64 SUSTAINABILITY CLIMATE AND ENVIRONMENT VALUE CHAIN (SCOPE 3 EMISSIONS) We recognize that a significant portion of our climate impact extends beyond the boundaries of our own operations. We are taking steps to understand and manage these impacts. CDP Supply Chain CDP is a nonprofit that runs a global disclosure reporting system to provide information to investors about companies’ environmental impacts. CDP also enables companies to track the impacts of their suppliers through a supply chain-specific questionnaire. In fiscal 2021, we joined CDP Supply Chain and requested that more than 200 suppliers respond to the CDP Climate questionnaire. Collectively, these suppliers represent a significant amount of our total spend. We will use this supplier-provided data to help us calculate a portion of our Scope 3 footprint. In addition, we plan to use our suppliers’ responses to identify potential areas of opportunity and collaboration. Reducing Emissions From Our Online Business Our products are sold globally through our own websites, third-party platforms, and websites of our retailers. In the past two fiscal years, our online business * has nearly doubled, and we have continued to invest to support this growth. We have also strengthened and refocused our online sustainability strategy. One of the pillars of the strategy is emission reductions from transportation for direct-to-consumer sales made on our brand sites and third-party platforms. In fiscal 2021, Aveda launched carbon-neutral shipping in the United States, procuring enough carbon emissions offset credits to cover online delivery emissions to consumers. This project built on the success of the fiscal 2020 pilot, which offset shipping during Earth Month. Taking the program global, Aveda launched carbon-neutral shipping in Belgium and the Netherlands in the fourth quarter of fiscal 2021. Travel Retail Sustainability Goals In fiscal 2021, we announced sustainability goals specific to our Travel Retail business. Travel Retail, which covers the world of duty-free environments including airports, downtown locations, airlines, cruises, and border shops, is one of our highest growth channels and touches more than 1 billion consumers a year. In line with our company-wide sustainability goals, we identified emissions, waste, and energy as key priorities for Travel Retail based on industry need and potential impact. For example, by eliminating film-wrapping from the packaging of Travel Retail Exclusive Sets, we can avoid 54,000 kilograms (kg) of plastic waste—the equivalent of eliminating nearly 5.4 million 500 milliliters (ml) of plastic water bottles (based on fiscal 2020 sales volumes). We are already making progress toward Travel Retail packaging and store design goals. In store design, the Estée Lauder, La Mer, and M·A·C counters at Hyundai COEX in Seoul, Korea, were built with, on average, 80% reused display fixtures, reducing waste and environmental impact while maintaining brand equity. Read more about our Travel Retail goals. AWARD-WINNING SUSTAINABLE BEAUTY In fiscal 2021, Aveda was recognized by Elle Magazine for its carbon-neutral shipping program, receiving a Green Beauty Star Award. The Green Beauty Star Awards honor companies, products, programs, and people innovating for a cleaner, greener, more sustainable beauty industry. *Online sales discussed throughout includes sales of our products from our websites and third-party platforms, as well as estimated sales of our products sold through our retailers’ websites.