Letter From William P. Lauder & Fabrizio Freda

Dear Stakeholders,

In fiscal 2023, The Estée Lauder Companies continued to act on our values and to live our purpose: to put the power of possibility in the palm of every hand. We recognise that our role as a global company is to be responsible not only for our business, but to seek opportunities for our innovation, operations, and partnerships to go beyond our company, and have global impact. Our commitments to social impact and sustainability help guide us, while our passionate and engaged global employees strive to move the needle on what is possible for our consumers, our communities and partners and ourselves.

Our Consumer

Our aim is to meet and exceed the expectations of our global consumers at various touchpoints by creatively and strategically incorporating social impact and sustainability through various channels with beloved products and innovation and our signature high-touch approach to services and engagement.

We have continued to place focus across formulation, development, sustainability and packaging of our products. An important example of this is our commitment to ingredient transparency, demonstrated through the ways we are enabling consumers to learn more about key ingredients in the products they love, the reasons behind the uses of those ingredients and their benefits. We have published ingredient glossaries online on many of our brand websites.

This fiscal year also marked the launch of our Responsible Store Design programme, which provides our marketing and commercial teams with a framework for evaluating the sustainability profiles of new stores, existing retail stores and visual merchandising

Supplier diversity also remained top of mind this fiscal year, as we made efforts to support businesses owned by Black, Indigenous, People of Colour (BIPOC), women, the LGBTQIA+ community, veterans and people with disabilities, among other populations. Through these updated procurement practices, we strive to help drive economic development and growth of diverse and small businesses in the supplier base.

To foster supply chain leadership for the future, we have invested in programmes such as the recently launched partnership with Bucks County Community College, which is located near our Bristol, Pennsylvania, manufacturing and distribution facility. This partnership enables local students with expressed interest in supply chain to complete their two-year Associates degree, while obtaining experiential learning opportunities and gaining real-world insights into supply chain, manufacturing and distribution operations.

Our Culture

As we continue to build the next generation of leaders, we have focused on the development of programmes designed to grow and enrich our employees, develop and cultivate a skillset for sustainability innovation, and create value and long-term growth for our company.

The ELC Learning Hub grew this year, offering more than 30,000 interactive online learning experiences for employees globally, across office, retail and manufacturing locations. ELC Grow, our internal talent marketplace, expanded to new markets, continuing to offer corporate employees the opportunity to develop their careers through short-term projects, internal networking and open positions, while offering added capability to the business and building our talent pipeline.

Additionally, engaging our employees in community-focused initiatives, particularly around topics close to their hearts is a point of pride. Our hallmark volunteerism programme, ELC Good Works, expanded to 12 additional international markets this fiscal year, making the initiative available in 31 markets globally. In celebration of this expansion, we launched our first ELC Good Works Purpose Week in fiscal 2023. This five-day series of global education, engagement and volunteering opportunities empowered employees to drive positive change in communities where we live, work and source. ELC Good Works Purpose Week also included the relaunch of the Leonard A. Lauder Impact Awards, to celebrate and honour employees’ volunteerism and commitment to our communities outside of the office.

Our Employee Resource Groups (ERGs) continue to encourage cross-cultural understanding and collaboration that feeds into our business and drives our culture. In addition to growth and development as well as volunteerism initiatives, fiscal 2023 presented employees with further opportunities to connect and celebrate our culture of belonging. In fiscal 2023, we saw the US launch of the Middle Eastern North African ERG and continued to see increased participation in and expansion of existing ERGs, with 46 active ERGs worldwide in 35 countries and membership of more than 7,500 employees globally.

A Beautiful Future

The exceptional work you will see in the pages of this report is a testament to the passion and dedication of our global employees and partners. We are deeply grateful for their unwavering commitment to driving our company forward. As we look to the future, we have great hope and excitement for what is to come. Prestige beauty has proven to be, and continues to be, one of the most attractive and fastest-growing consumer sectors. This, paired with our dynamic workforce, strong leadership, and coveted brand portfolio gives us confidence for an exciting and beautiful future together.