ROLE OF LEGAL ENVIRONMENT IN GROWTH OF GREEN

BUSINESS PRACTICES IN INDIA IN REFERENCE TO SPECIFIC

INDUSTRY
Professional Skill Development Activity Project Submitted
In Partial Fulfilment of the Requirements for the Course
Business Law
At

AMITY SCHOOL OF BUSINESS

AMITY UNIVERSITY UTTAR PRADESH

Submitted by: Shambhavi Sharma C-63 Submitted to : Nidhi Gupta

Pooja Taneja C-02 Amity School of Business

PROGRAMME – BBA GEN.

Batch 2019-2022
 INTROD
UCTION
The cosmetic industry describes the industry that manufactures and
distributes cosmetic products. These include colour cosmetics, like foundation
and mascara, skincare such as moisturisers and cleansers, haircare such as
shampoos, conditioners and hair colours, and toiletries such as bubble bath
and soap. The revenue of the U.S. cosmetic industry is estimated to amount to
about 49.2 billion U.S. dollars in 2019. Since the early twentieth century, the
production of cosmetics has been controlled by a handful of multi-national
corporations
The major five main types of cosmetic products are,
 Skincare range.
 Haircare range.
 Face care range.
 Personal care range.
 Treatment range.
Currently, a variety of green tech solutions are available in the cosmetics
industry. Using these solutions, environment-friendly natural cosmetics can be
produced. There is a multitude of research into the use of new
environmentally friendly technological solutions as well. This study mainly
focuses on introducing the effects of environmental and health awareness
trends on the cosmetics industry, for both the producer and consumer sides,
focusing on the general laws and green business and also the industries
involved in eco-friendly productions. The main point of the analysis was to
perfectly identify the factors influencing green consumer behaviour. The
factors important for the analysis of research questions were found using
primary research, specifically, online questionnaire. Based on the literature
sources, the following were reviewed: A short history of natural cosmetics, the
specifics differentiating between cosmetics, the development of
environmental protection principles, the security regulations
 ABSTRA
CT
Consumers and producers are becoming more open to the usage of natural
cosmetics. This can be seen in them using a variety of natural cosmetic
resources and materials. This fact is further supported by the trend of
environmental and health awareness. These phenomena can be found within
both the producers’ and the consumers’ behaviour. Our research supports that
green or natural products’ role in the cosmetics industry is getting more and
more pronounced. The role of science is to determine the variables suggesting
the consumer to change to natural cosmetics. The primary aim of our research
is to find out to what extent the characteristics of the consumption of organic
foods and natural cosmetics differ. We would like to know what factors
influence consumer groups when buying green products. The novelty of the
analyses is mainly that consumers were ordered into clusters, based on
consuming bio-foodstuffs and preferring natural cosmetics. The cluster analysis
has multiple variables, namely: Consumer behaviour in light of bio-product,
new natural cosmetics brand, or health- and environmental awareness
preferences. The data was collected using online questionnaire, exclusively in
Hungary during April–May of 2018. 197 participants answered our questions.
The results of descriptive statistics and the cluster analysis show that there are
consumers who prefer natural cosmetics, whereas some of them buy
traditional ones. A third group use both natural and ordinary cosmetics. The
results suggest that on the market of cosmetic products, health and
environmental awareness will be a significant trend for both producer and
consumer behaviour, even in the future. However, it will not necessarily follow
the trends of the foodstuffs industry, as the health effect spectrum of
cosmetics is far shorter. In the future, the palette of natural cosmetics will
become much wider. The main reason for this will be the appearance of green
cosmetics materials and environmentally friendly production methods (mostly
for packaging). The consumers will also have the possibility to choose the ones
that suit them the most.
OVERVIEW
As per the Drug and cosmetic act 1940, “cosmetic” means any
article intended to be rubbed, poured, sprinkled or sprayed on, or
introduced into, or otherwise applicate to, the human body or any
part thereof for cleansing, beautifying, promoting attractiveness, or
altering the appearance, and includes any article intended for use
as a component of cosmetic.

