Navigating regulatory impact across the cosmetic supply chain

Navigating Transparency, Regulation and Certification: The Evolving Landscape for Naturals

Global scrutiny of greenwashing is intensifying as consumers demand stronger environmental protection, and investors increasingly prioritise sustainability. In the cosmetics sector, this shift goes beyond traditional, product- specific regulation. Manufacturers now face a complex mix of horizontal rules affecting raw materials, claims, sourcing, and product substantiation. As brands move toward natural formulations, ethical supply chains, and biodiversity-friendly sourcing, regulatory expectations for transparency and verification are rising. Navigating this landscape requires adaptation, vigilance, and robust compliance strategies.

Transparency Demands and Claims
Within the next 12-months, the application by Member State of Directive (EU) 2024/825 (1), which amends the Unfair Commercial Practices Directive, is set to reshape how environmental claims are communicated across all sectors, including cosmetics. By strengthening rules against misleading actions and omissions, the Directive prohibits unsubstantiated environmental claims – particularly forward-looking ones – and imposes stricter criteria for product comparisons. Its application aligns with consumers’ growing expectations for traceability, verifiable environmental information and clarity about sustainability labels.

To meet these expectations, compliant labels will be restricted to those supported by third-party certification or public schemes. Combined with new restrictions on vague or generic environmental claims, companies operating in B2C markets will need to carefully evaluate both their existing and future claims to ensure they meet the Directive’s requirements. Manufacturers must also evaluate whether the label criteria they are currently using support their claims and comply with the new regulatory standards. Looking ahead, developing products, defining claims and substantiating them, particularly through a label scheme, will go hand-in-hand to ensure claims that are in-scope are specific, justified and verified. This shift also provides an opportunity for private label schemes, provided they already comply with, or can adapt to, the Directive’s governance, technical, and operational requirements.

As consumers and NGOs intensify scrutiny, accurate, transparent, and lifecycle-based communication becomes central to maintaining brand credibility. Consequently, companies will need detailed substantiation for all environmental and social claims. Failure to comply brings the risk of penalties, litigation, reputational damage, and growing investor scrutiny.

To support consistent application of the new Directive, in November 2025 the European Commission published answers to frequently asked questions from stakeholders. The FAQ outlines areas where caution is needed, such as using nature-related imagery next to claims on “natural ingredients” that may be seen by the average consumer as a voluntary trust mark or quality seal. Equally, the FAQ contextualises the use of claims such as “organic” to the exiting regulatory framework for foodstuffs, or “vegan” where environmental or social benefits might be implied.

Regulatory Pressure on Naturals
Natural complex substances (NCSs), which are essential to many natural cosmetics, face intensifying regulatory scrutiny. Notable examples include the way substances such as tea tree oil (TTO) or constituents of NCSs (e.g., p-cymene) will be regulated under Article 15 of the Cosmetics Products Regulation (CPR.)

TTO, for instance, contains more than 100 composites and is considered a substance with more than one constituent (MOCS), which subjects it to further examination under Article 54a(1) of amended CLP Regulation (EU) 2024/2865. In 2023, following an ECHA review for harmonised classification, ECHA’s Risk Assessment Committee (RAC) recommended classifying TTO as CMR 1B – stricter than the original category 2 classification proposed by Poland. In response, industry stakeholders submitted a dossier to defend its safe use in cosmetics. In June 2025, the Scientific Committee on Consumer Safety (SCCS) presented its final Opinion, which supported the safe use of TTO in cosmetics under defined conditions. What remains uncertain, however, is how the EU Commission will continue with the associated risk management provisions.

Besides the individual NCSs, a broader regulatory challenge emerges when a constituent would be classified as a CMR. This is already the case for p-cymene, a component found in numerous essential oils such as cumin, thyme oil, tea tree, and oregano. In 2022, Sweden proposed classifying this substance as a CMR 1B. As with TTO, such classification would trigger a ban under Article 15(2) of the CPR, potentially requiring reformulation or removal of a vast number of “natural” and essential-oil–based products. Yet, in practice, removing a single constituent from a NCS without altering its overall properties is often technically and economically unfeasible. Moreover, one constituent can impact multiple NCSs, amplifying the regulatory impact. Fr naturals especially, suitable alternatives may not exist.

