Good afternoon. Before we begin, we'd like to remind everyone that media and the press are not authorized to be on this call. If you are from the media or the press, please disconnect from the call now. The content presented on this conference call is proprietary to and/or subject to the copyrights of Jefferies or third parties. Further, as a matter of legal compliance, we remind you that you must not attempt to elicit from any speaker at this event any material, non-public information or other confidential information. Accordingly, the speaker may decline to respond to any question in his or her sole discretion. You may not publish or otherwise publicly disclose the name of, or otherwise identify the speakers unless Jefferies permitted in writing. By attending this event, you agree to all of these restrictions. With that, I'll hand it over to Aniket to begin.
Kasey, thank you very much, and greetings everyone. Hope you're doing well. My name is Aniket Shah, and I lead the ESG efforts at Jefferies. Today you're going to understand and see how ESG really can impact and improve a company's performance and be right at the core of what a company does. There's no one better to guide that conversation than my colleague Stephanie Wissink, who's hosting today's session, and is truly one of the leading voices in the industry around how investors can better analyze the financial importance of ESG purpose and impact when they do financial analysis. I just wanna say a couple things about what we are doing here at Jefferies before I hand it to Steph to introduce the team at e.l.f. and the session today.
The first is that you're hearing a lot about sort of the end of ESG in the press these days. We all have a, you know, the world sort of jumps oscillates between enthusiasm and anger very quickly. What we're gonna hear today and what you'll see is that the underlying trends behind ESG, sustainability, and impact, they're very real. They're persistent because they actually make companies better companies. We're gonna see that in live form in just a few minutes. The second point I wanna make around what we're doing at Jefferies and our approach is we wanna make this whole ESG and sustainability topic very practical and very real. We're not in the business of ratings and scorings and all of that.
We start from the initial premise that ESG issues can impact a company's revenues, they can impact a company's expenses, they can therefore impact a company's earnings, they can impact a company's growth rate, they can impact a company's discount rate, and therefore they impact the financial performance of a business. What you're gonna hear from Steph, and those of you who follow her work, you know this, that she's just a fantastic analyst who helps her clients understand how that's all evolving, and we're gonna see that in live form with one of the companies that she covers. We are delighted to be here with all of you. Steph, thanks for letting me just say a few words, and I'll hand it over to you now.
All right. Thanks, Aniket. Appreciate the compliments as well. This is a true treat for all of us today to hear from a company that is not only following industry standards but actually setting them. This is something I've known to be true about e.l.f. since the pre-IPO diligence that we did. Tarang Amin, the company's CEO, is with us today, and he can share a little bit about that journey that the company has been on to really establish a corporate practice around purpose. Again, it's something that we noticed early on about the brand, and it's something that has certainly come to fruition, and it's manifested in today's announcement of a purposeful impact report that the company has put out for all of us to read.
Also joining is Scott Milsten, the company's General Counsel and Chief People Officer, and is also the executive sponsor internally for e.l.f.'s ESG strategy. I think it's really important just to call out that we, on the consumer side, really value chief people officer's role in the ESG strategy of a company because people are an extension of the brand. That couldn't be more true in the beauty industry, where we see a brand extends beyond the product. The people do carry that ethos with them. Employees, stakeholders, shareholders, and ultimately brand representatives at the store level. We do think it's important to talk about the people attribute, and it's great to have Scott with us today as well. Also on the line is KC Katten, the company's head of investor relations and corporate strategy.
KC has also been very instrumental in how we're thinking on the investor side about applying ESG frameworks to valuing the company and some of the strategic initiatives the company is undertaking to improve its performance. Thank you both for joining me on screen. I wanna turn it over to you, Tarang, to just begin to level set and bring everybody up to speed on the launch of your impact report and maybe some of the highlights from that, and then we'll get into a set of questions.
Great. Well, thank you, Steph and Aniket, for hosting this discussion of our first ever impact report. I'm incredibly proud of the entire e.l.f. Beauty team for all the work that's gone into not only the report, but more importantly, the fundamental initiatives behind it in terms of the impact that we're making. You know, our vision as a company is to be a different kind of beauty company that disrupts industry norms, shapes culture, and connects community through positivity, inclusivity, and accessibility. It's very much this DNA of this company, this disruptive roots of this company that is reflected in our impact report. It's different in four different ways. The first way it's different is in the name. It's not an ESG report, it's an impact report. It really highlights the impact that we're making to people, the planet, and our furry friends.
