Source of this article: Times Finance Author: Zhou Hang As ESG gradually becomes a required course for beauty companies, Proya has also become a “top student” in answering the question. On the evening of April 18, China’s local beauty company Proya (603605.SH) released its 2023 a

Source of this article: Times Finance Author: Zhou Hang

When esg gradually becomes a required course for beauty companies, Proya has also become a "top student" in answering questions.

On the evening of April 18, China’s local beauty company Proya (603605.sh) released its 2023 annual performance report. Last year, Proya achieved operating income of 8.905 billion yuan, a year-on-year increase of 39.45%; net profit attributable to shareholders of listed companies was 1.194 billion yuan, a year-on-year increase of 46.06%.

This is a report card that far exceeds the industry average performance. Proya's performance has reached a record high, and its revenue has maintained steady double-digit growth for six consecutive years, becoming China's first local beauty company to enter the "8 billion yuan club".

As a "long-distance runner" on the beauty track, Proya not only has outstanding financial results, but also gained a lot from its esg strategic practice. The "2023 Sustainability and Environmental, Social and Corporate Governance (esg) Report" shows that in 2023, Proya's wind esg rating jumped to aa level, ranking first in the personal products industry for the first time.

Currently, the ESG practice in China's beauty industry is still in its early stages, but it is the only way for the industry to develop healthily. As early as 2021, Proya has already carried out a series of esg practices. In August 2022, marked by the release of the first sustainable development strategic plan, Proya's esg system has evolved from preliminary exploration to scientific and systematic evolution.

As an industry leader, Proya’s esg practice methodology is also crucial to the development of the entire industry.

Turning beauty into a sustainable business

Since last year, many consumers have discovered that Proya’s star products have upgraded their packaging. In fact, behind the packaging upgrades of these star products lies Proya’s sustainable business experience.

Taking Proya Anti-Double Essence 3.0 as an example, this product will begin to launch refill solutions in 2023 to encourage consumers to choose refills. Not only Dual Antibody Essence 3.0, Ruby Cream 3.0 will also continue the sustainable concept in new product packaging.

After the upgrade, the plastic usage of a single product in the ruby ​​cream packaging has been reduced by 22% compared with the original one. The plastic usage of the Ruby Cream 3.0 product refill, which is not yet on the market, will be reduced by more than 100 grams per piece.

In order to realize the sustainability of packaging, Proya also cooperated with experts in the packaging material industry to compile the "Proya Sustainable Packaging Management Manual" last year. According to the latest data released by Proya, the company's sustainable packaging materials accounted for 25.47% in 2023, an increase of 25.31% compared to the base year of 2021.

But the above are just a small part of Proya's esg layout. According to the previously released esg strategic plan, Proya will use comprehensive esg management as the cornerstone to promote the development of three important sectors: sustainable business, sustainable value chain, and sustainable social ecology, and has achieved many results.

Take sustainable business as an example. In 2023, Proya Longwu R&D Center and Proya Shanghai R&D Center were officially put into use, and the new raw material ingredient "3,3,5-trimethylcyclohexanol succinate dimethylamide" was successfully registered. At the same time, Proya also established a continuous product evaluation working group based on the product development process.

Important progress has also been made in the construction of sustainable palm oil and low-carbon factories.

In 2023, Proya officially joined the Roundtable Initiative on Sustainable Palm Oil (rspo), basically completed the review of the use of palm oil as raw material for existing products, and started the replacement of certified palm oil. The production factory has also further transformed into a digital and intelligent low-carbon factory, and won many honors such as "Green Supply Chain Management Enterprise of the Year 2023" and "Provincial Green Low-Carbon Factory of the Year 2023".

Not only that, Proya’s ESG work has also received support from supply chain partners. In 2023, Proya has evaluated the ESG performance of a total of 264 suppliers, and 100% of its major partners have conducted ESG compliance assessments. Proya also teamed up with its top ten strategic partners (suppliers) to jointly issue a carbon reduction declaration, committing to reducing its own carbon emissions by 2025.

Injecting social value into the brand

According to Proya, the beauty of a brand not only comes from the external charm created by its products, but also lies in its deep concern and positive contribution to social issues.

