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Estée Lauder at 75: Inside Estée Lauder’s Investments Into Company Culture

Executives at the conglomerate detail progress it is making toward racial and gender equity, as well as its sustainability efforts.

The Estée Lauder Cos. is investing in company culture.

Much change is underway in terms of social and environmental impact, leaders at the conglomerate say, with equity, in terms of race and gender, and sustainability as top priorities.

Nancy Mahon, senior vice president, global corporate citizenship and sustainability — and one of five Lauder executives who spoke to Beauty Inc for this story — said the aforementioned priorities stem from what is deemed most important to the company’s stakeholders, who she identified as “employees, consumers, investors, as well as the communities where we live, work and source.”

“The areas of beauty companies they feel are the most important are, one, making a positive social impact in the world, but also ensuring that we make a positive environmental impact,” Mahon said.

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Marilu Marshall, senior vice president, executive management and chief inclusion, diversity and equity officer, said that Lauder’s focus on inclusivity, diversity and equity, in that order, is not “a new thing.”

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“It’s not something that we just started doing because it’s politically correct or because we had a PR mishap. It’s something that is a focal point and has been for quite some time,” said Marshall, who became Lauder’s first chief diversity officer in 2005.

Lauder Women's Leadership
Lauder’s top female leaders have been instrumental in creating avenues for women to advance.

Last summer, after releasing statistics illustrating the racial makeup of its employee base, Lauder publicly committed to hiring more Black employees across all levels of its business over the next five years in an attempt to reach U.S. population parity of 13 percent. In March of this year, Lauder established an Equity and Engagement Center of Excellence, led by Nicole Monson, senior vice president, equity and engagement.

In February of this year, the company established a mentorship-sponsorship program called From Every Chair.

“The program invited all executive-director-level-and-below Black employees to apply to be matched with senior-level employees in the company for mentorship and sponsorship,” Monson said. “It’s helping our employees, but it’s also helping our leaders become a bit more empathetic and invested in the Black talent that we have.”

Monson is helping Lauder evolve its recruitment strategy, too. The company, which has recruited from historically Black colleges and universities for years, recently established a partnership with Howard University meant to “build a pipeline and recruit alumni to be interested in the beauty space,” Monson said.

“The program entails some experiential learning, there are focus groups and town halls and things like that that we’ve been doing to introduce this population to Estée Lauder and the beauty industry,” she said.

Lauder has also strengthened existing partnerships with the Executive Leadership Council and the National Black MBA Association. As of June 2021, 9.2 percent of new positions at Lauder have been filled by Black candidates — a 3 percent year-over-year increase.

Coupled with recruitment efforts is Lauder’s focus on retention — specifically, creating an environment that supports and creates growth avenues for Black talent.

“Involved in that is being able to have conversations with managers, leaders about career goals and aspirations, and then making sure that we are creating the right kinds of processes to ensure that it gets actioned,” Monson said.

As part of the From Every Chair program, Lauder assembled a council that asked each sponsee about their career goals in order to match them “where there are actually opportunities,” Monson said.

“We’re trying to be deliberate and intentional in a way that, quite frankly, I don’t think we were before, and requiring leaders to give real feedback and manage expectations of employees in terms of opportunities that are available,” she said.

Lauder’s efforts extend beyond its walls, as well. The company has hired someone to focus specifically on increasing supplier diversity — an effort that has already seen results.

“As of Q3, we had purchased in excess of $175 million in goods and services from small and diverse-owned suppliers,” Monson said.

Lauder employees have made more than 4,000 donations to racial equity nonprofits through the company’s Good Work Program. Those donations have amounted to about $3 million, including company matches, according to Monson.

MAC Viva Glam
Giving back is a key component of Lauder’s culture. MAC has raised over $500 million for AIDS-related research through programs like Viva Glam.

About 94 percent of Lauder’s corporate and field U.S. employees have completed its unconscious bias training. The workshop originally launched in the U.S. five years ago as an optional course. It has since become mandatory and has launched internationally in the U.K.

“We’ve implemented a tool, called Inclusive Leadership Behaviors, and a structured interview guide to help with the learning and eliminating unconscious bias in our processes,” Monson said, adding that there are 35 global workshops specifically focused on race and microaggressions available.

Lauder typically hosts an in-person ID&E week, which became a virtual event this year due to COVID-19. More than 7,500 employees from 60 countries participated this year, with each region producing its own event.

“That would have never happened if we were doing things in person,” said Marshall, Lauder’s chief inclusion, diversity and equity officer. “The racial equity commitments that we entered into last June have become very much a part of all of our programming, as well as the focus for the new Equity and Engagement Center of Excellence.”

Marilu Marshall
Marilu Marshall Mark Mann/WWD

In June, MAC Cosmetics shared an update regarding the racial makeup of its employee base with Sharon Chuter’s Pull Up For Change campaign. The most notable changes were the increase in the number of Black employees at the director-level and above from 4.5 percent to 7.1 percent, and the increase in the number of Black employees at vice president-level and above from 3.1 percent to 8.7 percent.

