“The father of modern marketing” Philip Kotler once said that a great brand must be full of goodwill, and its ultimate goal is to create both business value and social value.
Because of this, an increasing number of beauty companies consider ESG (Environmental, Social, Governance) as an important issue for corporate development. On October 19, 2024, the China Fragrance and Cosmetics Industry Sustainable Development (ESG) Forum was held in Nanjing. During the forum, Secretary-General Mu Min of the China Association of Fragrance Flavor and Cosmetic Industries (referred to as CAFFCI) released the “Guidelines for Sustainable Development of Fragrance, Flavor, and Cosmetic Companies (Environmental, Social, Governance)” group standard (referred to as the ESG group standard).
According to CHAILEEDO, CAFFCI has convened 40 companies to establish a Sustainable Development ESG Special Committee, leading the drafting of the industry’s first ESG group standard, of which Nox Bellcow is one of the main editing units. This means that Nox Bellcow has not only demonstrated its efforts in the three dimensions of ESG—Environmental, Social, and Governance, but has also set a new reference point for the entire industry.
Nox Bellcow leads the drafting of the industry’s first ESG group standard.
According to Wind data, in 2024, a total of 2,210 A-share listed companies disclosed their 2023 sustainability reports, a 20% increase compared to the previous year and a 51% increase compared to two years ago. With the gradual popularization of sustainable consumption concepts in China, the ESG concept is becoming an important standard for measuring a company’s sustainable development capabilities.
At the same time, the influence of ESG has extended to the beauty industry. This year, cosmetics companies such as Shanghai Jahwa, Proya, BTN, YATSEN, and others have already published their 2023 ESG reports. Public information shows that in May of this year, Fujian Green Pine Co., Ltd., the parent company of Nox Bellcow, one of the world’s four largest cosmetics ODM companies, also released its first ESG report since going public.
The “sustainable” era has arrived. How should beauty companies “seize the opportunity”?
At the ESG forum that day, Nox Bellcow provided its own answer. CHAILEEDO noted that the companies participating in the roundtable discussion at the forum included CHANDO, Freda, Nox Bellcow, Forest Cabin, and Bloomage Biotech, with Nox Bellcow being the only ODM company.
During the forum, Fan Zhanhua, Chairman of Fujian Green Pine Co., Ltd. and CEO of Nox Bellcow Cosmetics Co., Ltd., sincerely stated, “Nox Bellcow has 20% export business, and we have been practicing foreign ESG standards for a long time. Now, promoting the establishment of the ESG group standard domestically is a natural progression. The Chinese cosmetics industry did not lack the ESG concept before; it was just not specific or systematic enough. With the introduction of the group standard, enterprises can be provided with standardized guidelines and directions, guiding them to actively undertake environmental protection and social responsibility while enhancing the overall governance level of the company.”
Of note, on September 2 of this year, the CAFFCI Sustainable Development (ESG) Professional Committee held a group standard expert demonstration meeting in Beijing. After multiple expert demonstrations, China’s fragrance and cosmetics industry’s first ESG group standard was approved.
One month later, during the forum hosted by CAFFCI Secretary-General Mu Min, the ESG group standard was interpreted. He stated, “In order to better adapt to international development, meet market demands, reduce operational risks, the fragrance and cosmetics industry needs a comprehensive, targeted, and operationally strong ESG standard. The group standard not only helps companies build ESG competitiveness but also promotes differentiation in competition among companies in China’s fragrance and cosmetics industry.”
During his public speech, CAFFCI Chairman Yan Jiangying also expressed, “The formulation of the group standard marks a solid step for the fragrance and cosmetics industry in promoting green transformation and sustainable development.”
Be a responsible supply chain enterprise.
During the forum, the “2024 China Fragrance and Cosmetics Industry Sustainable Development (ESG Report)” and the “2024 China Flavor and Fragrance Cosmetics Industry Sustainable Development (ESG) Practice Cases” (referred to as the “Case Collection” below) were officially released.
The Case Collection includes 28 enterprises with distinctive ESG responsibilities. Among them, Nox Bellcow, selected for the Case Collection, provides “textbook-level” solutions from various aspects such as green research and development, green production, product production and transportation stages, waste emissions, fully demonstrating Nox Bellcow’s ESG responsibility competitiveness in solving social, environmental, and economic issues with professional advantages, creating differentiation advantages for the company.
Public information shows that Nox Bellcow was founded in 2004 and has been focusing on the design, research and development, and manufacturing of products such as masks, skincare products, and wet wipes. Its products are exported to over 40 countries and regions worldwide, with major clients including P&G, Unilever, Shiseido, CHANDO, Shanghai Jahwa, YATSEN, and more than 200 other well-known domestic and international enterprises/brands.
It is undeniable that capability often intertwines with responsibility. Nox Bellcow has now developed into one of the world’s top four cosmetics ODM enterprises, the world’s largest mask ODM, and China’s largest domestic cosmetics ODM enterprise. How to be a responsible supply chain enterprise, how to be a trusted partner for beauty brands, has become the focus of the entire industry and a “must-answer question” for Nox Bellcow.
