Revenge of the Chemistry Nerds: P&G Teams With Health Watchdog

(Bloomberg) -- In August 2015, Procter & Gamble Co. held a focus group for its Herbal Essences shampoo—a brand launched in 1971 and inspired by wildflowers, herbs and fresh mountain water. But during the sessions, something much less peaceful came up: repeated references to the industry’s long-time tormentor, the Environmental Working Group.

The Washington-based non-profit, known as EWG, has a Skin Deep Database that ranks the toxicity of everyday items based on studies that show links to hormone disruption or illnesses like cancer. The cosmetics industry and bloggers have often decried it as producing “pseudoscience” and “fear mongering.” But at P&G’s focus group, women were singing its praises.

“It really opened our eyes,” recalls P&G’s Senior Scientist Rachel Zipperian, who at the time was doing product research for the Herbal Essences brand. “That was when we took a stand.” P&G, the 181-year-old maker of iconic brands like Ivory and Pantene, opted to partner with EWG and overhaul the brand instead of simply sticking to its own safety testing and research. The result: Two new Herbal Essences shampoos, which go on sale in January.

They represent the first “EWG-verified” products from a large company, and highlight how the non-profit is stepping in to compensate for the Food and Drug Administration’s light touch when it comes to regulating the cosmetics industry. 

While new legislation in 2019 may strengthen regulation of the cosmetics industry, the fact that the world's largest producer of consumer goods has chosen to partner with an industry watchdog shows how companies are trying to get ahead of changing laws and shifting consumer preferences.

In 2004, soil scientist and EWG co-founder Ken Cook initially scoffed when his group was urged to expand its focus to scrutinizing the substances in makeup. At the time, EWG was monitoring pesticide use in agriculture and toxins in cleaning products. 

“Environmentalists like me had been more concerned about bad air days than bad hair days,” Cook recalls. But fellow scientists convinced him it was a worthy cause, and Skin Deep was born—and quickly grew. Its online database has information about 69,359 products, and its “Healthy Living App” has been downloaded 1.3 million times. 

EWG’s move into cosmetics monitoring caught the attention of powerful interests. In 2010, the American Council on Science and Health, an industry group funded by corporations, said concerns about substances such as bisphenol-A, phthalates and cosmetics were among the “top ten unfounded health scares,” pointing the finger at EWG. 

But EWG's relationship with companies usually improves as information starts changing hands, Cook says.

“It starts with our scientists going to meet their scientists. And they find out: A. We have PhDs that know their stuff, and B. They’re not crazy,” Cook says.

Today, around a dozen emails arrive daily in an EWG inbox especially dedicated to company correspondence, says Nneka Leiba, leader of the group’s Healthy Living Science team.

“Companies have told us that if they don’t score well, it will affect their bottom line,” she says.

EWG's growing clout has coincided with consumers’ increasing appetite for products perceived as healthier and nature-based. According to NPD Group Inc., sales of natural skincare brands have grown 27 percent year-to-date. Meanwhile, mobile apps that let consumers do on-the-fly reviews of makeup ingredients been proliferating. 

By 2013, that shift was vexing companies. States and retailers were placing their own restrictions on personal care and consumer confidence was declining, says Scott Faber, EWG's vice president of government affairs.

That was the year EWG and P&G first cemented the relationship that would lead to their partnership on the shampoos. Both parties sat down, along with Johnson & Johnson and Unilever to explore legislation that would require companies to ensure personal-care products were safe. The conversations eventually led to a bipartisan bill called the Personal Care Products Safety Act, which supporters believe has a good chance of passing next year.

“There’s increasing evidence that long-term, daily exposure to chemicals is harming public health,” Senator Dianne Feinstein says, calling legislation "long overdue."

In 2017, a lawsuit showed how the lack of clear standards can give rise to liability. It accused P&G of making false and misleading claims about the "natural" properties of some Herbal Essence products. The company says it denies the allegations and stands by the quality of all its Herbal Essences products. Meanwhile, it proceeded to work with EWG on the two “verified” shampoos.

Lengthy Process

The process was arduous—taking about two years, 10 iterations and around 30 P&G staff. Sulfates, which help lather, were left out. So were two ingredients that scored low in Skin Deep’s ratings for past Herbal Essences shampoos: fragrance, and a preservative called methylisothiazolinone. Information flowed both ways during the overhaul process, with EWG also learning from P&G’s science. One ingredient, cocamidopropyl betaine, remained in the product, but got an improved EWG score after the group learned about P&G’s quality control and use of the substance.

While P&G is the first large company to make an EWG-“verified” product, around 1,356 such items already exist, showing how smaller rivals are already leading the charge. W3LL People, an Austin, Texas-based company that makes around 60 of them, says EWG fills a role that was “completely lacking,” and has become like a “de facto or ad hoc regulator.”

The fact that the Herbal Essences team at P&G went to the trouble to meet EWG's criteria “speaks volumes about today's consumer-driven interest in clean beauty,” as well as P&G’s commitment to its customers, Cook says. "I can think of faster and easier ways for a huge company like P&G to refresh an iconic brand."

The free-market solution to a regulatory gap has a side benefit for the non-profit, which gets most of its funding from grants and individuals. With verified products, it offers companies a choice between paying a percentage of sales, or a flat fee. The money it receives, which EWG says represents only 0.2 percent of its operating budget, goes to back into helping it continue its research.

To contact the editor responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan RoederRobin Ajello

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