The Estée Lauder Companies Releases Fiscal 2021 Social Impact and Sustainability Report

Report highlights progress towards global goals and sets new PCR and virgin plastic packaging targets

Today, The Estée Lauder Companies Inc. (NYSE: EL) (ELC) released its Fiscal Year 2021 Social Impact and Sustainability (SI&S) Report. The Beauty Inspired, Values Driven report underscores progress towards the company’s social impact and sustainability goals and commitments and highlights initiatives across key areas including inclusion, diversity, and equity; climate; packaging; social investments; responsible sourcing; and green chemistry.

In fiscal year 2021, the company remained on track to achieve its social impact and sustainability goals, while generating exceptional business results and continuing to navigate challenges related to the COVID-19 pandemic.

“Despite the pandemic, we remained steadfast in prioritizing the health and wellbeing of our employees, consumers, and communities around the world, while delivering on our long-term commitments,” said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies. “Doubling down on our social impact and sustainability strategy is an important part of our goal to continue delivering long-term value and remain the global leader of prestige beauty.”

“As The Estée Lauder Companies marks its 75th anniversary, it is important to recognize that the company’s success has long been rooted not only in its business strategy, but in a deep understanding of its core values,” said William P. Lauder, Executive Chairman, The Estée Lauder Companies. “These values, including respect for the individual, uncompromising ethics and integrity, generosity of spirit, and fearless persistence are what will accelerate our commitments into the next 75-years and beyond.”

Across the business and within its brand portfolio, the company’s achievements over the last fiscal year include progress toward the company’s Racial Equity and Gender Equality commitments, the achievement of its post-consumer recycled (PCR) material goal ahead of schedule and the setting of additional packaging targets. The company also made strong progress on its science-based targets (SBTs) for Scopes 1 and 2 and continued to make efforts towards meeting its Scope 3 SBT. Additionally, The Estée Lauder Companies Charitable Foundation (ELCCF) deepened its commitment to girls’ education and expanded its mission to include women’s advancement, and the company continued to support employees facing financial hardships due to COVID-19 through its ELC Cares Employee Relief Fund.

“In fiscal 2021, we worked hard to continue developing long-term solutions to help protect our planet, drive inclusion and equity, and put people at the heart of everything we do—all while meeting our business objectives,” said Nancy Mahon, Senior Vice President, Global Corporate Citizenship and Sustainability, The Estée Lauder Companies. “While we’ve made great progress, we know there is more collective action needed to help address ongoing and new challenges in the next decade.”

Read and download the Fiscal 2021 Social Impact & Sustainability Report on ELCompanies.com.

Highlights from the SI&S Report include:

Inclusion, Diversity and Equity

• The company continued to make progress towards its Racial Equity commitments, as announced in June 2020, and also announced a new set of commitments to Gender Equality, inclusive of achieving gender pay equity by 2023 and globally increasing representation of women from underrepresented groups across our regions and affiliates.
• In fiscal 2021, the company reported that 82 percent of its global workforce is female, and 46 percent of its U.S. workforce is Black, Indigenous, and People of Color (BIPOC). Fifty-five percent of global VP positions and above at the company are held by women and 44 percent of the Board of Directors are women.
• The company also established an Equity and Engagement Center of Excellence to drive progress towards achieving equity across the organization and develop pathways to further opportunity and advancement for all employees.

Climate & Energy

• The company was named to the CDP Climate A List in 2020, achieving a distinction reached by only the top 5 percent of the more than 5,800 companies scored. ELC was also honored with RE100’s 2021 Enterprising Leader Award, acknowledging the company’s progress and leadership in the global transition to 100% renewable electricity.
• In fiscal 2021, the company made strong progress on its Scope 1 and 2 SBT and continued to make efforts towards meeting its Scope 3 SBT.
• The company’s largest renewable energy agreement to date — a 22 MW Virtual Power Purchase Agreement for a wind farm in Oklahoma — became fully operational, generating enough clean, renewable energy to cover its entire North America operations.
• ELC expanded its renewable energy portfolio through a new, on-site solar installation in Hillmount, Canada, bringing its total solar capacity to 5.7 MW. The company generated a cumulative total of more than 5,000 MWh of solar energy in fiscal 2021, supporting both progress toward its SBTs and helping meet its facilities’ energy needs with green power.

Packaging

• The company achieved its PCR goal ahead of schedule and announced a more ambitious goal to increase the amount of PCR material in its packaging to 25 percent or more by the end of calendar year 2025.
• In addition, the company announced a new goal to reduce the amount of virgin petroleum plastic in its packaging to 50 percent or less by the end of calendar year 2030.
• In fiscal 2021, 89 percent of the company’s forest-based fiber cartons were FSC certified, increasing from 28 percent in fiscal 2019, driving progress towards its goal to have 100 percent of its forest-based fiber cartons FSC certified by the end of calendar year 2025.

