The beauty industry faces mounting pressure to innovate and tackle climate change. But transforming the way we do business is a daunting undertaking by any measure. While the sustainability movement is a good start, it’s not enough to make a meaningful impact, according to environmental expert Esha Chhabra, whose book Working to Restore: Harnessing the Power of Regenerative Business to Heal the World (Beacon Press, 2023, now available in paperback) profiles business leaders who are pioneering a new way of running companies to benefit people and the planet. “They go beyond sustainability, which is just about materials and supply chains. Regenerative business is about the impact of every aspect of your company. It’s not just the materials that are sourced, but it’s where you manufacture and who you employ,” Chhabra says.

While sustainability is commonly associated with recycling and renewable energy, regeneration focuses on actively restoring resources, supporting local communities, and enhancing the well-being of ecosystems. Chhabra points out that ‘regenerate’ means to bring new life into something, which is different from sustainability, or sustaining the status quo. In a regenerative model, materials never become waste in the first place. It’s a closed-loop system in which materials are continually kept in circulation – they’re either repurposed, reintegrated, or composted. Our current system is a linear one. We take resources from the earth, create products from them, and eventually throw them out as waste. Here, Chhabra shares insights about how to adopt a regenerative business model in the beauty industry.

Tip 1: Rethink Waste Streams

The beauty industry produces at least 120 billion pieces of packaging each year, according to the British Beauty Council. And even though companies are making an attempt to recycle plastic, the Organization for Economic Cooperation and Development reports that only 9% of the world’s plastic is successfully recycled. “Waste is a big, big problem in the beauty and personal care area. As a company, if you’re not paying attention to that, I don’t know how you can be regenerative. Products are only used for a month, a week, even single use in certain cases. If you’re not thinking about your waste streams and how you can introduce some element of circularity to it, that’s a red flag,” says Chhabra. Fortunately, we’re starting to see regulations in this area, another incentive for brands and retailers to start implementing changes. “California has legislation that’s focused on getting plastic out of the waste stream and shifting to compostability,” says Chhabra.

One thing companies can do is rethink packaging design altogether. Business leaders can encourage innovation throughout companies to help design products that cut out waste and pollution starting with the ideation phase. Most products use more material than necessary to protect or contain the product. “The challenge is that packaging solutions right now are not 100% perfect, but you should at least be working towards that. We can all acknowledge that and be like, ‘OK, this is not the end result. We’ll probably need to evolve in the next few years, and there will be different iterations of packaging,’” she adds.

Refillable packaging is another waste-reduction strategy that is picking up momentum. You can extend the useful life of packaging by offering in-store or at-home refills, moving away from a linear “take, make, toss” economy. But not all refills are created equal, Chhabra points out. “Some refills are not as sustainable as we believe. For example, bottle-in-bottle refills that involve pod or cartridge inserts in a primary component package don’t necessarily minimize environmental impact, waste, and overall carbon emissions. A more effective strategy is refill pouches, which leads to an automatic reduction in material used.”

Tip 2: Educate Consumers

Training shoppers is a big factor in converting consumers to new sustainable products. While 50% of consumers say they want to buy sustainable products that reflect their values, only 25% actually do, according to a recent Accenture report. The gap between purchase intent and action is due to the perception that sustainable products are expensive, inconvenient or less effective. In reality, consumers may not know enough about a new format or delivery system to see the benefits, which leads to a bad user experience. Make sustainable choices more visible, enjoyable, and convenient. “It’s a trial-and-error process for finding new products that work. But products like solid shampoo are really transformative in terms of waste,” adds Chhabra. If you’re launching a solid shampoo bar, consumers need to understand how to use it correctly. They’re used to squirting liquid from a bottle, so how much solid shampoo do you need? How do you rinse hair to avoid buildup of these concentrated ingredients? And how can you prevent the bar from getting gooey between uses? Help your audience see the benefits, beyond the values.

