Cosmetics companies are preparing for the end of their products’ lives

When you’ve drained a plastic cylinder of the last drops of serum, what becomes of the bottle?

The answer to this question lies in extended producer responsibility laws, which make manufacturers responsible for the recyclability of the goods they produce. Container deposit laws are a good example of this: By monetarily incentivizing consumers to return empty bottles and cans, beverage companies have had to pay for the recycling of their products for over 50 years.

Over time, EPR laws and regulations have become much more stringent and broad, like California’s Plastic Pollution Prevention and Packaging Producer Responsibility Act and the European Union’s Packaging and Packaging Waste Regulation. Both laws target single-use plastic packaging, which is the bedrock of the cosmetics and beauty industry, and require that it be entirely recyclable in the coming years.

But even though these laws aim to revolutionize how plastic packaging is made and recycled, unknowns remain. Though the EU and California laws have been on the books for a couple of years, the regulations don’t start to take effect until later this year and 2028, respectively. In the meantime, though, manufacturers are still waiting for specific guidelines on each law, and companies that annually produce millions or billions of plastic-packaged items are preparing to comply with laws that aren’t fully formed.

Continued efforts

Though mandatory, EPR compliance isn’t the first sustainability effort for the cosmetics industry. For L’Oréal, the largest beauty company in the world, adhering to EPR regulations plays into the company’s ethos that investing in sustainability has “long-term value,” Chief Sustainability Officer Marissa McGowan told Morning Brew.

“We call it dual excellence,” McGowan said of the company’s packaging initiatives. “There’s a business benefit and either an environmental or social benefit—and hopefully, in some cases, both—to these efforts.”

And because L’Oréal already focuses on sustainable packaging, McGowan said EPR regulations are a “tailwind” to the work the company already does.

“Because we have had voluntary activity for so long, we’re going to be better positioned to manage these incoming regulations,” she said.

Even still, L’Oréal is closely watching how EPR laws materialize. McGowan said she categorizes EPR regulations in two ways: “typical” EPR, in which “there are rewards for good design; there are penalties for bad design,” and what she calls “EPR+.” She cited California and the EU’s regulations as having these additional requirements, including requiring producers to use less plastic packaging in general.

The company also analyzes its products via a “life cycle assessment” and calculates potential fees using an EPR calculator. These tools helped L’Oréal discover that it could save a million dollars in EPR fees annually by removing metal design decals from one of the Garnier haircare line’s shampoos once California’s law takes effect.

Strategic partnerships

McGowan said that beyond L’Oréal’s in-house work on sustainable packaging, the company is exploring innovative ways to expand its recycling ecosystem. Last year, it debuted fragrance fountains in select Dillard’s department stores to encourage customers to bring in their empty perfume bottles and refill them, rather than purchasing a new bottle. And in conjunction with Closed Loop Partners, L’Oréal is working with Kraft Heinz, Target, and P&G to retrofit recycling facilities to process small-format rigid plastics, like those used in makeup and serum packaging.

“What we’re in the phase of doing is aggregating all the costs,” McGowan said. “With the hope that we can go to some of the states that are more advanced on EPR and say, ‘Look, we could do this.’ This is a format that we’d actually take in and manage. Yes, we have to design it to be recycled on our end, but include this in the system.’”

Part of the Estée Lauder Companies’ sustainability and EPR work happens via partnerships, too. The world’s fourth largest beauty company works with Strategic Materials, a glass recycler, to test that its smallest glass-packaged products can actually be processed. The insights gleaned from that partnership, VP of Sustainable Packaging and Engineering Rob DiPalma told Morning Brew, helped Estée Lauder Companies draft the company’s EPR compliance algorithm, which has been in use for 20 years.

However, after factoring in plastic EPR laws, DiPalma said Estée Lauder Companies is and will be using more glass packaging.

“We have a dos and don’ts list for our developers and our creative team. And we created this recyclability assessment tool,” DiPalma said. “We give them as much information and tools to work with up front, so that they’re making the right decisions based on what we know today, and then we keep evolving it as [more information about the laws] comes out.”

A balancing act

And waiting for the specifics of EPR laws, while taking into account multiple rigorous regulations at once, is difficult.

“If we only focus on [the EU law,] then we’re not ready for California two years after it. So we’re looking at it globally and saying, what’s the right way forward?” DiPalma said. “Every time [EPR laws] raise that bar, it’s a huge shift for everybody to accommodate…It would be so much better if they can harmonize somehow.”

But EPR has also been a “growth driver” for Estée Lauder Companies and has unlocked creativity when it comes to maintaining brand identity, DiPalma said. Estée Lauder herself pioneered cosmetic samples and small gifts with each purchase, and those elements are integral to the company—but the samples’ packaging is hard to recycle.

“We created—it took about two and a half years to do—a globally recyclable paper packet and sachet,” DiPalma said. “We saved our heritage that could have been at risk.”

Financial realities

Despite all the work companies are doing to ensure the recyclability of their products, it’s unclear how much consumers are going to have to pay for those efforts. Sheila Millar, a partner at Keller and Heckman who leads the firm’s consumer protection regulatory practices, told Morning Brew that prices on EPR-compliant goods will go up.

“The policy choice has been made by the states, but I think it’s disingenuous to say ‘producer pays and taxpayers won’t have this burden,’” Millar said. “Somebody’s going to have to pay for it, because the larger economic environment for recycling is influenced by many other factors that the government can’t control and a lot of businesses can’t control.”

When Morning Brew asked about price increases, Estée Lauder Companies spokesperson Jacqueline Martinez said in a statement that “costs can vary by material and category,” but the company expects sustainable packaging prices “to become more accessible over time.” L’Oréal declined to share further information on the topic.

Millar said she’s currently advising clients wrestling with pricing as a result of EPR compliance, especially as companies wait for necessary regulatory details to be publicized.

“EPR is very well intentioned, [with] lots of potential benefits: a lot of support from an environmental standpoint to help achieve goals of circularity and reducing waste and maximizing the value of material that otherwise would be thrown away,” Millar said. “There are just a lot of things that we don’t quite know yet.”