Fortunately, these wider implications for naturals formed part of the European Commission’s Chemicals Omnibus (VI) Regulation, (2) published in July 2025. Nevertheless, in November the Council of the European Union’s General Approach (3) on the file appeared to miss the chance to simplify provisions in the Cosmetics Products Regulation and tackle long-lasting competitiveness hurdles identified by the industry, while still maintaining the highest consumer safety standards. As part of the ordinary legislative procedure, the European Parliament is now developing its own position. The final outcome – and the resulting impact on naturals – remains to be decided.

Resolving this issue is essential to avoid unnecessary restrictions in cases where the safety of NCSs can be adequately assessed. If unresolved, a domino effect may limit the palette of natural ingredients, reduce the diversity of natural cosmetics on the market, contradict global consumer trend for natural products, and run contrary to the EU’s ambitions for the bioeconomy (4) and sustainable substance use.

Reformulating Naturally
Changes in ingredient classification, sustainability-claims rules, or supply-chain requirements can drive reformulation. For natural products – where ingredient profiles are inherently complex – replacing a single constituent can be technically unfeasible, economically prohibitive, or commercially undesirable. Reformulation may also delay product launches, increase costs, and require additional testing to ensure stability, efficacy, and safety.

Over the last half decade, disruptions ranging from the pandemic to geopolitical tensions have constrained access to key natural raw materials due both to climate-induced and conflict-related shortages. These pressures have increased costs and destabilised supply chains. Climate change further amplifies these risks across many crops essential to natural cosmetics. Because climate impacts transcend borders, regional sourcing alone may not mitigate volatility. Consequently, alternative botanical sources or evolving technologies – such as biotechnology and carbon-capture-derived feedstocks – may help ease pressures. However, significant technical and economic barriers remain for reformulating with natural ingredients, including limited economies of scale, higher production costs compared with fossil-based alternatives, a lack of harmonised definitions or certifications, challenges integrating bio-based materials into existing chemical infrastructure, and regulatory uncertainty that can discourage long-term investment.

These factors can restrict innovation, especially for SMEs, and reduce the availability of diverse natural raw materials. Simultaneously, ongoing regulatory actions associated with cosmetic legislation and green claims pose both opportunities and challenges for sourcing, formulation, and substantiation. Indeed, compliance with new requirements – ranging from additional legal obligations to unclear guidance on their implementation – can generate uncertainty and raise costs due to lower availability of compliant materials. A recent example is the EU Deforestation Regulation (EUDR): Palm (kernel) oil and its derivatives, widely used in natural cosmetics, fall within its scope. However, while the Regulation’s objective of promoting sustainable sourcing and avoid deforestation is positive, the limited availability of compliant quality materials, coupled with challenges in supply chain management, traceability and due diligence issues, adds complexity in an already complex system. That said, policymakers have responded to stakeholder feedback, with the application of the regulation now scheduled for 30th December 2026 (5).

Given the complexity of natural-ingredient sourcing, diversification is becoming a critical resilience strategy. Manufacturers will likely need to expand geographical sourcing, engage in pre-competitive collaborations, and adopt standardised best practices to secure supply and support sustainable innovation. Third-party certification and robust traceability systems provide measurable assurances for consumers and regulators. Digital labelling, blockchain-based traceability, and improved data-management tools also offer opportunities to meet growing reporting and disclosure requirements.

To thrive in an increasingly regulated environment, brands must integrate regulatory foresight into product development. Early identification of vulnerable ingredients, and proactive reformulation planning can help mitigate future disruptions. Companies that combine innovation with strong ethical sourcing and transparent communication will be best positioned to lead.

Conclusion
The regulatory and commercial landscape for natural cosmetics is evolving rapidly. Rising expectations for transparency, expanding rules on environmental claims and ingredient safety, and supply-chain volatility are creating both challenges and new opportunities. By adopting resilient sourcing strategies, investing in robust substantiation and traceability, and engaging proactively with regulatory developments, manufacturers of natural cosmetics can navigate complexity while helping to shape the future of sustainable beauty.

Article written by Dr Mark Smith, NATRUE Director General, and originally published on HPC Today (available here.)

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