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Posted: February 22, 2007
New report slams nanotechnology in cosmetics
(Nanowerk News) Things could get ugly for investors who ignore glaring health risks in the cosmetics industry, warns a new report from the Investor Environmental Health Network (IEHN), which represents 20 investment organizations with $22 billion in assets under management. A powerful convergence of forces - including shareholder resolutions, improved health risk information, European and U.S. regulatory changes and growing consumer pressure -- could drive sweeping changes in the U.S. personal care and cosmetics industry, with significant implications for investors, according to IEHN.
Entitled "Beneath the Skin: Hidden Liabilities, Market Risk and Drivers of Change in the Cosmetics and Personal Care Products Industry" (pdf download, 2 MB) the brandnew IEHN report describes a ticking time bomb scenario of a largely self-policed industry in which regulatory action by the U.S. Food and Drug Administration (FDA) typically is triggered only by reporting from the companies themselves. "The result is a system that permits significant consumer exposure to occur before sufficiently rigorous safety testing is conducted - ultimately, a game of roulette which places consumers, manufacturers and investors at risk," said Sanford Lewis, an attorney specializing in corporate accountability and one of the report's authors.
Scientists and consumers also have expressed concern that the industry's use of nanoparticles - which involve the manipulation of microscopic particles - may allow them to penetrate into the bloodstream and the lymph system and damage tissue.
"Once they surface, health hazards may pose a serious threat to brand loyalty with significant implications for profitability and market share. It is difficult to overstate the potential magnitude of this challenge," said Lauren Compere, director of shareholder advocacy at Boston Common Asset Management, which has introduced shareholder resolutions on safer cosmetics at CVS Corporation.
The weak U.S. regulatory structure also limits product marketability in the 457-million person European market. In 2005, the European Union banned more than 1,000 chemicals for use in cosmetics, the report notes. Closer to home, both California, the world's sixth-largest economy, and Canada have tightened their regulations of personal-care products.
The report says that "while questions about the health impact of nanotechnology are certainly broader than the cosmetics industry, their usage in cosmetics and personal care products represents a source of concern to investors since cosmetics companies are already deploying nanotechnology in various applications."
Examples of new nanotechnology applications in personal care products include:
Penetration enhancer - Encapsulating or suspending key ingredients in so-called nanospheres or nanoemulsions, increases their penetration into the skin:
L’Oreal (which ranks No. 6 in nanotechnology patent holders in the U.S.) has used polymer nanocapsules to deliver active ingredients, e.g. retinol or Vitamin A, into the deeper layers of skin. In 1998 the company unveiled Plentitude Revitalift, an anti-wrinkle cream using nanoparticles.
Freeze 24/7, a new anti-wrinkle skincare line is planning to incorporate nanotechnology in future products.
La Prairie’s product, the Dollars 500 Skin Caviar Intensive Ampoule Treatment, claims to minimize the look of uneven
skin pigmentation, lines and wrinkles in six weeks using nanotechnology. La Prairie’s vice president of retail marketing and training, Holly Genovese, says the nanoemulsions in the product “optimize the delivery of functional ingredients into the skin and allow these materials to get to the site of action quicker”.
Procter & Gamble’s Olay brand was designed with nanoemulsion technology in 2005.
Other companies using nanotech in their skin products as of 2005 include: Mary Kay and Clinique from Lauder; Neutrogena, from Johnson & Johnson; Avon; and the Estee Lauder brand.
Hair products – using nanoemulsions to encapsulate active ingredients and carry them deeper into hair shafts.
PureOlogy began experimenting with nanoemulsions in 2000 when the company’s founder set out to create a product line especially developed for color treated hair.
Sunscreens – the zinc and titanium in sunscreens are “micronized”, making them transparent, less greasy, less smelly and more absorbable into the skin.
DDF planned more nanotech-enhanced anti-aging products as of 2004.
Colorescience markets a product named Sunforgettable, a powder which contains titanium dioxide nanoparticles.
Paris-based Caudalie launched its Vinosun Anti-Aging Suncare, a sunscreen and anti-aging treatment that relies on “nanomized” UV filters and antioxidants, in the US in 2003.