cosmetic product in relation to the requirements of the legislation. This documentation is prepared by the first supplier, and it progresses along the supply chain until it reaches the manufacturer. Along the way, the technical documentation may be updated if more data are added or if changes are made to the original ingredient.

At minimum, you will need to prepare the following three documents:

• Specification
• Certificate of Analysis
• Safety Data Sheet

More details about how to prepare these documents are provided in the CBI workbook for preparing a technical dossier for cosmetic ingredients. More details are also provided in the product Factsheets about essential oils, sesame seed oil and mango butter. See also Figure 2 for a summary of buyers’ requirements.

The specific parameters for the three different types of natural ingredients used in cosmetics can differ. However, the requirements listed in Annex I of the Cosmetics Regulation are a fundamental requirement for all cosmetic ingredients.

In addition to the information listed above, the following data are required to achieve 100% knowledge of the composition of the ingredient.

CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)

CITES is an international agreement that aims to ensure that international trade in specimens of wild animals and plants does not threaten the survival of the species. To export cosmetic ingredients to the European market, you must comply with requirements on trading plant resources that have been agreed internationally under the Convention on International Trade in Endangered Species of wild fauna and flora (CITES). This is because the EU has translated CITES into EU law under Regulation No 338/97. In addition, your own country is likely to be a signatory of CITES, meaning that you must comply in order to meet your national laws. European buyers can be expected to ask you questions about this.

There are three Appendices to CITES:

• Appendix I includes species that are threatened with extinction. Trade in specimens of these species is permitted only in exceptional circumstances.
• Appendix II includes species that are not necessarily threatened with extinction, but in which trade must be controlled in order to avoid uses that are incompatible with their survival.
• Appendix III includes species that are protected in at least one country, which has asked other CITES parties for assistance in controlling the trade.

In some cases, EU regulations can go beyond the CITES requirements. It is therefore important to consult the EU regulation. There are four annexes to the EU regulation. An import permit is required for species listed in Annex A and Annex B, and an import notification is required for those listed in Annexes C and D. Check to see if your ingredient is listed in any of these annexes of Regulation 338/97. The CITES database also keeps records about the EU regulation.

Convention on Biological Diversity (CBD) / Access and Benefit-Sharing (ABS)

To export cosmetic ingredients to Europe, you must comply with requirements on using plant resources agreed under international treaties and protocols within the Convention on Biological Diversity (CBD). European buyers can be expected to ask you questions about this. This is because the CBD is a part of EU law. In addition, your own country is likely to be a signatory, meaning that you must comply with laws in your country.

The Nagoya Protocol On Access and Benefit-Sharing (ABS) website provides guidelines for accessing and utilising genetic resources and traditional knowledge, as well as on the fair and equitable sharing of benefits. Similar to the CBD, European companies must comply with ABS legislation, which is also likely to be a part of your own national laws. As an exporter of essential oils to the cosmetics sector, you should be sure to abide by ABS legislation.

2. What additional requirements and certifications do buyers request in the natural ingredients for cosmetics sector?

In the cosmetic ingredients industry, there is a wide range of certifications and standards to choose from, covering ethical sourcing, responsible sourcing, fair trade, and natural and organic designations. All these standards fit under the broad umbrella of sustainability. Natural, organic and fair trade are more relevant for niche markets, given that products conforming to these standards represent only about 5% of the European market. However, social and environmental responsibility in the supply chain can no longer be considered optional.

Social and environmental responsibility

Buyers are increasingly asking suppliers for evidence of activities that are making a positive contribution to social and environmental responsibility. In other words, buyers want to know whether the company is making money responsibly. Although this was considered more of a niche requirement in the past, it is now becoming mainstream. At one level, many companies in the sector are aligning their activities to the United Nations Sustainable Development Goals (SDGs). At another level, companies are seeking certification around various themes, including natural, organic, Fairtrade, ethical trade and biodiversity conservation.

