Circular Economy

Consumer

Consumer

Our products are synonymous with high quality and effective skin care the world over. Our aim is to meet our own high quality standards and the increased sustainability requirements while maintaining consumer trust in our products. To us, this trust also includes the responsibility to optimize the environmental compatibility of our products and to use resources responsibly in order to counteract negative environmental impacts.

The Executive Board is responsible for integrating product sustainability into our C.A.R.E.+ corporate strategy and at brand level. Since August 2022, the Corporate Sustainability Team has reported directly to the Chief Executive Officer. In addition, our Sustainability Council (see “Strategy” section) regularly aligns with senior management from Marketing and Research & Development and reports on ongoing projects and the status of target achievement, for example in the field of emissions reduction. We also leverage the expertise of various departments and external stakeholders such as suppliers and sustainability consulting firms to implement cross-functional and cross value-chain projects.

Holistic view of our products

It is important to us that we evaluate our products holistically according to their environmental and social impact. Life Cycle Assessments (LCAs) are used to list and summarize all of the environmental impacts for specific products, from raw material procurement to disposal. Based on this analysis, we create a life cycle assessment that shows what impact the product has on the environment and where there is still room for improvement. Beyond the use phase, the environmental impact of our products depends to a large extent on the raw materials and the resource efficiency of our packaging. This is why we focus our sustainability efforts on these areas.

Sustainable packaging

The consumption of natural resources has increased continuously worldwide over the past decades. Negative environmental impacts as well as waste production are steadily increasing and causing lasting damage to the environment. To counteract this, Beiersdorf is committed to strengthening the circular economy. For example, the ability to recycle our packaging and ingredients is extremely important to us.

Our packaging is largely made of plastics due to it’s light weight, high stability, and simultaneous flexibility. This means that we use materials that are mostly based on petroleum, a finite resource, which in many cases are not recycled. As a result, we are going to great lengths to optimize our plastic packaging in line with the sustainability principles of “avoid, reduce, reuse, and recycle,” thereby making our contribution to the circular economy. To make our initiatives in this area measurable, we have set ourselves the following global packaging targets by 2025:

• We aim to use 50% less fossil-based virgin plastic in our packaging in comparison to 2019
• We aim to integrate at least 30% recycled material into our plastic packaging
• We aim for 100% of our packaging to be refillable, reusable, or recyclable

In 2022, we made the following progress toward our goals:

• 15% reduction in fossil-based virgin plastics in our packaging (2021: 9%).
• 10% recycled material in our plastic packaging (2021: 7%).

Our third goal, recyclability, relates to the end of the packaging life cycle. To make our progress with respect to recyclability measurable, we introduced a new methodology in 2021 in line with the principles promulgated by the Ellen MacArthur Foundation¹. In 2021, recyclability was calculated on the basis of plastic bottle weight.

As announced in 2021, this reporting year we introduced “Design for Recycling,” a further metric that requires packaging to be recyclable in at least one country from the outset, even if this is not yet globally possible given today’s infrastructure. This means that all packaging that is already globally recyclable today also meets the Design for Recycling criteria.

Both goals, Design for Recycling and global recyclability, were extended in the 2022 reporting year not only to plastic packaging, but to all packaging types and materials used (plastic, metal, glass, and paper).

Global recyclability and Design for Recycling are evaluated digitally based on the methodology of an independent certification body. We then extrapolate the results of the analyses of individual packaging solutions to the portfolio as a whole.

As such, in the reporting year:

• 80% of all packaging was designed for recycling

In addition, the following share meets the requirements for global recyclability:

• 67% of all packaging was considered globally recyclable

Environmentally friendly product formulations

In order to optimize the recyclability of our product formulations, we have set ourselves goals both for eliminating the use of microplastics as defined by the United Nations Environment Programme (UNEP)², and for the use of biodegradable polymers. In order to track our progress more precisely and quickly, a comprehensive IT infrastructure project was initiated in the reporting year. As a result, data that was linked manually in the past can now be combined via a new user interface. Based on the historical availability of this data, these changes have resulted in an adjustment to the baseline year for the nonbiodegradable polymers target.

In this context, we aim to discontinue the production of Eucerin-brand cosmetic products containing microplastics by the end of 2023 by reformulating corresponding formulations.

