ESRS S4 – Consumers and End-users

Material Impacts, Risks, and Opportunities

In the double materiality assessment, Beiersdorf has identified impacts, risks and opportunities in relation to the topic consumer health and safety.¹ Firstly, potential negative impacts on consumers could occur. Even though our cosmetic, medical and medicinal products undergo extensive (dermatological) testing, we cannot guarantee that all products will be well-tolerated by every consumer. Using a product on the skin may cause reactions like irritant or allergic contact dermatitis.

We also identified a material risk concerning consumers and end-users. Selling products that are unsafe or fail to meet quality standards can lead to serious consequences, such as product recalls, financial losses from recall costs, product destruction, and potential legal actions. Additionally, it can damage the company’s reputation.

Moreover, we have identified an opportunity in relation to consumers and end-users in our downstream value chain. Focusing on high-quality, safe, environmentally benign and health-promoting products, Beiersdorf can differentiate its brands in the market, build a loyal customer base, and credibly position itself as a leading company in the health-conscious cosmetic industry. Complementing the above mentioned opportunity, Beiersdorf has an identified positive impact on consumers we serve as our products contribute to preventing or treating skin diseases and injuries.

A detailed overview of all identified impacts, risks and opportunities and the methodology of the double materiality assessment can be found in the chapter “ESRS 2 – General Disclosures.”

Policies Related to Consumers and End-Users

A team of experienced, highly qualified safety assessors and regulatory managers ensures that we meet both legal and our own requirements regarding the quality of our products as stipulated in relevant company policies. These policies provide an encompassing framework to manage our material impacts, risks and opportunities concerning consumers and end-users.

The team performs all legally required evaluations and approvals of our raw materials, formulas, packaging materials, and product claims to verify their safety and compatibility for consumers. Our safety assessors only approve finished cosmetic products for market release after evaluation in accordance with internationally recognized rules for safety assessment set out in the “EU Cosmetics Regulation 1223/2009” and the requirements of the “SCCS Notes of Guidance” in their 12th revision from 2023. The latter are published by the “Scientific Committee on Consumer Safety” (SCCS) and are applicable EU-wide.

Global Quality Policy

The “Global Quality Policy” outlines Beiersdorf’s commitment to quality, regulatory compliance, and consumer satisfaction. This policy serves as a guiding principle for decision-making and setting quality objectives. Top management aims to ensure that the “Global Quality Policy”:

• is applicable to the purpose of the organization including a commitment to maintaining the effectiveness of our quality management system (QMS),
• provides a framework for establishing and reviewing quality objectives, and
• is communicated and understood throughout the organization and included in the training of new employees on the QMS.

The policy serves to address and mitigate the material potential negative impact of consumer intolerance reactions or other complaints. It applies worldwide to all Beiersdorf products in the Consumer Business Segment  and covers all Beiersdorf employees. The CEO is responsible for implementing the policy.

We monitor the effectiveness of the “Global Quality Policy” based on a set of QMS Key Performance Indicators (KPIs), defined and monitored by the Quality Leadership team. The goal is to allocate adequate resources to implement the “Global Quality Policy” and to establish adequate risk mitigation measures. The policy is made available to staff via the QMS.

The “Global Quality Policy” is aligned with international standards such as “ISO 22716 GMPs for Cosmetics,” “ISO 13485 for Medical Devices,” and “ICH Q10 for Medicinal Products.” Stakeholder interests have been incorporated into the regulatory requirements referenced in the policy. Consumer expectations for product quality specifically have been considered in setting our quality objectives.

Product Safety Policy for Cosmetic Products

The “Product Safety Policy for Cosmetic Products” describes Beiersdorf’s commitment that all cosmetic products placed on the market by the company are safe for our consumers. One single global product safety standard is defined and applied consistently across all regions. A thorough state-of-the-art assessment of raw materials, formulas, packaging and product presentation for their intended use is required prior to placing products on the market. Once products are on the market, post-market surveillance is required. The policy states that safety procedures should be regularly reviewed to keep them state-of-the-art.