Shoppers also want brands and retailers to be honest about their impact, instead of announcing ambitious goals. “I appreciate companies that are transparent and say, ‘This is what we’ve accomplished, and here’s what we’re working on,’ instead of making claims like ‘I want to be net zero by 2030.’ That’s really hard to back with data. We’ve seen companies set benchmarks and then push them back five years when they don’t meet them,” says Chhabra.

Tip 3: Use Your Bargaining Power 

Chhabra urges companies to conduct due diligence and product life-cycle analysis to find out what materials suppliers use and the type of energy the manufacturing plant runs on. “If you are a larger brand, you actually are at an advantage, because you can influence your manufacturer to consider another source of energy for production. A smaller brand doesn’t really have the purchasing power to do that. But if you’re regularly buying hundreds of thousands of units, a manufacturer is likely to listen and be interested,” Chhabra says. You can make a difference at every stage of the product life cycle, from ingredient sourcing and energy sources to logistics. “These topics get nitty gritty into agriculture, which is an unsexy topic, but it’s important to look at your business holistically,” Chhabra says. Regenerative agriculture focuses on utilizing the farm and its ecosystem as a whole. “There are now beauty and personal care companies building regenerative supply chains in agriculture. Davines just opened a center in Italy focused on regenerative agriculture. They’re going to use some of those ingredients in their shampoos and products,” Chhabra adds, referring to the European Regenerative Organic Center, a partnership between Davines and the Rodale Institute in Parma, Italy. The center focuses on growing ingredients, conducting research and training farmers.

Transportation and logistics are also key contributors to the beauty industry’s overall greenhouse gas emissions. Brands can reduce their footprint by manufacturing products closer to where they’ll be used. Shortening supply chains minimizes the distance that products need to be transported. You can also reduce emissions by choosing more efficient shipping methods, like train and ocean freight. “Companies can ship everything by sea, so there’s no air transportation happening,” notes Chhabra.

Tip 4: Invest in Your Social Capital

Workplace culture is another factor to consider for companies looking to adopt a regenerative mindset. Over 85% of employees prefer to support or work for companies that align with their values, according to a recent PwC survey on Environmental, Social, and Governance issues. Designing a human-centered organization means prioritizing employees as much as business performance. “It’s a real challenge to the conventional thinking that business is primarily a profit-seeking enterprise,” Chhabra says, noting that the rise of the B Corporation is bringing attention to social impact and virtue-driven leadership. It’s increasingly critical for business leaders to be purposeful in building social connections, fostering collaboration, and driving innovation. “It’s who you’re employing and how you’re working with them that matters. I was talking to an executive at a haircare brand, and she said it was so great to work at a company that cares about its employees. She said, ‘It’s so great that I can work at a company with a healthy workplace culture and feel good about my job.’ It regenerates communities.”

There’s also a cost savings benefit to investing in social capital. “If you get higher employee retention, if you get more engaged employees, you get higher productivity. There are now studies showing data on this. It’s easier to make these decisions when you have a leadership team that believes in it. Don’t think that because you’re not a large player you’re not going to have an impact,” says Chhabra, who describes Dr. Bronner’s as a pioneer in this space. “They think about these things, from the source of the ingredients they use to the packaging to the workplace culture. The head of their supply chain, Gero Leson, wrote a great guide for companies that want to learn more about it,” Chhabra says of Honor Thy Label: Dr. Bronner’s Unconventional Journey to a Clean, Green, and Ethical Supply Chain (Portfolio, 2021).

Becoming a regenerative business doesn’t happen overnight. “If you focus on one or two products and really home in on those, it’s more manageable. Many of larger companies are beginning to experiment with smaller brands in their portfolio,” Chhabra notes, adding that “some things that are a little bit harder and trickier for this industry to figure out, and that goes back to spending a little more time in R&D.” But focusing on a regenerative business model has the potential to create long-term value and create opportunities for growth in businesses of any size.