Hong Kong
Climate and Environment
Climate and Environment
Our deep commitment to environmental sustainability is one way we demonstrate our focus on long-term sustainable growth. Our company aims to minimize environmental impacts by setting targets to reduce direct and indirect emissions, creating more sustainable building practices, sending zero waste to landfill at our facilities and improving water efficiency. Our environmental targets position us well to succeed in a changing global economy while advancing the health and beauty of the planet. We will continue to approach environmental management with a spirit of agility and collaboration and plan to further expand on initiatives in this space.
Climate Action
We celebrated several important milestones across our environmental priorities in fiscal 2020. In the fight against climate change, we achieved carbon neutrality and sourced 100% renewable electricity for our direct operations.
We also established Science Based Targets (SBTs) to reduce greenhouse gases (GHGs), which were validated by the Science Based Targets Initiative (SBTi) in 2020. SBTs are GHG emissions reduction targets adopted by companies and developed using the latest climate science. SBTs must be in line with the scale of reductions required to limit global warming to well-below two degrees Celsius above pre-industrial levels. Our SBTs are aligned with the 1.5 degrees pathway as classified by the SBTi.1 These new targets reflect our commitment to reducing our carbon footprint, holding us accountable to external standards, corporate peers and government partners. They are to:
- Reduce absolute Scope 1 and 2 GHG emissions 50% by 2030 from a 2018 base year.
- Reduce Scope 3 GHG emissions from purchased goods and services, upstream transportation and distribution and business travel by 60% per unit revenue over the same timeframe.
In fiscal 2022, we announced a new goal to transition 100% of our global corporate vehicle fleet to electric by the end of calendar year 2030. Setting this goal allowed us to become the first company in prestige beauty to join the Climate Group’s EV100 initiative, which brings together companies who are committed to accelerating the transition to electric vehicles.
1Our Scope 1 and 2 targets are aligned with a 1.5°C pathway, the most ambitious goal of the Paris Agreement. As of the publication of this report, the SBTi does not classify Scope 3 target ambition. That said, our Scope 3 target, for emissions from our value chain, meets the SBTi’s criteria for ambitious value chain goals and is in line with current best practice.
Strategy
The leading component of our climate-related strategy is the pursuit of energy efficiency and on-site/off-site renewable energy. These initiatives can reduce the risks associated with regulations that increase the cost of energy and can drive strategic advantage by reducing operating costs.
We have adopted a portfolio approach to reducing GHGs, which includes the use of on-site renewables, a Virtual Power Purchase Agreement (VPPA) for wind energy, energy efficiency projects, green utility contracts and renewable energy credits. In support of our 2020 carbon neutrality goal, we established an annual dedicated capital fund to support low-carbon sustainability initiatives. We strive to invest in technologies that have the potential to positively impact the planet while meeting our business objectives.
To read more about our climate action strategy, download our 2022 Climate Transition Plan.
Energy Efficiency
We track environmental performance at our facilities and have processes in place to collect energy metrics. We use this data to measure the effectiveness of energy-saving activities, which include energy-reduction projects such as lighting retrofits, air flow and temperature management systems, occupancy sensors and equipment upgrades to decrease overall energy use and carbon emissions.
In fiscal 2020, we joined the U.S. Department of Energy’s Better Plants program, a voluntary partnership meant to improve energy efficiency across industrial companies. The Better Plants program provides technical assistance, in-plant and online training, and energy-saving resources such as energy audits and diagnostic equipment lending programs.
Governance
Our climate-related initiatives are governed by our Climate Action Steering Committee, which is composed of senior leaders who are members of our executive team. Established in 2021, the Climate Action Steering Committee drives our emissions-reduction strategy and governs financial decision-making related to achieving our Science Based Targets, as well as maintaining our Net Zero and RE100 goals. This governance body is an evolution of our Net Zero Steering Committee, which was established in 2017 to achieve Net Zero carbon emissions by 2020.
Risk Management
For more than 10 years, we have responded to the annual CDP Climate Questionnaire. We are proud to have achieved the highest score of A for our 2021 climate change disclosure. To read more about how we are combating climate change, please download our 2022 CDP Climate Change Disclosure.
CDP Climate Response
For more than 10 years, we have responded to the annual CDP Climate Questionnaire. We achieved a score of B for our 2022 climate change disclosure. To read more about how we are combating climate change, please download our 2022 CDP Climate Change Disclosure.
Sustainable Building Operations
We are optimizing our office buildings and retail stores in order to reduce their environmental impact. Although many of these facilities are leased, we are committed to working with our landlords and internal teams to drive sustainability practices in green buildings.
In fiscal year 2020, we finalized our Green Building Standards for New Construction and Major Renovations. These standards set the baseline for the sustainability practices for our spaces, covering impact areas including energy, water, waste and indoor air quality. We have also developed sustainability best practices for our existing and retail spaces, which are focused on driving sustainable behaviors and choices in these spaces. Our strategy also involves pursuing LEED and WELL certification at key sites across our portfolio.
Waste
We achieved zero industrial waste-to-landfill for 100% of our global manufacturing, distribution and innovation sites. In fiscal year 2020, we focused on working with our global sites to identify sustainable waste solutions and ensure procedures and documentation for our zero industrial waste-to-landfill commitment are in place. Going forward, we will continue to maintain this commitment status and onboard new facilities.
Since fiscal 2003, we have had a zero-waste-to-landfill commitment for our manufacturing and distribution sites in the United States, Canada, United Kingdom, Belgium and Switzerland. If waste cannot be reused or recycled, it is converted to energy by licensed power plants or by co-processing at cement kilns.
Our facilities follow the waste-minimization hierarchy—reduce, reuse and recycle—and look for opportunities to share best practices. We are also working with a waste management services company in North America to help us optimize waste streams and find new opportunities for recycling and waste reduction within our supply chain and retail stores. We plan to utilize this approach to continuously improve our waste management practices around the world.
Water
We use water as an ingredient to make our products, as well as for cleaning and cooling manufacturing equipment. In addition, our Research and Development and Quality teams rely on water to perform testing, analysis and to develop new products. Our new green building standards have water requirement standards that all new facilities must meet, such as the installation of low-flow fixtures. In addition, for our sites pursuing LEED certification, indoor and outdoor water use reduction is required.
We have water-savings initiatives in place, where possible. We pay close attention to facilities in water-stressed areas, implementing additional measures to ensure we manage our supply and water use responsibly.
We also look to improve existing systems throughout our organization in order to increase water efficiency. For example, in fiscal 2020, we upgraded the water softening system at our Blaine, Minnesota, facility, which is expected to result in a reduction of more than 600,000 gallons of water used each year.
CDP Water Response
We recognize that the solutions and risks around climate change and water security are inextricably linked and interdependent. We are proud to respond to the annual CDP Water Security Questionnaire and achieve a score of A for our 2022 response. To read more about how we are taking steps to improve our water stewardship practices, please download our 2022 CDP Water Response.
