Accelerating the beauty industry’s adaptation to social and environmental challenges

The cosmetics sector is critical to the French economy. Consisting of around 3,200 companies, it represents nearly 246,000 jobs in France – 80% of which are in the regions – and generates a turnover of 45 billion euros. In addition, the industry makes a substantial contribution to French exports, which significantly impacts the country’s trade balance.

Today, this industry faces numerous ecological, regulatory, and reputational challenges: the use of natural resources (plants, water, etc.), energy consumption, waste management, and consumer health and safety, among others. Given this, the question industry is how can companies in the fashion industry reduce these risks, undergo profound transformation, and build a solid and sustainable strategy for the next twenty years?

The Federation of Beauty Companies (FEBEA) represents this sector and has set itself the mission of providing valuable assistance to its members. This means facilitating their eco-responsible transition trajectory by offering them a clear analytical and methodological foundation. By working on the regulatory compliance obligation to which they are subject, the FEBEA will ensure that members can build their long-term environmental, social, and governance (ESG) roadmap.

In an increasingly demanding regulatory environment, the cosmetics sector must face significant challenges to meet new reporting standards. The CSRD places particular emphasis on double materiality, which considers both the impacts of companies’ activities on the environment and society, as well as the impacts of ESG issues on their financial value. In response to this regulatory focus and to fulfill its role more effectively, the FEBEA decided to improve its ability to analyze the ESG impacts and opportunities in the industry.

A participatory methodology for concrete results

To carry out this analysis, the organization engaged Capgemini Invent to develop a new method for ESG analysis. Together, the partners reviewed the information needed by industry companies and the logistical challenges the Federation faced.

Based on their joint conclusions, the FEBEA and Capgemini arranged and managed a participatory approach that actively involved members through individual interviews, co-reflection workshops, and a feedback webinar bringing together more than 130 participants. This method identified divergences and convergences based on companies’ strategies while adjusting the conclusions based on feedback, thus strengthening companies’ commitment to co-constructing adapted solutions.

The analysis revealed that the cosmetics sector faces a variety of material issues related to the environment as well as social and governance fields. Moreover, French cosmetic companies place a high priority on climate change, the use of natural resources, consumer health and safety, and business ethics.

An analysis providing value to both FEBEA and its members

The double materiality exercise constitutes a first step towards CSRD compliance, structured around three key stages: adaptation of the analysis, deployment of reporting, and data management optimization. These stages will provide a solid methodological foundation for each member to build and reliably ensure their compliance. The double materiality analysis identified the priority topics to address for the first CSRD reporting exercise in 2025. Meanwhile, it facilitated stakeholder dialogue, prepared companies for new requirements, and improved ESG performance comparability, structuring a coherent approach to ESG issues at the sectoral level.

Although the diversity of business models within the sector led to varied perceptions of ESG issues, the FBEA and Capgemini Invent expect a progressive convergence of practices as companies adapt to new regulatory requirements.

Now with this new analytical methodology established, the FBEA is positioned to more effectively provide its members with a clear vision of the primary upcoming risks for the cosmetics sector, as well as the opportunities that will help build sustainable and responsible cosmetics for tomorrow.