That is why we are reporting on metrics that quantify the environmental impact and reflect the transformational status of our product formulas. For the year 2022, we can report the following progress in this regard:

• In terms of raw material volume, we reduced the use of microplastics by 76% between 2018 and 2022.
• At the end of the reporting year, 11 Eucerin formulations still contained microplastics. These are currently being updated and are also expected to be microplastic-free by the end of 2023.

With regard to the NIVEA brand, we already successfully discontinued the production of cosmetics containing microplastics at the end of the 2021 reporting year.

We also aim to use only biodegradable polymers in our European product formulations by the end of 2025. A polymer is a molecule consisting of many repeating subunits and is widely used in cosmetics. Biodegradability refers to the ability of molecules to be degraded by the action of microorganisms such as bacteria or fungi, thus preventing environmental pollution.

By gradually eliminating the use of nonbiodegradable polymers, we are pursuing the goal of reducing effects on the environment. We evaluate all raw materials with regard to their biodegradability. For this evaluation, we apply Annex XIII of the REACH Regulation and the corresponding guidance on information requirements (section R.11), which also contains the persistence criteria. These criteria describe the nonbiodegradable properties of a molecule over a specific period. The Annex and the guidelines on information requirements are used to identify polymers that are not biodegradable and are therefore to be avoided in our European product formulations by the end of 2025. To achieve this goal, we are not only directly replacing ingredients, but also developing completely new polymer technologies. As part of our continuous, individual raw material assessments, we obtained new evidence for numerous polymers in the reporting year confirming their biodegradability. As a result, we excluded these raw materials from the target achievement calculations. In addition, our assessment has also led to a more nuanced view of the silicones dimethicone and cyclomethicone. Since their classification as nonbiodegradable polymers is still scientifically disputed at present, they are reported separately for the reporting year.

We have already been able to reduce the use of nonbiodegradable polymers by 63% in our European product formulations compared to the 2018 baseline. This means that we reduced their share by a further 12 percentage points compared with the previous year. We were able to reduce the use of silicones by 23% compared to the 2018 baseline.

In addition, our goal is to increase the use of raw materials from renewable sources that are not derived from fossil sources, while at the same time enabling more sustainable sourcing. In this way, we aim to prevent negative environmental impacts caused by increased demand for certain raw materials (see the “Sustainable land use” section).

Partnerships in the field of product sustainability

To reduce the amount of climate-damaging carbon dioxide in our atmosphere, we are breaking new ground – in its new Climate Care moisturizer, NIVEA MEN uses ethanol obtained from recycled CO₂ from the company Lanzatech. In the carbon capture and utilization process, carbon is first collected and fed into a bioreactor. It is then fermented and subsequently processed into cosmetic ethanol and ultimately incorporated into skin care products.

Beiersdorf joined the EcoBeauty Score Consortium in early 2022. The goal of this initiative of more than 60 cosmetics and body care companies and associations is to create an easy-to-understand, globally applicable standard that promotes more sustainable consumption of cosmetics and skin care products. The initiative aims to use a points system to track the environmental impact of various products in a standardized way and communicate this information in a transparent manner to consumers – so that they can immediately see whether products are environmentally sustainable. The score is designed to take into account aspects such as packaging, formula composition, and environmental impact during the utilization phase.

Beyond that, we are supporters of the Ellen MacArthur Foundation (EMA). The EMA is committed to accelerating the transformation to a global circular economy and building a renewable and restorative economy. In this process, it collaborates with companies, academia, politics, and institutions. Within the foundation’s network, we discuss and exchange ideas with other members and develop new ones together.

In order to support new ideas relating to the circular economy beyond the influence of its direct business activities, Beiersdorf is a founding investor in the Emerald Technology Ventures Fund. The goal of this fund is to drive the development of advanced materials and industrial technologies to make packaging more sustainable throughout its life cycle. The venture capital firm Emerald Technology Ventures brings start-ups and experienced companies together for this purpose.

In addition, we are also investors in the venture capital fund Revent. This fund supports early-stage startups across Europe that want to use technology to drive systemic change – particularly in the fields of climate, food technology, health, and economic empowerment.