AN ENVIRONMENT OF BEAUTY

As citizens of the Earth, we are also its stewards. We embrace our responsibility for preserving the environment by using resources wisely, replenishing them where possible and protecting our planet's potential to support and nurture future generations.

PRINCIPLES AND POLICIES

• To minimize our impact on the environment, we are committed to preventing pollution and minimizing waste through the respectful development, production and distribution of our products.
• In fact as well as in principle, we provide safe, clean, healthy workplaces for our employees throughout the world. We comply with the letter and the spirit of local workplace safety regulations and exceed them wherever possible.
• We cultivate in our employees a profound consciousness of every individual's role in carrying out the Company's environmental policies, and we encourage them to volunteer personally for programs that promote an improved environment.

When it comes to our impact on the communities we touch, we use the same standards of excellence to examine our environmental footprint that we use for our products. Just as we are concerned with bringing our loyal consumers the latest in anti-aging technology, we are as concerned about how we can also prevent our environment from aging prematurely. The Beauty of Sustainability lies in our goal to keep our natural resources as beautiful as we find them. We recognize that our program is not perfect. No sustainability effort can be, but we are committed to constantly improving our efforts and results.

ACTION

• For Clean, Green Facilities, Against Excessive Energy Use. Through conservation and efficiency improvements, we have reduced the energy used to distribute our products and power our plants. We continuously monitor new technologies to try to find ways to enhance the efficiency of our existing operations or redesign processes to create less waste.
• For Clean Energy, Against Global Warming. We have installed solar powered systems to partially power both of our fragrance-filling facilities, and have partnered with DomeTech to install one of the largest non-utility solar energy systems in the United States at our fragrance manufacturing facility in New Jersey. More than 3,200 solar panels, which are designed to supply half of the plant's daytime energy needs, will offset the production of 10,000 tons of carbon dioxide over the life of the system.
• Additionally, Aveda has partnered with Xcel Energy's Windsource Program to purchase electricity from wind power to offset the electricity used at its Minnesota manufacturing and distribution facilities.
• The Origins brand has provided wind power to their North American retail and U.S. manufacturing facilities since July 2007.

For Responsible Packaging, Against Waste. We believe that cosmetics packaging must be sustainable as well as beautiful. Our Cradle-to-Cradle philosophy requires that we find ways to make our packaging available to be re-used as a resource after the product has been consumed.

Our Environmental Packaging Design Protocol, (www.elcompanies.com/citizenship/environmental_health_safety/environmental_packaging.asp) in effect since 2001 and updated regularly, mandates the use of bio-based or technical materials that can be recycled, composted or recovered in a waste-to-energy facility.

• It bans the use of materials from old growth forests and favors recycled paper and fiber products, or materials from sustainable sources.
• We avoid PVC in our packaging wherever practical.

• The Company requires all of its packaging suppliers to test and certify materials to minimize heavy metals and other noxious substances in compliance with regulations such as the European Union's Essential Requirements for Packaging.

Origins, working together with Mohawk Paper and Johnson Printing & Packaging, developed a package for the Dr. Weil product line that consists of 50% post-consumer recycled (PCR) content and 50% Forest Stewardship Council (FSC) certified paperboard. Additionally, this paperboard is manufactured, printed and folded using 100% renewable energy resources. In Fiscal Year 2006, using the Mohawk board, total air pollution has been reduced by approximately 33,000 pounds, which is equivalent to not using 14 barrels of crude oil or planting approximately 6,310 new trees.

• For Bio-Diversity and Indigenous Entrepreneurship, Against Poverty. Aveda is an industry leader in exploring ingredients and knowledge from indigenous sources. With local business partners in countries including Brazil and Australia, Aveda encourages local efforts to reduce poverty by supporting environmentally sound community business initiatives.
• For Resource Conservation. Environmentally sound waste management practices are integral to The Estée Lauder Companies. Where we can, we reuse our waste materials. When they cannot be reused in our operations, we recycle where markets for these materials are available. If we are unable to reuse or recycle our material, we dispose of our waste at one of our contracted waste-to-energy recovery facilities. The Estée Lauder Companies does not landfill any of its Operations' waste.
• For the Safety and Well-Being of Our Employees. Global standards have been enacted to ensure that all of our employees have a safe workplace and are trained in all aspects of their jobs.
• For Responsible Information Sharing. Three years ago, The Estée Lauder Companies made a commitment to print the Annual Report on FSC-certified post-consumer paper. Environmental benefits may be found on the inside back cover of the report.