Cosmetic Regulation in India

The cosmetic products in India are regulated under the Drugs and Cosmetics
Act 1940 and Rules 1945 and Labelling Declarations by the Bureau of Indian
Standards (BIS). BIS sets the standards for cosmetics for the products listed
under Schedule ‘S’ of the Drugs and cosmetics Rules 1945. BIS has also
provided the specification for Skin Creams and Lipstick in the Indian Standards
(IS) 6608:2004 and 9875:1990 respectively.
According to IS 6608:2004, all the raw materials requiring test for heavy metals
have been so tested and comply with the requirements, then the
manufacturer may not test the finished cosmetic for heavy metals and arsenic.
The Rule 134 of Drugs and Cosmetics Rules has laid down restrictions on use of
cosmetics containing dyes, colours and pigments other than those specified by
the Bureau of Indian Standards (IS: 4707 Part 1 as amended) and Schedule Q.
The Rule 145 of the Drugs and Cosmetics Rules prohibits use of lead and
arsenic compounds in cosmetics for the purpose of colouring. Rule 135
prohibits import of cosmetics in which a lead or arsenic compound has been
used for the colouring purpose. Rule 145 D and 135 A prohibits manufacture
and import respectively of cosmetics containing mercury compounds.
Registration of Import of Cosmetics
A Gazette Notification G.S.R 426(E) dated 19 th May 2010 has been issued by
the Government of India for amending the Drugs & Cosmetics Rules, 1945
providing for registration of import of cosmetics into the Country. This
provision was to come into effect from the 1st April, 2011. But in view of the
various possible difficulties apprehended by the stakeholders, its
implementation was deferred till the 31 set March, 2013.
All cosmetic products that are imported for sale in India now need to be
registered with the Central Drugs Standard Control Organisation (CDSCO)
which has been appointed as the licensing authority for the purpose of these
rules. This new ‘registration’ requirement is primarily to regulate
indiscriminate import of beauty and personal care products by traders with no
accountability for contents and no mechanism to fix responsibility in case a
consumer is not satisfied with the quality. The new regulation is an attempt to
check the sale of sub-standard cosmetic products and also to harmonise
import requirements with products manufactured in India.
What is the Registration Procedure?
The trade mark owner, who has no manufacturing unit in India but intends to
sell his goods by way of import through their appointed
importers/distributors/marketers in India, is now required to obtain
registration certificate to continue with their marketing activities in India. An
application for registration on Form-42, along with all requisite documents
needs to be submitted to Drugs Controller General (I), CDSCO, FDA office in
New Delhi.
How should one apply?
An application for the issue of a Registration Certificate for cosmetics intended
to be imported into India need to be made on a specified form, i.e. Form
42 either by:

1. The manufacturer himself having registered office in India or

2. by his authorised agent or
3. importer in India or
4. by the subsidiary in India authorised by the manufacturer

Further, the documents to be provided along with the application

include:
1. A request letter by the applicant on the letterhead of the importer or the
authorised agent applying for the registration duly stamped and signed
by the authorised person.
2. Form 42 – This requires details such as the location of the actual
manufacturing sites of the products. A single application can cover many
brands (read Trademarks/brand names), many variants; many pack sizes
and different manufacturing units corresponding to the products
applied.
3. Proof of payment of requisite fee: Challan indicating the payment of
registration fee of USD 2000 or its equivalent in Indian rupees for each
‘brand’ of cosmetic product and USD 50 for each variant.
 4. Power of Attorney (if the application is being submitted by an authorised
agent of the manufacturer. This document needs to be apostilled or
legalised by the Indian embassy in that country)
5. Schedule D III (details of the cosmetic products to be imported including
the chemical and safety data)
6. Label and art works thereof (this will contain the details of the actual
manufacturer and in cases where the manufacturer is not the brand
name owner, the label will at least state, ‘manufactured in XYZ country’)
7. Free Sale Certificate (FSC)/Marketing Authorisation
8. Manufacturing License (and attested English translation if not in English),
if any: If there are multiple manufacturers for a single product, all
manufacturers need to provide these documents
9. Product specifications and testing protocols: details of ingredients used,
quality data etc.
10.List of countries where Market Authorisation or import permission
or registration has been granted
11.Package inserts, if any (copies of any leaflets, product specification data
that goes inside the packaging has to be provided. No specific
requirement has been listed, it is suggested to provide information
about the potential side effects/allergic reactions and other safety
concerns and remedies available)
12.Copies of the information about the brands, products and manufacturer

What is the timelines for processing of application?