The policy serves to address and mitigate the potential negative impact of consumer intolerance reactions. It applies globally and to all consumers of Beiersdorf (Consumer Business Segment) products and covers all Beiersdorf staff responsible for design, production and placing of products on the market. The Vice President Global Product Stewardship is responsible for implementing the directive; the R&D Leadership Team is responsible for allocating adequate resources to implement the necessary activities and ensure adequate risk control.

The policy stipulates that all products must be approved prior to production. We monitor the policy’s effectiveness with a set of KPIs for Quality Management, thus recording any exceptions or deviations, such as non-conformities, managed according to our QMS. Consumer complaint rates are also monitored for adverse reactions, which can trigger investigation and corrective actions.

Excerpts of the policy are publicly available on our website: https://www.beiersdorf.com/research/our-way-of-working/secured-quality.

Stakeholder interests have been incorporated into the regulatory requirements that the policy references.

Raw Materials Policy

The “Raw Materials Policy” establishes that Beiersdorf develops, manufactures and markets our products in accordance with principles that aims to ensure consumers’ safety and promote well-being. The policy specifies that materials need to have passed through a multi-stage selection process involving our experts in a number of specialist functions. Specifically:

• Raw materials must meet stringent quality criteria, which we continuously update to comply with the latest regulations and international directives.
• Toxicologists thoroughly check each raw material; all available information regarding characteristics that could result in potential health risks are included in this process.
• Raw materials should be tested in vitro if required, using all relevant test procedures (e.g. cell cultures to obtain additional findings about interactions with living systems).
• Skin compatibility of raw materials in product applications is tested using volunteers.

The “Raw Materials Policy” serves as an initial measure to both address and mitigate the material potential negative impacts of consumer intolerance reactions, while contributing to the opportunity of promoting consumers’ health and well-being.

We monitor the effectiveness of this policy by carefully analyzing communication with our consumers. We identify potential improvements to our products as early as possible and incorporate these findings into product development. We analyze new findings and pointers from scientific literature, the media and interest groups for their relevance to our safety assessment. If such data leads to a reassessment of a material, the necessary measures are implemented within an appropriate time frame. The potential consequences range from immediately discontinuing use and recalling affected products to replacing materials with more suitable options over a longer period.

The policy applies globally to all consumers of Beiersdorf products and covers all Beiersdorf staff responsible for design and formulation of our products. The Vice President Sustainability is responsible for implementing the directive.

The “Raw Materials Policy” is publicly available on our website: https://www.beiersdorf.com/~/media/Beiersdorf/sustainability/archive/products/raw-materials/raw-materials-policy.pdf.

Processes for Engaging with Consumers and End-Users

As a global skin care company, Beiersdorf embraces the responsibility of contributing to the health and well-being of our consumers though our products for cosmetic, medical skin care and therapeutic applications. This means being in touch with our consumers and end-users to understand current and future needs, ensuring our products meet or exceed expectations, and promoting holistic approaches to skin care and healthy skin.

At our research center in Hamburg as well as in our global regions, we regularly speaktalk to consumers, conduct studies and surveys, observe usage habits and inquire on expectations. By staying close to our consumers, we can glean valuable information about how we can improve our products and packaging and how our products can be designed for quality, effectiveness, tactility, ease and pleasure of use.

Trained employees and external subjects take part in highly standardized testing procedures and descriptive panels in which they analyze and describe the properties of creams and lotions during and after application, focusing on characteristics like solidity, spreadability, moisture content and feeling on the skin.

We strive to keep abreast of the latest research and maintain an in-depth dialog with the scientific community, government authorities and public organizations. Our relationships with product safety and environmental interest groups are just as important. They allow us to actively participate in discussions on critical issues.