Proya pointed out in the esg report, “The existence and development of an enterprise cannot be separated from the social environment and humanistic context in which it is located. Therefore, paying attention to and participating in public welfare undertakings is Proya’s unshirkable responsibility and internal driving force as a leading cosmetics company in the industry. "

In 2023, Proya donated money to launch the Zhejiang Proya Charity Foundation, focusing on "promoting education development", "exploring social innovation", "assisting emergency disaster relief" and "supporting employee charity" and other public welfare directions, and carried out "Going to Distance" and "One County, One County". "Dream" and "Proya Hope Primary School" and other public welfare projects, and launched activities such as "Old Renovation" and "Hakimi Winter Warmth Plan". In 2023, Proya invested 8.6612 million yuan in social welfare. From 2022 to the end of the 2023 reporting period, Proya invested a total of 10.0958 million yuan in social welfare.

Not only that, Proya also pays attention to the four major social themes of gender equality, love and intimacy, youth and growth, and mental health, and actively arranges online content marketing and offline activities to enrich the brand with more social meaning and spiritual value. .

In these contents and activities, Proya advocates multiple value orientations, including breaking gender prejudice and bravely facing the true face of love and intimacy; paying attention to school bullying and supporting the healthy growth of teenagers; facing up to emotional experience, caring and acceptance We have achieved strong resonance with consumers.

Specifically, in 2023 alone, Proya produced and distributed 110,000 copies of the "We All Can" gender education picture book readable by all ages, launched the "Firefly Project" public welfare activity against school bullying, and also released " TVCs with themes such as "Handsome Female Soldiers" and "Mom is the Best in the World". Social advocacy activities benefited 233,000 people directly and 247 million people indirectly.

data shows that from 2022 to the end of the 2023 reporting period, Proya’s social advocacy activities have benefited a total of 665,100 people, and indirectly benefited 365 million people.

Proya said that this series of social advocacy and public welfare practices are not only an important part of Proya's brand culture, but also an emotional bond that establishes a deep connection between Proya and consumers and the general public.

esg is a "required course" in the new growth stage of the industry

In addition to Proya, local Chinese beauty companies such as Shanghai Jahwa and Yixian E-commerce are paying more and more attention to the disclosure of esg-related reports.

According to statistics from CITIC Securities, the CSR report disclosure rate of A-share beauty companies has rapidly increased from 27% in 2015 to 73% in 2021, which continues to be higher than the disclosure rate of the entire A-share market. Ernst & Young's "White Paper on ESG Trends in the Beauty and Personal Care Industry" also pointed out that from 2020 to 2022, the number of sustainable development reports disclosed by China's listed beauty and personal care companies increased from 14 to 21.

In the past five years, China’s local beauty companies have ushered in a bright moment amidst the opportunities arising from online consumption dividends and market changes. As the industry matures, market competition will inevitably shift from scale growth to endogenous growth. An analysis by

pointed out that through active environmental management, social responsibility and strong governance, beauty companies can not only enhance their competitiveness in the global market, but also build a more stable and sustainable business model.

In addition, sustainable consumption has become a new trend that beauty companies cannot ignore. According to "Insights on Sustainable Consumption Trends in Asia Pacific" released by Bain, 90% of respondents are willing to pay a premium for sustainable products, and as many as 51% of respondents regard environmental protection as the three most important shopping criteria. one.

Specific to the beauty industry, Ernst & Young's "White Paper on ESG Trends in the Beauty and Personal Care Industry" also pointed out that consumers' attitude towards beauty and skin care is more scientific and rigorous, and their attention to the safety and environmental impact of beauty and skin care products has increased significantly. The sustainable concept of products has become one of the factors they consider when purchasing products.

It is worth mentioning that the investment trends in the capital market are also changing. The "2023 China-EU Trade Insights White Paper on ESG Development in Major Industries" shows that in 2020, the scale of global sustainable investment has reached 35.3 trillion. It is expected that by 2025, the global investment scale of esg will exceed 50 trillion, accounting for one-third of the total global asset investment.

Ernst & Young Sustainable Development Services Partner Zhang Bin once pointed out to Times Finance, “Single methods such as negative screening can no longer meet their needs for esg investment strategies, but they hope to adopt a more proactive and systematic esg investment strategy. Therefore, they The requirements for transparency and comparability of esg information disclosure continue to increase in order to obtain better returns and risk management effects.”

For Chinese local beauty companies that want to truly compete with international beauty groups, building a scientific and systematic ESG system has become a "compulsory course". The exploration of esg by leading local companies is an important cornerstone for the industry to move towards high-quality development. At present, Proya's early start and practice in esg have also become a model for encouraging beauty companies to make efforts in esg.