Within 90 days from the date of submission of the application form and
submission of the required documents (especially details required with
schedule D III), the registration certificate will be issued.
What is the validity of the registration certificate?
Registration certificate for import of cosmetics is valid for a period of three
years from the date of its issuance.
With a view to implementing the provisions of the aforesaid notification and
facilitate the registration process for import of cosmetics, there are various
guidelines/clarifications and requirements for the grant of Registration
Certificate.
Cliniexperts has a team of experienced regulatory professionals who help
smoothen down the process of getting the Registration Certificate. For more
details, /inquiry send us your details here and we shall get back to you at the
earliest.
Manufacturing of Cosmetics
The procedure to be followed in order to manufacture cosmetics in India has
been laid down under the Drugs and Cosmetics Rules, 1945. A license has to be
obtained from a Licensing Authority appointed by the State Government to
manufacture any of the cosmetics classified under Schedule M-II. The
application has to be submitted in Form 31 along with a license fee and an
inspection fee. The manufacturer has to ensure that the production is done in
the presence of a competent and qualified technical staff. The Licensing
Authority is required to order an inspection of the whole premises where the
operations are to be carried out, before granting or refusing the license. The
inspectors are appointed under the Act are required to submit a detailed
report to the Licensing Authority which can then decide whether to grant the
license or not.

Environmental Protection and Sustainability

on the Cosmetics Market

Environmental protection problems became a mainstay in public opinion in

recent decades. This serves as an incentive for consumers to buy green
products. The increasing awareness of consumers towards preferring green
products is placing green consumption into focus more and more. Based on
the global research of Nielsen in 2015, the number of consumers that wish to
reach an increased interest in green products is highest in the Asian-Pacific
region.

In light of this, green strategy became a critical element of business

sustainability, since in reality, few companies are capable of realising a green
strategy on an organisational level.
“Green” or “environment-friendly” refer to the values, attitudes,
understandings, knowledge, and behaviour related to the environment.
Companies capable of realising environmental incentives motivate consumers
to purchase green products, and also aid the global trend of environmental
protection.
A reason for social concern in environmental awareness is the depletion of
mineral and petrochemical resources, which is also used as reasoning to create
a more circular (closed material and energy cycle) economy. In this process,
the role of Life Cycle Assessment (LCA) is highly important, since it deals with
the analysis of effects products have on the environment, taking the entire
production chain, and the product’s whole shelf-life into account.
Cosmetic and personal body care products are widely used in massive
quantities, therefore, their frequent usage cause them to leak back into the
environment in similarly massive quantities. There are many products that are
biologically active, described by preservative nature and bio-accumulation
potential. This means a hazard to the ecosystem and human health. Highly
pollutant materials important from an environmental concern perspective are
UV-shields, some preservatives (paraben, triklosane), and plastics.
In recent years, industrial process-sourced waste quantity has been increasing
steadily. Multiple industries produce a variety of disposable by-products,
which are rich in valuable mixtures. Their description and valorisation can not
only shape them into highly valuable products for the different areas of bio-
technology like cosmetics and pharmaceuticals, but also decrease their effect
on the environment, and related treatment costs. Cosmetic active ingredients
extracted from fish, meat, and dairy products also have multiple examples.
Such are the mixtures and extracts from the waste produced by agricultural or
foodstuffs production. Such products are efficient, cheap, and sustainable,
thereby offering an alternative to plant-sourced extracts’ frequent supply.
Furthermore, if waste products are sourced from an eco-farm, they are an
even more valuable source of safe extracts needed for these cosmetics, since
there are no remaining pesticides, or potentially toxicant materials.
Plastic waste management is still a reason for concern for most countries. In
the cosmetics industry, some define different strategic alternatives for the
same problem’s management, which mostly aim at the dedicated planning of
packaging. Using heat energy produced from biomass, or renewable energy
resources are also viewed as advantageous trends in the production process of
cosmetics
 LAWS AND REGULATIONS
The FD&C Act prohibits the marketing of adulterated or misbranded cosmetics
in interstate commerce.