Beiersdorf scientists publish findings on skin research in peer reviewed journals, as listed on our website. We engage with experts and host events with dermatologists and other specialists to promote skin health. Beiersdorf sponsors institutions whose aims include disseminating information on dermatological science, such as the German “Information Network of Departments of Dermatology” (IVDK). Research partnerships, like our collaboration with the “German Cancer Research Center” (DKFZ), cover important and diverse fields of consumer health. We actively participate in industry associations such as “Cosmetics Europe” (CE) to promote responsible product care. Additionally, we contribute significantly to international initiatives for consumer safety, e.g. the “International Collaboration on Cosmetics Safety” (ICCS).

Product information is made available to consumers through various channels, including social media, product labels, and information leaflets. This information includes claims, product composition, usage directions, and/or warnings.

Consumers and end-users can enquire on products through the contact details provided with the products and through our brands websites. Our Sales teams also offer information regarding the beneficial and appropriate use of our products. For specific product types and applications, supporting information is made available on our website or directly to pharmacies, for example in the form of “Frequently Asked Questions” (FAQs). On the Beiersdorf websites, we share information that is specifically relevant to our consumers and related positive and negative impacts on their health and well-being. This includes, for example, our company’s approach to ingredients, and the NIVEA pages present detailed information on the ingredients used in our products.

Channels for Consumers and End-Users to Raise Concerns

Consumer and customer satisfaction is the basis of our business success. Consumers in all our markets around the world can reach us directly via various communication channels such as social media, email, and telephone hotlines. Under the responsibility of the Vice President Global Quality Management, a global network of “Consumer Interaction” managers ensures that our uniformly high quality standards for contact with consumers are maintained in the respective market. In addition, we evaluate worldwide complaints centrally, analyze their causes, and implement optimization measures. Consumers and end-users can also report any complaints or concerns via our whistleblowing system. Details are described in chapter “ESRS G1 — Business Conduct.”

Consumer complaints, including any adverse health reactions, are monitored and evaluated to identify and respond to any potential concerns in quality or product safety. This is required under relevant „Standard Operating Procedures” (SOPs) and Quality Manuals.

In the case of a quality defect or a consumer health complaint, our global network of Quality Managers and our international Complaints Management organization analyze the case and initiate necessary measures for rapid adjustment. Our critical complaints and issues management includes handling adverse reactions. The Quality Management team is responsible for evaluating complaints and managing product safety implications according to the corresponding SOP.

All consumer complaints are monitored and compared with baseline rates. Trend analyses are also performed to ensure there are no significant negative impacts on consumers. Complaint patterns with high numbers of undesirable effects or untypical types of adverse reactions immediately trigger an investigation and any necessary corrective and/or preventative actions. Any potential serious undesirable effect is evaluated on a case-by-case basis to ensure that safety measures are in place to protect consumer health.

Data and incidents are summarized in our monthly “Consumer Complaints and Post Launch Surveillance Report.” 2023 serves the baseline for our post-market surveillance data. In addition, we conduct industry data benchmarking through the IVDK. These measures to monitor complaints, incidents and related processes are directly aligned with the Beiersdorf policies directly relevant to our material impacts, risk and opportunity concerning consumers and end-users. Specifically, these include our “Global Quality Policy,” “Product Safety Policy for Cosmetic Products” and “Raw Materials Policy.”

Consumer and end-user issues can be escalated and trigger further actions by our Quality Management team in accordance with our “Crisis Management Manual.” The Crisis Management team directly informs our CEO and Executive Board of any critical issues. Any legal reporting obligations in the event of serious incidents are always taken into account and, if necessary, implemented in a timely manner.

Actions Related to Consumers and End-Users

A range of procedures address and mitigate risks and negative impacts while promoting positive outcomes for our consumers and end-users. The procedures described above are part of a structured decision-making process that ensures that all identified negative impacts are systematically assessed and addressed with suitable measures.

In addition to the actions described below that promote the safety and tolerability of our products, Beiersdorf takes actions that are primarily intended to make a positive contribution to the health and well-being of consumers. Our brands NIVEA, Eucerin, Hansaplast, Elastoplast and Curitas implement local projects that are tailored to the needs and concerns of their consumers. These “Brand Social Missions” aim to strengthen individual health, enable better social connections and promote fairer societies.

