The cosmetic industry has been committed to promoting less hazardous products to reduce the environmental impacts of cosmetic ingredients. This requires identifying safer cosmetic ingredients for developing cosmetic formulations that are less harmful to the environment. However, one of the challenges in developing eco‐friendly cosmetics relies on integrating all environmental hazard (EH) information of cosmetic ingredients to select the most eco‐friendly ones (i.e., ingredients least harmful to the aquatic environment). Thus, we developed a hazard scoring tool (IARA matrix), which integrates data on biodegradation, bioaccumulation, and acute aquatic toxicity, providing a hazard index to classify cosmetic ingredients (raw materials) into categories of EH (low, moderate, high, or very high). The classification of the IARA was based on parameters established by Cradle to Cradle (C2C), the US Environmental Protection Agency (USEPA), and European Regulation 1272/2008, considering the most conservative values of each source. The Leopold matrix was employed as a model for the tool, using a numerical scale from 0 to 6 (lowest to highest EH). According to the IARA, we have successfully demonstrated that ultraviolet (UV) filter ingredients have the highest EH out of 41 cosmetic ingredients commonly used for rinse‐off products. In addition to UV filters, triclosan (bactericide) and dimethicone (emollient) presented the second‐highest EH for aquatic ecosystems, and humectants presented the lowest hazard index. By applying the IARA in the case study of rinse‐off products, we have estimated that the aquatic hazard of cosmetic products can be reduced 46% by identifying less hazardous ingredients and combining them into a cosmetic formulation. In summary, the IARA tool allows the estimation of the EH of cosmetic ingredients, provides safer products, and helps achieve sustainability for cosmetic products. Integr Environ Assess Manag 2023;00:1–17. © 2023 SETAC