This derivative of glutamic acid (an amino acid) is very hygroscopic, meaning it absorbs large quantities of water. A relatively simple molecule, it is naturally produced by our bodies and one of the components of "natural moisturizing factor", which our skin produces to slow down water loss to the environment.
Its full name is sodium-2-pyrrolidone carboxylate, leading to the nickname Sodium PCA. The moisturizing effect is typically utilized in skin care, but the same effect can be beneficial to the hair and scalp.