Beauty giant Sephora sees opportunities to improve sustainability.
The global beauty retailer Sephora, a subsidiary of LVMH, is often considered a leader in the $460 billion beauty industry due to their scale and sourcing of up-and-coming beauty brands . Part of that leadership has entailed responding to environmentalists’ concerns that beauty products and packaging contribute to climate change, for good reason: it’s estimated that personal care and beauty products currently contribute to a third of all landfill waste .
While Sephora and other beauty companies have addressed concerns about waste by transitioning towards using sustainable materials in packaging, offering refillable packaging, or removing packaging entirely from products, less visible sources of waste and emissions remain in product supply chains . In the cosmetics and personal care sector, only 5% of emissions are concentrated in companies’ direct operations, while 95% of emissions stem from within the supply chain . The imbalance between product composition and product production will continue to be relevant as consumers demand more sustainable products, therefore, companies like Sephora must be prepared to work with suppliers to ensure a more comprehensive approach to sustainability, from R&D through product disposal . Beyond their own supply chain, Sephora’s partnerships with hundreds of other brands significantly expand their reach and their ability to mobilize the entire industry towards sustainable practices.
Sephora has taken steps to reduce their adverse impact on the environment.
Sephora has successfully executed several initiatives related to sustainability, and their ongoing priorities reflect four of LVMH’s five categories of sustainability concerns:
- Saving energy resources and combating climate change
- Protecting ecosystems and natural resources
- Waste recovery
- Reduction in impact of production and transformation of raw materials, specifically through eco-design 
For example, the retailer approached the development of their Sephora Collection line with the goal of monitoring the harmful chemicals typically included in cosmetic formulations. In doing so, they voluntarily developed a list of substances banned from products developed in-house due to either their negative environmental impact or toxicity . Together with LVMH, Sephora also participates in the CEDRE program, which “is dedicated to the sorting, recycling, and recovery of all waste generated from the manufacture, packaging, distribution and sale of cosmetic products” . The program results in a recycling rate of 88%, and it includes the economic upside of reselling materials to specialist recyclers .
In addition to their focus on sustainable products, Sephora is actively taking steps to reduce emissions across their own supply chain and network of stores. After scrutinizing their stores and offices in 2014, Sephora prepared a detailed carbon report, which identified the 10 most relevant measures to implement to reduce its overall carbon impact . As a result, the retailer implemented electric transportation, LED lighting, and HVAC solutions to reduce energy use and emissions across all of its 2,300 stores . The focus on reducing emissions extends to Collection supply chain: for instance, by eliminating the external packaging and sourcing different materials for a new face mask, Sephora is avoiding emitting 51 metric tons of CO2 into the atmosphere .
In the long term, Sephora plans to expand on their existing sustainability initiatives through a series of partnerships. They recently launched a startup accelerator for female-led beauty businesses innovating in technology and sustainability, which will support more than 50 businesses by 2020. Sephora also plans to evaluate the sustainability of their Collection supply chain by auditing their high-risk suppliers .
Can Sephora push the entire industry toward a sustainable future?
While Sephora leads the beauty industry in several ways, they have failed to consider the full scope of their ability to push their partners towards sustainability. They continue to promote partners that do not comply with their own sustainability standards, and they do not have visibility into the supply chains of the brands they work with. As a market leader, Sephora is obligated to consider the supply chains of their partners as an extension of their own to ensure that their climate change reduction objectives are met.
To achieve this objective, Sephora should look to their South Korean counterpart, the Amorepacific Group, for best practices. The Amorepacific Group requires all of its partner organizations to comply with its sustainability guidelines and participate in sustainability assessments, and if the partner is not adequate or would like to pursue additional training, they provide trainings, consulting, and mentoring .
Sephora should consider incentivizing partners to comply with their expectations by placing a sustainability premium on wholesale prices and featuring green products prominently in stores and advertisements. In extreme cases, Sephora may want to discontinue partnerships that do not support their sustainable mission. As climate change worsens and consumers become increasingly aware of the impact of their purchases, Sephora must shift their operations towards a comprehensive focus on sustainability.
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