Corrective actions for existing products

Description: For existing products, corrective actions for identified negative impacts or material potential negative impacts on consumer experiences and intolerance reactions are evaluated and managed through a corrective action and prevention plan. This plan follows the process for managing non-conformities, such as described in our SOP for “Non-conformity Management.” Managing product recalls, if necessary, are described in our SOP “Product Recall from Consumers.” Corresponding change management and risk mitigation procedures are documented according to our SOPs for “Change Management” and Quality Manuals.

Scope: Global

Time horizon: Ongoing

Expected outcome: Any identified or potential negative impacts, such as product intolerance or dissatisfaction, are promptly addressed and mitigated through corrective actions, ensuring product safety, quality, and satisfaction. If necessary, affected products may be recalled, and improvements implemented to prevent similar issues in the future.

Risk assessment and innovation management

Description: Risk assessment and risk management processes, including the pursuit of relevant opportunities, are embedded in all projects as described in our “Integrated Innovation Management” process. As part of this process, new products and technologies are developed to treat injured skin, further promote healthy skin and advance skin care.

Scope: Global

Time horizon: Ongoing

Expected outcome: The expected outcome of this action is the development of innovative products and technologies that enhance skin health and advance skin care, ensuring consumers benefit from safer, more effective, and forward-thinking solutions tailored to their needs.

Safety assessments

Description: In the interests of consumer protection, our safety assessors work closely with relevant departments such as R&D and Product and Packaging Development. In addition to experience and expertise, evaluating the safety of cosmetic and medical products requires, above all, scientific exchange and knowledge of new findings regarding the compatibility and safety of raw materials, formulas, and packaging materials, as well as compliance with legal and regulatory standards, with consideration to state-of-the-art. Accordingly, our safety assessors attend international conferences, participate in working groups and expert teams, and also take part in specialist international training courses.

Scope: Global

Time horizon: Ongoing

Expected outcome: The goal of this professional exchange and training is to ensure that we continue to operate appropriately and responsibly in the future. It is also important to us that we hold our external service providers and suppliers, such as raw material manufacturers, accountable. They must certify compliance with statutory requirements as well as with Beiersdorf-specific requirements that go beyond the legally required scope.

Targets Related to Consumers and End-Users

Consumer health and safety targets and benchmarks are managed internally as they are based on sensitive information such as market data and formulation performance. Without comparable data in standardized reporting formats, such as deviations or complaint rates, external publication is of little relevance. Beiersdorf therefore does not publish any specific targets in this area, but reports on all cases of non-compliance.

Our commitment to consumer health and safety is reflected in the implementation of strict processes and standards. Beiersdorf monitors the effectiveness of the measures through three central processes:

1. The technical approval of all raw materials and end products.
2. Compliance with regulatory requirements with the goal of full conformity.
3. Ensuring excellent skin compatibility through comprehensive testing and market monitoring.

Product safety is ensured through compliance with international regulations such as the “EU Cosmetics Regulation 1223/2009,” and “EU Medical Device Regulation 2017/745” as well as adherence to internal policies such as the “Global Quality Policy” and the “Product Safety Policy.” Product safety is further guaranteed through strict monitoring of raw materials, formulations, and manufacturing processes, which adhere to internationally recognized standards such as “ISO 22716 for cosmetics” and “ISO 13485 for medical devices.” By firmly embedding product safety into its processes, Beiersdorf achieves its objectives and systematically develops its measures.

At the same time, these approaches play a crucial role in Beiersdorf’s product innovations and market success. They are closely linked to the goals and measures of our R&D department. From 2025 we are planning more transparency, for example through the “EcoBeautyScore” initiative. This is intended to help consumers make informed and sustainable decisions when selecting cosmetic products.

¹ No impacts, opportunities and risks were identified for tesa in this area, therefore the chapter “ESRS S4 – Consumers and End-users” refers exclusively to the Consumer Business Segment.