“In a year, it’s quite a change,” said Drew Elliott, global creative director, MAC Cosmetics. “Our goal inside of advancing our Black leaders is to bring on the right talent, and to be transparent.”

MAC has committed $250,000 in donations to nonprofits fighting for racial justice and inclusivity. The brand has strengthened its support of Women of Color on Broadway, which aims to increase network and career opportunities for women of African, Latin, Asian and Indigenous descent.

MAC’s Black makeup artists formed the Melanin Beauty Collective, whose goal is to “make sure that young makeup artists or young talent have a place where they feel they’re represented,” Elliott said.

As creative director, Elliott has committed to taking “a much closer look at who is behind the scenes” of MAC’s creative campaigns.

“Making sure we had representation, not just in our hair stylists or makeup artists, but any of the agencies, any of the crew, to make sure that we were including Black voices and talent,” he said.

He has been consulting June Ambrose, an award-winning stylist who is responsible for some of popular culture’s most celebrated fashion moments, in a “creative adviser” capacity, he said.

“Having [Ambrose] bring to life the things that we can and should do, and think about it in a dimensional way has been extremely helpful for me, and also for our teams to start digging into how do we not just do what’s expected, but how do we take it beyond that,” Elliott said.

MAC continues to expand the shade range of its Studio Fix pillar, which currently counts 68 shades.

Company-wide, Lauder has rethought much of its collective commitment to racial equity over the past year. Simultaneously, progress is being made in terms of gender equity.

Sara Moss
Sara Moss Mark Mann/WWD

Sara Moss, vice chairman, has been leading Lauder’s efforts in crafting a women’s advancement gender equality strategy, which the company introduced for the first time this year.

“What it means for us is ensuring that women in our company have equal access to leadership positions, that they’re developed as leaders,” Moss said. “We have women in positions of leadership — more than parity — all the way up through vice presidents. We’re close to parity throughout the company. Parity on our board, we’re one away at this point.”

Moss was Lauder’s general counsel prior to being promoted to vice chairman. New York University’s School of Law named a women’s leadership training program after Moss, who graduated in 1974.

Some of Lauder’s partners in supporting gender equity are The Bill & Melinda Gates Foundation; Karlie Kloss’ Kode With Klossy camp; and the United Nations, whom Lauder joined in July for the Generation Equality Forum in Paris.

Lauder has committed $5 million in grants to global efforts that support women and girls’ education. It has also expanded its child care and elder care support for employees in light of the pandemic, which has disproportionately impacted women.

“Flexible work arrangements and a recognition of the additional burdens that women have had and will have going forward is built into our back-to-work program,” Moss said.

Inspired by training she received as a young lawyer, Moss spearheaded Lauder’s Open Doors Program, a one-week training, trademarked by Moss, meant to develop leadership skills in women. It was originally slated to launch in-person in July 2020, but was remade for online when the pandemic hit.

“We launched the pilot in July of 2020 with 20 women from the global supply chain at the director-level — high-performing, high-potential women,” Moss said. “[There are] individual coaching exercises, small groups, great outside facilitators. Fabrizio [Freda], William [Lauder] came. We did it for three-and-a-half hours in the morning, and then we usually had something short at the end of the day. I don’t know about you, but living on Zoom makes your head explode.”

One year later, more than half of the women who participated in the pilot have been promoted or taken on stretch assignments, Moss said. She is now preparing to scale the program with an interactive collection of online courses called The Open Doors Collection.

Last but not least are Lauder’s sustainability efforts. The conglomerate committed in 2017 to ensuring all of its electricity would come from renewable energy. It also said that by 2020, it would achieve a net zero usage of green energy.

Lauder Solar Farm
A solar farm at Lauder’s Melville, N.Y., factory.

“About half of our electrical footprint is actually in the United States,” Mahon, senior vice president, global corporate citizenship and sustainability, said.

Lauder has been investing in on-site solar energy for brands such as Aveda. It is also focused on creating sustainable products. Mahon said the company has created scorecards for all of its brands’ hero products “for everything from how the ingredients are sourced to the packaging itself.”

“We’ve spent a lot of time focusing on what we call responsible sourcing, which is how the ingredients are sourced from the communities where they grow, or harvested so that those communities thrive, as well as that the ingredients are regenerative.”

Beauty Inc previously reported on Aveda employing blockchain to track its Madagascan vanilla ingredient throughout the supply chain.

Lauder is ultimately focused on ensuring sustainability is “horizontally integrated into every aspect of the business,” Mahon said.

“It shouldn’t be a vertical in a company,” she said. “Sustainable practice really is part of the cost of business, it’s part of the business team and it’s part of the cost of goods. It’s not as if sustainability is an extra cost. It is a piece of the product value as we move forward.”