9 LEADERSHIP LETTERS ADVANCING ON OUR COMMITMENTS Racial Equity and Gender Equality As the world continues to reckon with social and racial injustices, our global ELC family came together to develop a set of commitments to Racial Equity, as announced in June 2020. We also outlined a new set of commitments to Gender Equality, inclusive of achieving gender pay equity and globally increasing representation of women from underrepresented groups in our workforce. These efforts lay the foundation not only for a culture of equity and inclusion within our own walls, but also help contribute to advancing equity globally by adding our voice to the dialogue. With an 82% female workforce globally, 55% of global VP and above positions held by women, and 46% of our U.S. workforce representing employees who are Black, Indigenous, and People of Color (BIPOC), we are proud of the steps we have taken on this journey. We recognize, however, that we have more work to do in order to accomplish greater results. Climate Action We continued to facilitate the transition to a low-carbon economy and are proud to have joined CDP’s 2020 Climate A List, with the highest score of A. For the second year in a row, we achieved Net Zero Scope 1 and Scope 2 emissions and sourced 100% renewable electricity globally for our direct operations. After establishing our science based targets (SBTs) for reducing Scope 1, 2, and 3 greenhouse gas (GHG) emissions last year, we are working to meet these important goals by the end of fiscal 2030. In fiscal 2021, we made strong progress on our Scope 1 and 2 SBTs and continued to expand our efforts towards meeting our Scope 3 SBT. Our 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 our entire North America operations. We also expanded our growing renewable energy portfolio with a new on-site solar installation in Hillmount, Canada, bringing our total solar capacity to 5.7 MW. We generated a cumulative total of more than 5,000 MWh of solar energy in fiscal 2021, supporting both progress toward our SBTs and helping meet our facilities’ energy needs with green power. Packaging We aspire to lead the prestige beauty industry in developing more responsible packaging solutions for our consumers and to help drive innovation toward the goal of a circular plastic economy. We have made great strides to increase the amount of post-consumer recycled (PCR) material in our packaging. In fiscal 2021, we achieved our 2025 PCR goal years ahead of schedule, reaching 15% PCR material in our packaging. We have now established a new, more ambitious target for PCR: By 2025, we will increase the amount of PCR material in our packaging to 25% or more. And, recognizing the increasing need to address the use of virgin plastic, we have set a goal to reduce the amount of virgin petroleum plastic in our packaging to 50% or less by 2030. We are especially grateful to our employees’ agility, focus, and persistence in helping drive progress on our sustainability and social impact goals and inclusion, diversity, and equity commitments, all while caring for each other, their families, and our company with compassion, creativity, and resolve. From the start of the COVID-19 pandemic, we adjusted our operations and developed global protocols to protect the health and safety of our people and our consumers. For example, across the globe, our employees used more than five million masks to protect themselves and others while working on-site. In addition, we dedicated our annual Mental Health Awareness Month in May 2021 to highlight initiatives to help our employees balance work-life and overall well-being. We also provided expanded benefits to provide support during critical times and assistance with everyday life challenges.