Product Formulation

• In fiscal 2021, the company integrated an innovative green chemistry program into its product development process, enabling visibility into the green chemistry profile of new product launches. The company is moving quickly to advance this work, especially in light of growing consumer interest in product formulation.
• As part of the company’s goal to have all brands publish key ingredient glossaries by the end of calendar year 2025, fiscal 2021 saw an additional seven brands — Estée Lauder, M·A·C, Bobbi Brown, Bumble and bumble, Editions de Parfums Frédéric Malle, GLAMGLOW, and Smashbox — publish ingredient glossaries on their websites.

Responsible Sourcing

• To help support women who work within and around its supply chains, the company completed a successful two-year HERproject program in its packaging supply chain in fiscal 2021, in partnership with Business for Social Responsibility (BSR). As the first beauty company to sign on with the program, ELC is now expanding the program into agriculture, targeting shea, through a grant from ELCCF. The program will draw on existing HERproject curriculum modules such as gender awareness, communication skills, problem solving, financial planning, and wellness. The objective is to develop a HERproject model for the agricultural sector that may serve as a blueprint across ingredient supply chains, as well as become available to the wider beauty industry.
• In addition, in fiscal 2021, the company joined the Global Shea Alliance, a nonprofit industry association that promotes sustainability, quality practices, and standards for shea in food and cosmetics.

Social Investments

• The company’s flagship social impact programs underpin its global social investment strategy. For example:
  • Founded in 1992 by the late Evelyn H. Lauder with the launch of the iconic Pink Ribbon, The Breast Cancer Campaign (BCC) is ELC’s largest corporate social impact program. Together, BCC and ELCCF have funded more than $108 million for lifesaving global research, education, and medical services.
  • The company’s groundbreaking M·A·C VIVA GLAM campaign has raised more than $500 million since 1994 for the global fight against HIV/AIDS and its mission to support health and rights for all, with a focus on women and girls and the LGBTQIA+ community.
• In fiscal 2021, ELCCF deepened its commitment to girls’ education and expanded its mission to include women’s advancement, launching strategic partnerships with organizations such as:
  • Co-Impact: ELCCF became an inaugural donor to Co-Impact's Gender Fund with a pledge of $15 million over five years focused on achieving transformative systems change for gender equality.
  • Grantmakers for Girls of Color (G4GC): ELCCF committed to support G4GC’s Black Girl Freedom Fund, building upon the company’s existing commitment to girls’ education and racial equity with an added emphasis on reaching local groups at the intersection of race and gender.
  • Plastics for Change: ELCCF’s partnership helps to enhance livelihoods for waste collectors in India, the majority of whom are women, while diverting plastics from the ocean.
  • The Young Women’s Leadership Schools (TYWLS): A longtime partner with the Student Leadership Network’s TYWLS program, in fiscal 2021, ELCCF increased its longstanding support to include all TYWLS New York City schools serving girls in high school.

Employee Experience

• To support members of its global family facing financial hardships due to COVID-19, the ELC Cares Employee Relief Fund awarded more than 13,700 grants and distributed more than $7.9 million through June 30, 2021 to employees worldwide.
• Through the globalization of ELC Good Works, the company’s charitable matching gifts and volunteerism platform, employees created and signed up for volunteer activities as well as requested to have their donations and volunteer hours matched by the company. In fiscal 2021, $2.9 million was collectively donated to more than 3,500 nonprofits on the platform in 19 markets globally.
• The company received 68 National Safety Council Awards in three categories, across 36 supply chain and R&D facilities and 14 global brand operations, with some facilities receiving multiple awards.

About The Estée Lauder Companies Inc.

The Estée Lauder Companies Inc. is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The company’s products are sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, Tommy Hilfiger, M·A·C, La Mer, Bobbi Brown, Donna Karan New York, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin Paris, TOM FORD BEAUTY, Smashbox, Ermenegildo Zegna, AERIN, Le Labo, Editions de Parfums Frédéric Malle, GLAMGLOW, KILIAN PARIS, Too Faced and Dr. Jart+, and the DECIEM family of brands, including The Ordinary and NIOD.

CAUTIONARY NOTE

This press release and the related Social Impact and Sustainability Report (the “report”) contain information about our social impact and sustainability goals, targets, initiatives, commitments, and activities. These efforts involve certain risks and uncertainties, such as changes in our business (e.g., acquisitions, divestitures, or new manufacturing or distribution locations), the standards by which achievement is measured, the assumptions underlying a particular goal, and our ability to accurately report particular information. This press release and the report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our social impact and sustainability goals, targets, initiatives, commitments, and activities, as well as our future operations and long-term strategy. Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our business and operations, we cannot assure that actual results or outcomes will not differ materially from any future results or outcomes expressed or implied by such forward-looking statements. Forward-looking statements include all statements that do not relate solely to historical or current facts and involve a number of known and unknown risks, uncertainties, and other important factors such as those described in the report and in our recent SEC filings including in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 and in our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We assume no responsibility to update the information contained in this press release or the report or to continue to disclose any information.

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