The Estée Lauder Cos. is outlining the framework for its next step into sustainability.
While the group's brands have long had sustainability and corporate citizenship initiatives — MAC, for example, with recycling packaging at its stores and the MAC AIDS Fund — Lauder is now looking to integrate those ideals more fully into its corporate structure. The concept was outlined Wednesday by president and chief executive officer Fabrizio Freda, and underscored by executive chairman William Lauder and chief financial officer Tracey Travis.
"It also involves discussions… what does luxury look like, how does it show up and how do you balance the notion of luxury with the notion of being environmentally responsible," said Nancy Mahon, senior vice president for global corporate citizenship and sustainability at Lauder. "What consumers are saying is, 'We want to do both.'"
As part of Lauder's expanded initiatives, the company will look into its supply chains to identify and create action plans around sensitive ingredients, like palm oil; extend its net zero carbon emissions commitment across all aspects of the company, and commit to having between 75 percent and 100 percent recyclable, refillable, reusable, recycled or recoverable packaging by 2025. The business also plans to use responsibly sourced paper products with a goal toward having all forest-based fiber cartons certified by 2025.
To address ingredient transparency, Lauder intends to develop an online glossary of all key ingredients with descriptions by 2025. The group also plans to train employees worldwide on sustainability and corporate social impact, and by 2025, the company plans to have half of its employees engaged in volunteer programs. Each Lauder brand will focus on and support at least one environmental or social cause by 2025, the company said.
"As we look toward reaching those goals, we're looking also to drive value in our brands," Mahon said, stressing that sustainability, corporate social responsibility, and business can go hand in hand. "What we're doing now is we're looking across all of our energy use…trying to find local green solutions in the markets where we're operating…it includes everything from car fleet to packaging."
Where things like MAC's recycling program have primarily been spread via word of mouth, it's likely Lauder will start to communicate more directly about sustainability initiatives going forward. " not only how do we at MAC reduce our carbon footprint by running Back to MAC, but how does the consumer reduce her footprint?" Mahon said.
With the new sustainability framework, Lauder is looking to effect broader industry change — including the kind that comes by working toward the same sustainability goals as other, competing, beauty companies.
"We've a very big beauty company, so if we go to a vendor and say, 'We want to buy a glass jar instead of plastic jars,' we bring scale," Mahon said. "We can all work together to get scale and lower the price of sustainable packaging and increase the availability of vendors and make low environmental impact one of the qualifiers for suppliers."
"We are striving to make important environmental progress," Lauder said during his closing remarks at the company's first Investor Day in 12 years. Held at the Conrad Hotel in Manhattan, Wall Street analysts were introduced to the sustainability initiative, but also given more in-depth information on Lauder's brands, markets and forward-looking growth strategies.
"Our focus is on fewer, bigger, faster innovations," Freda said.
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