“Adulteration” refers to violations involving product composition--whether they

result from ingredients, contaminants, processing, packaging, or shipping and
handling. Under the FD&C Act, a cosmetic is adulterated if--

 "it bears or contains any poisonous or deleterious substance which may render
it injurious to users under the conditions of use prescribed in the labelling
thereof, or under conditions of use as are customary and usual" (with an
exception made for coal-tar hair dyes);

 "it consists in whole or in part of any filthy, putrid, or decomposed substance";

 "it has been prepared, packed, or held under insanitary conditions whereby it
may have become contaminated with filth, or whereby it may have been
rendered injurious to health";

 "its container is composed, in whole or in part, of any poisonous or deleterious

substance which may render the contents injurious to health"; or

 except for coal-tar hair dyes, "it is, or it bears or contains, a colour
additive which is unsafe within the meaning of section 721(a)" of the FD&C
Act. (FD&C Act, sec. 601)

Who is responsible for substantiating the safety of cosmetics?

Companies and individuals who manufacture or market cosmetics have a legal

responsibility to ensure the safety of their products. Neither the law nor FDA
regulations require specific tests to demonstrate the safety of individual products or
ingredients. The law also does not require cosmetic companies to share their safety
information with FDA.

FDA has consistently advised manufacturers to use whatever testing is necessary to

ensure the safety of their products and ingredients. Firms may substantiate safety in
a number of ways. FDA has stated that "the safety of a product can be adequately
substantiated through (a) reliance on already available toxicological test data on
individual ingredients and on product formulations that are similar in composition
to the particular cosmetic, and (b) performance of any additional toxicological and
other tests that are appropriate in light of such existing data and information." 
 COMPANIES GREEN BUSINESS
PRACTICES AND GREEN PRODUCTS

AVEDA

A recent entrant into the Indian premium haircare market, Aveda is rooted in

Ayurveda, and features natural, sustainable ingredients that are good for the
hair and for the environment. The label’s most popular three new collections –
Cherry Almond, Sham pure, and Rosemary Mint are already a hit and now, the
Sap Moss range is getting everyone curious. The good thing about them is that
they are sustainably sourced, come with 100 percent Post Consumer Recycled
PET packaging, and micellar technology to remove oil build-up leading to fewer
hair washes. The label has also partnered with charity: water, an organisation
that strives to provide clean water to communities in India, Nepal,
Madagascar, and Ethiopia (the brand has supported clean water initiatives
since 1999). A veteran in environmental responsibility, their annual Earth
Month campaigns have raised over $60 million for environmental causes
around the world.

KIEHL’S

KIehl’s has supported initiatives to protect our environment by reducing plastic

waste with their Recycle and Be Rewarded Campaign. On returning two empty
bottles, you are eligible to get a travel size sample; returning four more bottles
entitles you to get a Kuehl’s Lip Balm #1; and return of 10 bottles entitles you
to a full-size product valued at up to of Rs 1,400.
The label also maximises the post-consumer recycled materials in their
packaging, even going as far as to give reusable tote bags to customers while
they shop. That, apart from working with sustainably-sourced and fairly traded
ingredients whenever possible

PAHADI LOCAL
Protecting our precious ecosystem in the hills is the goal Pahadi Local is
working towards. Right from packaging, to procurement, to using sustainable
materials and pricing Pahadi Local does it all. The brand helps out with
initiatives like re-plantation, orchard development, and ecology protection,
and also makes great efforts to stay on the right side of sustainability with
simple steps. Return any three Pahadi Local product containers (they will
collect it from your doorstep) and as a token of gratitude, you will be gifted a
50ml Gutty kea Tel (Apricot Kernel Oil) on your next online purchase over Rs
1,500. Their hashtags #goodnessofthehills #pahadipreserve truly say it all.