At the R&D level, Nox Bellcow was the first to introduce the concept of pure beauty cosmetics into the Chinese cosmetics market, establishing a pure beauty cosmetics formula development team and developing a series of new products that meet pure beauty cosmetics standards, driving development through scientific research innovation.
For example, in 2023, after 5 years of research and development, Nox Bellcow successfully applied electrospinning technology in the cosmetics field and launched a core ingredient, recombined collagen electrospun instant essence patch, filling the gap in the cosmetics field for “electrospinning technology.”
At the 7th China International Cosmetics Summit held in October 2023, Nox Bellcow released the “Group Standard for Electrospun Fiber Membranes for Cosmetics,” drafted under its leadership. This standard specifies detailed hygiene chemical indicators, testing rules, etc., providing a series of scientific basis for standardized production and formulation for enterprises.
As a supply chain enterprise that started with masks, Nox Bellcow also actively promotes the reduction of mask lining fabrics. According to CHAILEEDO intelligence data, in 2023, the mask market accounted for 8.14% of the total cosmetics market size, with a compound annual growth rate of 6.7% from 2018 to 2023. If this growth rate can be maintained, the mask market size is expected to exceed 75 billion yuan in 2025.
As the mask segment gradually grows into a large competitive market, the resource consumption it generates is immeasurable.
It has been summarized by industry insiders that the competition in the mask market is essentially a competition between supply chains. However, in the current era where the concept of sustainable development is increasingly prevalent, the competition in the mask market is also a competition for enterprises to meet modern consumers’ demands for environmental protection.
In 2023, Nox Bellcow gradually optimized the packaging structure of masks, treating the original one lining fabric paired with one non-woven fabric structure to reduce the lining fabric, making the mask packaging more environmentally friendly and lightweight, significantly reducing the use of pearl film and spunbond fabrics. Public data shows that after this action, Nox Bellcow’s purchase weight of pearl film in 2023 decreased by 36.7% compared to 2022, reducing usage by approximately 9.8 tons; the purchase weight of spunbond fabric in 2023 decreased by 35.2% year-on-year, reducing usage by approximately 95.8 tons.
In the increasingly competitive cosmetics industry, for listed companies with mature development and strong capabilities, the development path of reckless expansion is a thing of the past. Focusing on environmental, social, and governance performance rather than financial performance is becoming the evaluation standard that aligns with the current era. Committing to ESG development may become the most crucial breakthrough for companies seeking differentiation in the future.
First release of ESG report, accelerating the construction of a green supply chain
The practice of green and sustainable concepts by Nox Bellcow is inseparable from the strategic guidance provided by its parent company, Fujian Green Pine Co., Ltd.
In May of this year, Fujian Green Pine Co., Ltd. released the “2023 Sustainable Development and Environmental, Social, and Corporate Governance (ESG) Report” (hereinafter referred to as the “Report”). It is worth noting that Fujian Green Pine Co., Ltd. used to publish an annual “Social Responsibility Report,” and this is the first time they have released an ESG report covering the dimensions of environment, society, and corporate governance.
CHAILEEDO noted that Fujian Green Pine Co., Ltd., established in 2001, envisions itself as “becoming a world-class beauty and health enterprise.” In recent years, ESG reports by listed companies have gradually become an important reference for demonstrating environmental responsibility and sustainable development capabilities. The first release of the “Report” by Fujian Green Pine Co., Ltd. signifies not only confidence in their achievements but also reflects the company’s determination to accelerate the construction of a green supply chain.
The “Report” indicates that in 2023, Fujian Green Pine Co., Ltd. continued to drive innovation through research and development, with an R&D investment of 69.4036 million yuan, accounting for 3.52% of its operating income. During the reporting period, the company held 134 patents, including 36 invention patents, 82 utility model patents, and 16 design patents.
In the sustainable environmental domain, Nox Bellcow under Fujian Green Pine Co., Ltd. reduced its total solid waste by 446 tons compared to 2022, a decrease of 17.5%. Additionally, the industrial wastewater standard discharge rate, waste disposal standard discharge rate, domestic sewage standard discharge rate, and solid waste compliant transfer rate were all at 100%.
Undoubtedly, the ESG concept provides important guidance for companies to fulfill environmental responsibilities and place greater emphasis on energy utilization and sales volumes. However, fulfilling social responsibilities is also an integral part of ESG. The mass appeal of cosmetics companies leads them to actively engage in social issues, especially concerning the care for vulnerable groups and the protection of the ecological environment.
For instance, Fujian Green Pine Co., Ltd. is concerned and supportive of educational initiatives and student development. For example, the company actively participates in charity activities organized by the China Fragrance and Cosmetics Association in Shaanxi, Gansu, and other regions, such as donating school bags and uniforms. Since 2017, they have donated over tens of thousands of yuan, making a positive contribution to the improvement of local education.
At the ESG forum, Wang Zhuo, the Director of the ESG Special Committee of the China Fragrance and Cosmetics Association, concluded the event with a statement, “ESG is about being human, while business is about doing things; being human while doing things is the right path.”
In summary, the ESG principles practiced by Fujian Green Pine Co., Ltd. cover various areas such as scientific research and development, quality innovation, green development, and social welfare, unleashing a strong internal driving force for the company to move towards a path of high-quality development.
