Is Your Business Ready for Mandatory Product Transparency?

5 Lessons from Regulatory Executives at Nestle, Beiersdorf and Unilever

Recently I had the honor of facilitating a panel discussion with regulatory leaders Horst Wenck, Arun Mishra, and John Athanatos, talking about the seismic shifts in Consumer Products regulation and how their companies are responding to maintain regulatory excellence. They spoke to how the modern regulatory organization is no longer a compliance entity that polices the business, but rather a diagnostician and doctor that helps maintain and maximize business health.  

For me there were five key lessons that are relevant not only for their regulatory affairs peers, but for all business leaders in Consumer Products enterprises:

1. We face a regulatory tsunami
2. The scientific foundations of product assessment are under attack
3. It’s not just regulatory, the entire business needs replumbing
4. The community has opportunity to work together better
5. Regulatory professionals need hybrid skills

There is a bewildering combination of regulatory actions, sources and intentions. Nestle’s Athanatos identified three fundamental drivers:

Issues are more complex and broadening. Factors include sustainability considerations, as well as technologies and products that cross multiple regulatory frameworks blurring the lines.

Regulations are fragmenting. While consumers and industry would benefit from global regulatory harmonization the opposite is occurring as regions, countries, localities, NGOs, retailers and other stakeholders all develop and implement frameworks and requirements independently and with differing objectives. As Mishra noted “from a cosmetic regulatory framework point of view, 70% of the world population is going through substantial reform, as we speak” driven by CSAR in China, the EU Green Deal, MoCRA in the USA and other regulations being implemented around the globe.

Activism is increasing. Whether it’s concerns around obesity, processed foods, cosmetic safety, sustainability or other factors, as Wenck notes “you need to tease apart what is fact based and science based and then what is maybe passion or emotion based”.

There is a real risk of throwing the baby out with the bath water. Athanos notes that people want to identify one culprit or single cause” and that the “ultra processed food movement is an existential threat to the industry.” In a similar vein concerns were raised around the EU Green Deal proposal for Hazard Based Assessments, a fundamental departure from the standard of Risk based Assessment. Wenck sagaciously noted “500 years ago, Paracelsus died and he said the dose makes the toxin.”     

We are moving from “voluntary transparency to mandatory transparency” and “data that is end to end,” noted Mishra. Citing the Digital Product Passport requirement within the EU Green Deal, each household becomes “a glass house, all cupboards and toilets will be seen and validated and audited by third party(s).” Athanos reinforced the view with the drive to “democratization of data information to consumers.”  To be able to design for sustainability and compliance and provide consumer transparency, businesses will need to integrate regulatory facts, insights and foresights from the genesis of product strategy and development all the way to marketing and supply chain execution.

Wenck said “we need to work on one agenda, I’m pushing in that direction,” noting that industry players are often not aligned and can be driven by short term thinking. Athanos sees an opportunity for the regulators to play a stronger role both in educating consumers on regulations and in helping the industry to counteract the increased prevalence and danger of misinformation. 

The modern regulatory professional needs to be a “scientist, public affairs person and lawyer” all in one said Athanos. In addition to scientific skills there is a need for strong soft skills and strategy skills. As Wenck notes the challenge is evolving beyond flawless execution to insightful guidance to businesses and proactive influencing of evolving regulations.

As said by Mishra, the modern Regulatory Affairs is a true business partner, evolving from “police to doctor diagnostics” where “business is not scared of you when you go to their desk, they buy a drink for you.”