Gutty kea Tel or Apricot Kernel oil, which is extracted from the orchards of the
Himalayas and cold-pressed into a bottle, can be used to keep the skin and face
moisturised, reduce cellulite and stretch marks, reduce joint pain and more

MAC
M.A.C follows little steps to create awareness. The basic premise: If you take
six empty M.A.C containers to any store for them to recycle, you’ll get free
makeup – a lipstick colour of your choice. This is via the M·A·C Program that
has had a great response. And you don’t even have to bring all of them
together – just clock in whenever you get them so it tallies up. Best part: The
brand accepts anything ‘primary packaging’, which means, lipstick tubes, lash
cases, blush compacts, eye shadow pots, foundation tubes and bottles, and
skincare bottles.

FOREST ESSENTIALS
“If you can’t eat it, don’t use it.” is the Ayurveda brand’s mantra. Forest
essentials creates all its products from plants and its extracts, striking a perfect
balance between providing your skin with natural beauty, while keeping the
environment healthy. Besides being cruelty free, the brand also sources
ingredients from local farmers who practice sustainable farming and efficient
waste management.

LAKME

Lake Salon launched its network-wide sustainability initiative under the

campaign ‘Happy New You’. One of the largest chains with 460+ salons across
154+ cities, Lakme Salon aims to reduce its carbon footprint and build a
sustainable business model through this initiative, while also inspiring their 1
million+ customers to adopt environment-friendly practices.
Lakme Salon took the first steps in this direction in 2018 by making small
changes in their operations i.e. switching to LED lighting, installing water-
saving nozzles and maintaining optimal a/c temperatures in the salons.
Additionally, they planted 40,000 trees that will offset the total carbon
footprint of 69 Salons through electricity consumption, in 20 years.
Taking this initiative one step higher, the 2nd phase of the campaign launching
on December 13 will have all 460+ salons take multiple actions to go green.
These initiatives include a complete shift to e-bills, thereby reducing paper
consumption; implementing waste segregation in the salons; installation of
energy-efficient fixtures that will reduce energy consumption by up to 75 pc;
switching to biodegradable consumables; introducing glass bottles – replacing
single-use plastic and adding high oxygen indoor plants
“The Unilever Sustainability mission has inspired our team to articulate and live
the Lake Salon vision – BEAUTIFY THE FUTURE – to create a beautiful future for
our consumers, employees and franchisee partners by building a sustainable
business,” said Push Karaj Shenail, CEO, Lakme Lever. He further said that the
company is making Lakme Salon operations sustainable from December
through our various initiatives. Our vision is being supported and led by our
franchisee partners. While the sustainability initiatives are being implemented
across the network, we have also launched 8 green salons with our franchise
partners this year. These salons use eco-friendly design and materials in
construction. We will scale this up with more partners in 2020.”

HIMALAYA

The Himalaya Drug Company, a global herbal health and personal care
company based in India, is strongly committed to sustainability. The Company
 has been concerned with the accumulation of waste and is on a mission to
reduce the amount of packaging materials used, in order to reduce waste Over
the past decade, Himalaya has been diligently working towards improving its
waste management process. The Company’s facility at Bengaluru properly
segregates and systematically handles all varieties of waste generated within
the campus. The initiatives are paying off with 90% of solid waste and 100% of
liquid waste being recycled. Paper, plastic, and other recyclable waste are put
under the charge of certified recyclers. The Himalaya Drug Company today is a
certified “zero discharge” facility.

IMPORTANCE OF GREEN BUSINESS PRACTICES

For the consumer, the attractions of sustainable cosmetics outweigh extra costs or
research. Three major draws of green cosmetics include environmental
responsibility, increased effectiveness, and long-term health.

1. Environmental Responsibility
Modern consumers have a growing global consciousness, and they care about
social and environmental responsibility. One of the main benefits of sustainable
products is their kinder environmental impact.

Every week, new stories surface about dangerous carbon outputs or vast plastic
floats in the ocean. Many petrochemicals in conventional cosmetics are toxic
pollutants and degrade the environment as well as our bodies. As we become more
ecologically aware, consumers demand natural, low-polluting products.
A recent example of pollution and consumer demand is the ban of microbeads.
Microbeads are tiny pieces of plastic found in many shower scrubs and exfoliating
products. However, they do not dissolve, and in 2015, a study reported that over
eight trillion microbeads were being washed into our waterways every day. Later
that year, U.S. President Barack Obama signed a bill banning the small plastics,
illustrating that environmental stewardship is an increasing priority to the nation
and its consumers.
2. Increased Effectiveness
Natural and oleochemical ingredients are less likely to cause skin irritation or
allergic reactions. Without synthetic, toxic chemicals or artificial colors,
sustainable products rely on the healing properties found naturally in plants and
animals — the ingredients humans have been using for centuries.

