The cosmetics industry is at a turning point. Natural ingredients and packaging that once set brands apart are now exposing companies to operational, financial and reputational risks. At the same time, they represent the greatest opportunity to secure supply, differentiate and build long-term resilience.

Cosmetics are more dependent on nature than ever. Botanical oils, plant extracts and pigments have moved into the mainstream, with EU imports of vegetable and essential oils reaching 470,000 tons (€2.2B) in 2023. Yet this reliance is fragile. Droughts, shifting climate zones, soil degradation and pollinator decline are making supply more volatile and costly, while the industry’s own sourcing practices continue to drive deforestation, water stress and biodiversity loss. What was once a marketing advantage – being “derived from nature” – has become a structural vulnerability.

Regulation is raising the stakes. Frameworks such as CSRD, ESRS, SBTN and TNFD are demanding disclosure across all major drivers of nature loss, while industry initiatives like EcoBeautyScore are making environmental performance visible on shelves. Packaging, too, has become a focal point – a symbol of both consumer scrutiny and unintended impact shifts as companies move toward bio-based and circular materials. Quantis and BCG analysis shows nature risks alone could put 7–15% of operating profit at risk.

To thrive, cosmetics companies must regenerate ecosystems, adopt circular design and embed nature into strategy – ensuring both resilience and competitiveness.