For 15 consecutive years, Chando has disclosed ESG reports. Now, it's turning "sustainability" into a business | The Frontline

Against the backdrop of a slowdown in China's beauty industry growth and intensifying price competition, more and more brands are beginning to re - evaluate the commercial significance of "sustainable development".

On May 26th, Chando Group released its "2025 Annual Sustainable Development Report", which marks its 15th consecutive year of disclosing ESG - related content. Compared with the early corporate social responsibility narratives mainly focused on public welfare and environmental protection, this year's report emphasizes "quantifiability" and "industrialization" more: including formulating a carbon reduction path for the first time according to the Science Based Targets initiative (SBTi) standards, expanding the disclosure boundary of Scope 3 carbon emissions, and directly linking biodiversity, green raw materials, intelligent manufacturing, and supply - chain efficiency.

For the current Chinese beauty industry, this change is not just about "doing ESG", but more like looking for competitiveness in the next stage.

In the past few years, ESG has mostly been a standard practice for international consumer goods companies. International beauty groups such as L'Oréal, Estée Lauder Companies, and Shiseido have all incorporated carbon reduction, green packaging, and biodiversity into their long - term strategies and gradually extended them to the supply chain, raw material procurement, and factory systems.

As the domestic beauty industry enters the stage of stock competition, ESG has begun to change from an "add - on" to an important variable affecting the long - term operation of brands. Especially when the market pays more and more attention to high - end positioning, R & D capabilities, and supply - chain transparency, enterprises need to prove not only sales growth but also their long - term operation capabilities.

Chen Juanling, the general manager of public affairs at Chando Group, told 36Kr that although ESG still requires huge investment at this stage and it is difficult to calculate the value of this investment from the perspective of ROI. However, from a long - term development perspective, the concept of ESG will penetrate into Chando Group's products and services and ultimately become part of the group's competitiveness.

One of the key points disclosed by Chando this time is its 2030 carbon reduction target.

According to the report, with 2023 as the base year, the group plans to reduce the absolute greenhouse gas emissions in Scope 1 and Scope 2 by 42% by 2030 and for the first time include six key categories in Scope 3 into the disclosure boundary. For the consumer goods industry, Scope 3 usually involves more complex supply - chain links such as raw material procurement, logistics and transportation, packaging, and consumer use, and it is also the most difficult part of carbon reduction.

In the industry's view, Chinese consumer enterprises have rarely systematically disclosed Scope 3 data in the past because of the insufficient digital foundation of the supply chain and the high statistical cost. As the international market, capital market, and large - scale channel providers raise their ESG requirements, supply - chain transparency is becoming a trend.

Alongside the carbon reduction target, Chando has also been continuously increasing its investment in intelligent manufacturing projects in recent years.

The "Chando Future Beauty City" located in Shanghai Oriental Beauty Valley was officially put into use in 2025. This project integrates distributed photovoltaics, intelligent logistics, digital twin systems, and industrial tourism functions. According to the disclosure, its 3.1 - megawatt rooftop photovoltaic project is expected to generate about 3.8 million kWh of electricity annually, with a self - consumption rate of over 95%.

In recent years, "green factories" have become a new investment direction for many consumer goods enterprises. Especially in the beauty industry, since the production process involves a large amount of packaging, logistics, and energy consumption, green manufacturing not only affects ESG indicators but also directly relates to cost control and operational efficiency.

For example, the automated warehousing and "lights - out logistics" systems are essentially both energy - saving projects and infrastructure for improving supply - chain efficiency. And digital energy management helps enterprises establish a more granular carbon - emission data system.

Compared with simply emphasizing environmental protection concepts, the current industry is more concerned about whether ESG can be transformed into R & D capabilities, supply - chain capabilities, and brand assets.

This logic is also reflected in Chando's repackaging of the "Himalayas" concept.

Over the past decade or more, the Himalayas have always been an important source of Chando's brand narrative. In recent years, it has begun to further extend this concept to biodiversity conservation and raw material R & D.

The report shows that the "Planting Grass in the Himalayas" project has restored a total of 6.66 million square meters of land and has been upgraded to the "2025 - 2030 Himalayas Biodiversity Conservation Project". At the same time, the Gentiana veitchiorum extract jointly developed by Chando and the Tibet Agricultural and Animal Husbandry University completed the national record filing for new cosmetic raw materials in 2025, becoming the first new cosmetic raw material recorded in Tibet.

Investigation of the Sejila Mountain in Chando Group's biodiversity conservation project

In the global beauty industry, "self - sufficiency in raw materials" is becoming a new focus of competition.

On the one hand, international large - scale groups are increasing their investment in patented ingredients, biological fermentation, and plant cell culture technologies; on the other hand, Chinese brands are also beginning to shift from "ingredient application" to "ingredient R & D".

Chando disclosed that its Shanghai Microbiology Laboratory has fully applied the fifth - generation intelligent biological fermentation technology, achieving self - production of core raw materials such as yeasts and lactic acid bacteria. The effective extraction rate of some patented ingredients has increased by 300%, and at the same time, production energy consumption has been reduced.

For local beauty enterprises, this means that the competition logic is changing. In the past, the industry relied on marketing investment and traffic dividends, while in the future, the importance of raw material capabilities, patent reserves, and supply - chain efficiency is increasing.

Meanwhile, green packaging and the circular economy have also become new directions in the industry.

According to the report, Chando promoted a plastic - reduction project covering 90 SKUs in 2025, including refill packs, supplementary packs, and one - time molding gradient blow - molding technology. Among them, the refill packs of the Small Purple Bottle Essence reduced the use of about 0.54 tons of virgin plastic throughout the year, and the bag - type supplementary packs reduced about 14 tons of virgin plastic in total.

This "refill pack" model has been adopted by more and more international brands. The reason is not just environmental protection, but also because it can increase the customer repurchase rate and reduce packaging and logistics costs.

In addition, Chando also mentioned that its empty bottle recycling program has attracted more than ten thousand consumers to participate and has been selected as a case of the "Waste - Free City Cell" in Shanghai.

Compared with the previous conceptual ESG expressions, Chinese consumer enterprises are now increasingly emphasizing "verifiable data" and "traceable indicators". The reason behind this is that ESG is no longer just a brand image project but is gradually affecting corporate financing, channel cooperation, internationalization, and supply - chain management.

For the Chinese beauty industry, this also means a further upgrade of the competition dimension.

When the traffic growth slows down and the industry enters a more in - depth integration stage, what enterprises compete for may no longer be just the speed of new product launches and the volume of marketing, but the R & D system, supply - chain resilience, and long - term operation capabilities.

And ESG is becoming part of these capabilities.