Figure 1: A selection of logos relating to sustainable development

Source: Fair Venture Consulting

Two mainstream options for companies are Sedex (Supplier Ethical Data Exchange) and the United Nations Global Compact. Neither of these options is third-party certified, although Sedex has an option whereby companies can choose to have an external audit of their operations. This audit is known as a SMETA (Sedex Member Ethical Trade Audit). Many buyers look for suppliers that are aligned to their own ethical and sustainability principles and standards.

For suppliers, Sedex membership costs £110 per year per factory site. It is a great way to progress with your company’s social and environmental activities and showcase your company to buyers who also subscribe to Sedex. It provides many resources to help companies understand and comply with the requirements.

One good example of a company that has adopted social responsibility principles is Givaudan. This company sells fragrances and flavours to the cosmetics and food industries. It also sells natural ingredients. The website features a ‘Position statement on Givaudan’s commitment to social responsibility’.

Givaudan participates with Sedex and the UN Global Compact. 

More specific details about how Givaudan purchases the inputs for its business are provided in the Givaudan Responsible Sourcing Policy.

Traceability

The starting point for much of the work around social responsibility is traceability. European companies need to know where your raw materials have originated from and, more importantly, the social and environmental standards that you are implementing within your own supply chains. One of the benefits of certification is that it typically includes traceability, which has the additional benefit of third-party accreditation. The tables below highlight the important certifications and self-assessments that you should consider.

Table 1: Overview of key certifications

Name of certification body	Type	Cost for Companies	European market most used in	Further information
Sedex/SMETA	Ethical certification. With the increasing emphasis on responsible sourcing, the SMETA certification is becoming increasingly popular and recognised by major international buyers	Sedex membership, plus a fee of £50 to Sedex, plus the fees for the audit conducted by a certification organisation accredited by Sedex	UK, France, Germany, Netherlands, Spain, Switzerland	SMETA is a third-party audit conducted under the auspices of Sedex. Companies have the option of obtaining SMETA certification after completing the Sedex self-audit (see below)   https://www.sedex.com
UEBT	Sustainable use of biodiversity, and Access and Benefit Sharing	Membership fees are based on the total annual revenue of the member organisation	France, Germany, UK, Spain	https://uebt.org
NATRUE	Natural and organic for final products and for raw materials. Raw materials can be certified (from organic agriculture) or approved (for conventional ingredients)	Approved ingredients: €50 per ingredient for 24 months, plus the cost of the evaluation by the certification body (approx. €200 per ingredient every two years). Costs for certified ingredients depend on the organic certification.	Germany, Switzerland, Italy, Austria	https://www.natrue.org/our-standard/certification-process-step-step/
COSMOS	Natural and organic. Also have Approved or Certified (when a product contains organic certified content) status for ingredients.	Fees provided by certification bodies For example: Flat rate: €800 for the certificate Audit: €500 per day COSMOS fees: €4 per ingredient Annual variable rate: €200 Testing fees charged to company   A common COSMOS licence fee applies to all products and ingredients, and it is charged by each Certification Body	Italy, Germany, France, UK	Certification: https://www.cosmos-standard.org     Fees: https://icea.bio/wp-content/uploads/documenti/Attachment-1-list-of-fees-COSMOS-Ed.01-Rev.03-24.04.2020.pdf   https://www.soilassociation.org/media/23211/fees-for-certification-of-health-beauty-products-and-inputs-to-cosmos-and-sa-standards.pdf
Fairtrade	Social, economic and environmental	Depending on the size of the organisation, number of workers and number of products	Germany, UK, France, Italy	For a cost calculator: https://www.flocert.net/solutions/fairtrade/cost-calculator/   For Fairtrade: https://www.fairtrade.net
Fair for Life	Social, economic and environmental	The use of the FFL label is free of charge for certified operations. You pay only the costs of audit and certification.   Certification costs vary depending on the size and complexity of your operation/supply chain, the certification(s) for which you apply, the location of your operation and of producers (local costs and travel time), and whether or not you are already certified organic or have other certification.	France, Germany, UK, Spain	FAQs about Fair for Life: https://www.fairforlife.org/pmws/indexDOM.php?client_id=fairforlife&page_id=materials&lang_iso639=en   Fair for Life: https://www.fairforlife.org/
FairWild	Social, economic and environmental for wild-harvested ingredients	The costs of the certification audit are calculated individually.   They depend on the location, size and complexity of operations, and they include the audit, evaluation, certification and office costs.   The time needed to achieve compliance with FairWild requirements also depends on the status and organisation of the project.	Germany, France, Italy, UK	FairWild Fees: https://static1.squarespace.com/static/5bec424b297114f64cb908d8/t/60f58a741d3507074239b4e2/1626704539018/FairWild_certification_explanation_of_costs.pdf     About FairWild: https://www.fairwild.org

