Estée Lauder Cos. Hits Carbon-Neutral Milestone Amid Pandemic

The direct operations of the Estée Lauder Cos. Inc. are now carbon-neutral.

In a report released Monday, Lauder revealed it has achieved net-zero emissions in its direct operations, while sourcing 100 percent renewable energy. In the latter effort, the company has joined “RE100,” an initiative by environmental services nonprofit The Climate Group where companies commit to sourcing fully renewable energy.

“I understand that a lot of sustainability at the end of the day is good operations and efficiency,” said Nancy Mahon, senior vice president, global corporate citizenship and sustainability, at Lauder. Mahon underscored the group’s commitment to sustainability, adding: “We have had legacy programs in environmental and social. All of that is in our blood and DNA. Every business unit has an ESG component. It’s not an add-on.”

The latest milestones are a completion of the company’s 2020 climate goals revolving around its operational carbon footprint. It builds upon Lauder’s prior work with a heightened focus on renewable energy solutions. Specifically, this includes sourcing U.S.-generated wind power and installing ground-mount and rooftop on-site solar arrays at its facilities around the world. Lauder addressed remaining emissions with the purchase of carbon offsets from the Massachusetts-based Tri-City Forestry project in North America, which safeguards public forest lands from destructive timber harvesting.

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“The events of this year have only underscored the urgency and imperative of climate action and we’re committed to doing our part, collaborating with partners to tackle one of the greatest challenges of our time,” added Mahon.

The company joined the Science Based Target Initiative in July 2019. On the SBTI web site, its status reads “committed,” meaning Lauder only just set goals to halve its absolute emissions from owned operations by 2030, from a 2018 base year. The commitments are independently validated and approved by the SBTI and are in line with the ambitions of the landmark Paris Agreement.

“We committed to committing essentially. We have mapped out and sized out total scope 1 and 2 and 3 [across value chain], with the SBTI — we basically worked with them to set the target,” said Mahon, saying it is “creating a glide path” for the group’s brands, which include Estée Lauder, Clinique, Origins, MAC Cosmetics, La Mer, Bobbi Brown, Tom Ford and Too Faced, among others.

In this commitment, the company also will “reduce scope 3 emissions [indirect operations] from purchased goods and services, upstream transportation and distribution, and business travel 60 percent per unit revenue” over the same time frame. For scope 3 emissions — or where the majority of the impact lies outside its direct operations — Lauder intends to implement integrated solutions and foster joint value creation with supply chain partners and third-party manufacturers.

“The company has been in business for 75 years, consistently successful through World War II, 9/11, financial crises, recession — we do have a long-term view in terms of outcome and investment, we have a very long-term, patient capital view. We look over the longer term and we focus on the health and safety of our employees and our communities,” said Mahon. “We are very optimistic about the future. It’s clear to us that to continue to be the leading beauty prestige company, we need to lean even further into ESG and sustainability, and we really look forward to that,” reiterated Mahon.

In June, employees raised concerns about conflicting political values from its board, namely Ronald Lauder.

“We believe that transparency and goals are the best processes. We have continued to expand our disclosure, inclusion and diversity, climate journey…we have disclosed more and more information in the last four years,” began Mahon at the time, asking stakeholders to “engage with us and ask us questions — we welcome that dialogue.”

“In terms of our board and our values, we don’t have a litmus test in terms of any of our employees and governing members might have,” she said, reemphasizing the common company values. “Every community that we touch is going to be greener and have a positive environmental and social impact,” she reiterated. “It’s really a stakeholder-driven exercise.”

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