71 SUSTAINABILITY RESPONSIBLE SOURCING SOURCING KEY INGREDIENTS We develop our products from a diverse portfolio of ingredients. We manage our portfolio thoughtfully with respect to the social, environmental, and economic implications of our sourcing. We use more than 4,000 ingredients in manufacturing our products. We have a process to identify and prioritize sensitive ingredients for which we believe it would be beneficial to develop biodiversity or social action plans. A sample of the ingredients for which we have developed actions plans include Australian sandalwood, mica, palm, shea and vanilla. While the biodiversity and social action plans vary depending on the ingredient, examples of actions we are taking include, but are not limited to: SUPPORTING WOMEN IN THE SUPPLY CHAIN In fiscal 2021, we completed a two-year program as part of the HERproject to strengthen and improve conditions for female workers at two of our packaging suppliers in China. The program included training sessions and workplace interventions that targeted health and gender equality goals. As part of the program, 2,000 individuals were trained, including 1,500 women and 68 peer educators. At the close, participants were surveyed to measure impact of the program. Results showed increased awareness of key health issues and health behavior, including recognizing adverse pregnancy symptoms and understanding the importance of regular self-examination for breast cancer. Participants also showed an increase in positive attitudes towards gender equality issues such as equal delegation of household chores. Self-esteem and confidence in communication also improved, which is beneficial for both the individual employee and for the performance of the whole factory. We are currently assessing additional suppliers to determine where we can implement similar manufacturing-based programs. “We think all women would enjoy being part of this program. It’s beneficial from a health perspective and the activities enrich the workplace experience.” –HERproject participant Consolidating spend with strategic suppliers who promote best practices regarding biodiversity preservation and social impact programs Piloting proof-of- concept projects to address traceability (e.g., blockchain) while evaluating opportunities to scale up these projects for greater impact Implementing projects to positively impact sourcing communities (addressing social, environmental, and market challenges) Exploring certification options and other applicable third-party schemes for relevant ingredients Leveraging EcoVadis to continue to enable suppliers to improve their performance
Estee Lauder Companies Sustainability Report Page 71 Page 73