Source: Fair Venture Consulting

Table 2: Overview of key self-assessments

Third-party certification and approvals can strengthen the credibility of your company and your ingredients. Table 2 presents details of three widely recognised self-assessment schemes that can serve as a stepping stone to certification, whether for ethical performance or for communicating the extent to which your ingredients are natural.

Name of certification body	Type	Cost for Companies	European market most used in	Further information
Sedex	Ethical self-assessment Questions are based on the four SMETA pillars: Labour Standards; Health and Safety; Business Ethics; and Environment.	£110 per year per site	UK, France, Germany, Netherlands, Spain, Switzerland	Sedex (Supplier Ethical Data Exchange) is a platform where buyers can find information about the ethical credentials of suppliers. It starts with a self-assessment and offers the option of a third-party audit (SMETA) (see above)
UN Global Compact	Human rights, labour, environment and anti-corruption.	No fees for small and medium-sized companies	Worldwide	A voluntary initiative open to any company that is serious about its commitment to working towards implementing the principles of the UN Global Compact and communicating its progress.   The UN Global Compact has 10 principles. Companies that join commit to making these principles part of their strategy, culture and day-to-day operations   https://www.unglobalcompact.org/what-is-gc/mission/principles
ISO16128: parts 1 & 2 -	Natural and organic	This is a voluntary application of the ISO standard. No requirement for third-party certification	UK, Spain, France	https://www.iso.org/standard/62503.html

Source: Fair Venture Consulting

Future developments: Sustainability

Looking to the future, the most important emerging developments to be aware of are the European Green Deal and the corporate sustainability due diligence directive. The starting point for these developments is the key role that companies play in building a sustainable economy and society.

The European Green Deal is a framework for a series of actions around climate, agriculture, energy, industry and the environment. The aim is to transform the EU into a modern, resource-efficient and competitive economy, ensuring: no net emissions of greenhouse gases by 2050, economic growth decoupled from resource use and no person, and no place left behind. As part of the Green Deal, the European Commission has also developed a Chemicals Strategy for Sustainability (PDF), which includes a revision of REACH legislation.

The aim of the Corporate Sustainability Directive is to foster sustainable and responsible corporate behaviour and to anchor human rights and environmental considerations in the operations and corporate governance of companies. The new rules will ensure that businesses address the adverse impacts of their actions—including within their value chains, both inside and outside Europe—on human rights (e.g. child labour and worker exploitation), as well as on the environment (e.g. pollution and biodiversity loss).

Neither of these proposals will have a direct impact on you as an exporter, as the obligations are placed on European companies. At the same time, however, if you are part of a global supply chain for a European company, you will be affected by the obligations imposed on European companies. More specifically, European companies will be expected to put in place activities that conform to the expectations of these two proposals when they become law. To supply European companies, you will therefore also need to comply with these criteria.

One example of a European industry that is already taking steps to incorporate these new proposals into its operations is the International Fragrance Association (IFRA). This association has developed policy recommendations for the European Green Deal and Chemicals Strategy for Sustainability.

As part of its preparation of the policy recommendations, IFRA conducted a study to assess the impact of the EU chemicals strategy for sustainability. The study indicated that more than a quarter of the industry’s portfolio (in terms of turnover) would be affected in some way by the proposed changes, with knock-on effects on consumers, and with a reduction in the selection of products that people consider important to their mental and physical well-being. In response to the growing importance of sustainability, IFRA has also produced a Sustainability Charter, in collaboration with the International Organisation of the Flavour Industry (IOFI).