Consider glycerine, a natural derivative of palm oil. The clear, non-toxic liquid is

used in soaps, pharmaceuticals and cosmetics. Since it is a humectant, glycerine
can retain water, making it an excellent moisturizer. Glycerine enhances the
body’s hygroscopic characteristics, encouraging the skin to absorb and hold on to
water. As a non-irritating substance, it can be applied anywhere on the body. It is
an effective anti-aging ingredient and, due to its anti-microbial properties, can also
serve as an acne treatment.

3. Long-Term Health
While petrochemicals may deliver short-term results, the long-term effects can be
highly toxic to humans and the environment. Years of synthetic cosmetics use has
been traced to headaches, eye damage, acne, hormonal imbalance and premature
aging. Phthalates have even been linked to cancer and type II diabetes.
By choosing sustainable cosmetics, a consumer forgoes the stress and uncertainty
of toxic, synthetic products and invests in their long-term health and beauty.

SCOPE AND IMPLEMETATION

(GLOBALLY)
Creating environmentally-friendly products doesn’t mean sacrificing quality
or profits. With the public eye increasingly focusing on corporate ethics, small
steps toward sustainability can significantly improve public opinion and boost
sales.

1. Improved Product Quality

High-quality cosmetics provide effective results without putting the consumer at
risk. However, many petrochemical products, like mineral oil, present a low level
of toxicity to users. When aerosolized and inhaled, such products have been shown
to be allergens and, as some studies suggest, may cause cancer.

With most bio-based products, the toxicity to the end-user is reduced, creating
safer, higher-quality products.
2. Enhances Brand Reputation
Green products send a message to consumers — this company is committed to
quality, safety and sustainability, and is worthy of your trust.
As more and more people grow concerned about synthetic products, consumers are
looking for companies that practice transparency and honesty. By moving towards
sustainable, green products, you show your global and social awareness. This
promotes customer loyalty to a brand, not just to products. People will begin —
and continue — to purchase a company’s products because they agree with its
mission.

3. Increases Corporate Responsibility

Green cosmetics also present a unique opportunity for cosmetics manufacturers to
focus on corporate responsibility. In addition to the positive impacts green
marketing can have on a company’s image, taking the extra steps of sustainable
sourcing or packaging can also make a significant impact.

When a company increases its sustainability initiatives, it takes ownership for its
impact on global health and economies. By taking corporate responsibility for its
manufacturing, a business gains authority and respect among consumers as well as
suppliers and other members of the distribution chain.

Manufacturers shifting to sustainable cosmetics production have a promising

future.

The growing interest in sustainable cosmetics has had a significant effect on the
cosmetics market. With an increasing number of consumers and retailers
demanding cosmetics with natural or sustainable ingredients, the green cosmetics
market has experienced a 15 percent annual growth rate.

This growth rate far outpaces that global personal care and cosmetics industry,
which is currently sustaining an overall 5 percent annual growth rate. By 2025,
the organic beauty market will reach $25.11 billion.
Within the personal care industry, the oleochemicals market is increasing as
cosmetic manufacturers continue to turn away from petrochemicals. Fatty acids, in
particular, should experience boosts on the green side of the market, considering
that they accounted for 57 percent of the total oleochemical product demand in
2013.
The Asia-Pacific region is an area of particular interest for this market since the
region accounted for 41.9 percent of the total oleochemicals market in 2013 for its
abundance of raw materials and large consumer base. Both figures are unsurprising
considering the quantities of bulk cosmetic glycerine regularly exported from the
region.

CONCLU
SION
As petrochemicals continue to experience volatility in the market, turning to
sustainable material sources may be the best long-term decision for cosmetics
manufacturers worldwide.

Consumers are increasingly demanding sustainable products that are not toxic to
themselves or the environment. The natural market is growing exponentially, and
choosing raw, natural materials will cement your brand as a safe choice — both
environmentally and economically.