The main ingredients in shampoo are surfactants, chemicals which help remove the waxy oil secreted by hair follicles. Unfortunately, many of these are irritating or allergenic. In 2004 the American Contact Dermatitis Society named the surfactant cocamidopropyl betaine "Allergen of the Year" to help draw attention to these common allergens. To avoid these irritants, steer away from ammonium lauryl sulfate and sodium laureth sulfate (SLES).
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It is a common myth that sodium lauryl sulfate (SLS) causes cancer. SLS is a known irritant, but it is not a known carcinogen. The misunderstanding may stem from confusion with sodium laureth sulfate (SLES), a close relative to SLS. Surfactants with the suffix -eth may have trace contamination of 1,4-dioxane, a possible carcinogen. Even though the risk from exposure to 1,4-dioxane may be low, you can eliminate yours by looking for alternative surfactants.
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Some of the most important ingredients in hair conditioners are cationic surfactants, in particular quaternary ammonium surfactants ("quats") such as Stearalkonium Chloride and Cetrimonium Chloride. Most quats, including naturally derived ones, can irritate the skin and eyes (but are not generally considered to be skin allergens). No negative health effects have been found with quats used in conditioners, but they do tend to accumulate in the environment.
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Although natural shampoos commonly use safe, plant-derived ingredients, it is important to understand that unlike "certified organic," the term "natural" is not regulated. A "natural" label does not guarantee that a product or ingredient is mild. A more reliable way to find plant-based surfactant shampoos is to look for ingredients such as lauryl glucoside and decyl glucoside in the ingredient list.
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