Quality management standards

European buyers of natural ingredients for cosmetics are increasingly using quality management standards when assessing the credibility of prospective exporters. The adoption of quality management standards can give you credibility, as it shows your commitment to delivering high-quality ingredients), while also giving your company a favourable image. It can also help to demonstrate your compliance with mandatory requirements.

There is a quality management standard specifically for the cosmetics ingredients industry. This is the Good Manufacturing Practice (GMP) Certification Scheme of the European Federation for Cosmetic Ingredients (EFfCI) (PDF). It is based on ISO9001:2015. If you already have ISO9001 certification and supply cosmetic ingredients, it is recommended to add this EFFCI module. If you supply cosmetic ingredients and do not have ISO9001, it is recommended that you consider investing in this certification, or at least to be familiar with the requirements of the EFfCI GMP scheme and develop your quality systems accordingly. Initially, you can do this without certification. A useful checklist is available to accompany the actual GMP guide (PDF).

Useful standards for companies whose products are sold to both the international food industry and the cosmetics industry include ISO 22000 and Food Safety System Certification FSSC) 22000. The Codex Alimentarius standards can also be referred to, although certain standards (e.g. for heavy metals and other contaminants) are stricter for the cosmetics industry. At a minimum, you should have a documented HACCP (Hazard Analysis and Critical Control Point) system. The HACCP plan can be adapted to follow the critical requirements listed in Annex I of the Cosmetics Regulation, as detailed above. In particular, the HACCP refers to physical and chemical characteristics, microbiological specifications, purity and traces of prohibited substances.

Labelling and packaging

Your product labelling should include the following information:

• International Nomenclature Cosmetic Ingredient (INCI) name and product name
• Name and address of exporter
• Batch code
• Place of origin
• Date of manufacture
• Best before date
• Net weight
• Recommended storage conditions
• Organic certification number, along with the name/code of the certifying inspection body if you export organic-certified ingredients.
• Use drums that conform to UN standards.
• Ensure that packaging materials (e.g. drums) are clean and dry
• Flush the headspace with nitrogen

Figure 2: Summary of buyers’ requirements

Source: Fair Venture Consulting

3. What are the requirements and certifications for niche markets in the natural ingredients for cosmetics sector?

Natural ingredients are, and always have been, an important component of all cosmetic products. However, the lack of specific regulations governing the definitions of natural and organic in cosmetics has resulted in the emergence of private standards to substantiate claims made by companies about the natural and organic status of their products and/or ingredients. These natural and organic certifications represent a small, but increasingly important part of the cosmetics market. Fairtrade has been associated with cosmetics for more than 30 years. Although it is a small part of the market, Fairtrade-sourced ingredients continue to make an important contribution to social development.

Organic, natural and fair trade

The leading organic and natural standards for cosmetic ingredients are:

• NATRUE
• COSMOS

Both of these private standards are well established in the cosmetic ingredients market. They have similar, but not identical definitions for organic and/or natural ingredients and for natural and/or organic cosmetic final products. The ingredients can be either certified (with organic content) or approved (non-organic).

The International Standards Organization has also introduced a two-part natural and organic standard for cosmetics and cosmetic ingredients (ISO16128 part 1 and 2). Apart from the purchase of the ISO standard, companies can introduce the ISO standard to their supply chain without paying for certification costs. One criticism is that this is self-certification, and not third-party certification. It also has several positive aspects, however, primarily that it is a low-cost approach to demonstrating natural and organic status. There barriers to entry for natural and organic products are lower, which should lead to an increase in the number of companies developing natural and organic products. Several major companies use this standard.

Various certifications pertain to social and environmental standards. They include:

• Fairtrade International. There are Fairtrade prices for many ingredients (organic and conventional)
• Fair for Life standards. A number of ingredients that are already Fair for Life certified
• FairWild, which certifies the use of sustainable collection, social responsibility and fair-trade practices
• UEBT certifies practices that respect people and biodiversity in the way ingredients from biodiversity are grown, collected, researched, processed and commercialised

This study was conducted on behalf of CBI by Fair Venture Consulting.

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