The second big difference is in the design. This is not a text heavy document that we've dropped on people. It very much reflects the ethos of our company and our brand, which is to engage our communities and our stakeholders. You'll see in our impact report, both visually and verbally, a way of bringing to life the key initiatives that we're doing as a company in terms of impact. The third is in design. It's also not a, you know,
Text heavy report as I said, but I'd say related to that is also kind of in the length. We also did not bombard people with a 100-page memo in terms of what we're doing. We really focused on the key areas of impact that matter to our stakeholders. The last is in purpose, you kind of led with that, Steph. e.l.f. Beauty is a purpose-driven company, and the impact report very much lays out not only our purpose but the key initiatives of how we're bringing that purpose to life. I'm really proud of the report, and I'm looking forward to this discussion and happy to open it up to questions.
Thanks, Tarang. I think it's really important to start with brand, because in the consumer industry, we think of brand equity as a key component of stock equity. I wanted to have you share with us a little bit behind the curtain. When you started talking about developing an impact report, how did brand and brand position, brand purpose, brand consciousness fit into that conversation early on?
Oh, it's absolutely central. If, you know, you've often heard me talk about the superpowers we have as a company, this unique combination of having premium quality beauty products at extraordinary values that are vegan, cruelty-free, and have broad appeal. Those superpowers really propelled this company over the last 18 years, and we continue to build up upon them. The impact report very much talks about those initiatives related to the brand first and foremost. A couple of years ago, we acquired a pioneering clean beauty company called W3LL PEOPLE. It was really part of our commitment to clean beauty. W3LL PEOPLE really accelerated our efforts in clean. In fact, last year, we reformulated over 350 SKUs on the e.l.f. brand to be 100% clean.
We avoid over 1,600 different ingredients and really building on those superpowers that our brand is known for, where we added clean as one of the other superpowers. Recently, we just announced that we're the first beauty company to also be Fair Trade Certified. This is a pretty major milestone, and for me, it's quite personal. It goes back 15 years ago when I first met Paul Rice, the founder of the Fair Trade USA, and was really inspired by what that movement is doing in terms of the well-being of workers and the communities around them. We embarked on a journey with Fair Trade to be the first. It had never been done in beauty before. There might have been isolated ingredients, but you never actually certified an entire manufacturing facility. We got that certification. We're certifying the rest of our facilities.
All of this relates back to the brand. These core superpowers are meaningful because they're meaningful to our communities, and they really drive kind of what the different type of beauty company we are, and then more importantly, also hope that they inspire positive action in others.
That's great. I think one thing I know to be true about e.l.f. is that it busts a lot of myths, and this is one of them, and the fact that product that's clean and good for you is more expensive, and that's not the case. You bring tremendous value to your consumer. I want to just jump ahead a little bit and talk a little bit about that concept. When you're communicating with your stakeholder consumer, how important is that to maintain that value proposition, but still advancing along the expectations continuum of what your consumers have for you? Maybe, Scott, if you want to jump in as well, feel free to do so.
Yeah. Tarang, I mean, I can start off, but I mean, Steph, hugely important. Yeah, I mean, absolutely. Our sort of some of the hallmark superpowers that we have are integral to our consumer and also integral to our, you know, ESG journey, if you will. We're talking about cruelty-free, vegan, and our definition of clean, now eliminating over 1,600 ingredients, plus another set that we've recently identified. The ability to deliver that proposition at value, we think is just hugely important to our consumer. It's also really to the internal team here. I mean, these are things that are just core to the DNA of our people. I mean, the cruelty-free sort of stamp, and we're now double cruelty-free certified with both PETA and Leaping Bunny.
I mean, these are things that our employees are super passionate about, and you'll see that in our community as well.
Yeah. I'll add to that. When you think about our community, you know, we're number one amongst teens. We have a strong following amongst millennials, even Gen X. Part of what we're always looking at is what's important to that community. These attributes and core values, as Scott said, are meaningful to that community. I'd say one of the big differences over time is particularly that younger generation really cares not only about what a product does, but they want to feel good about the company that's backing that product up. These values actually are absolutely essential in terms of their choice of what beauty company are they or what brand are they buying and what they feel good about in terms of supporting.
There is, you know, obviously, we feel great about the overall values, but there's also an impact to the business, which I can talk about a little bit later too, in terms of where we feel it's essential in terms of the choices consumers make on the brands they pick.
Tarang, something you mentioned earlier when you were describing your impact report, it does sound like it was designed ultimately for your consumer as well, not just stakeholders and shareholders and investment professionals, but also knowing your audience, that they're going to fact-check you. Part of this was building that fact-check process.
Absolutely. I think, you know, that was also, you know, I talked a little bit earlier in terms of the design. We did not gear our impact report only to ESG professionals or people who follow that. We really geared it towards what do we stand for as a company. The most important thing we stand for our company is serving our community. That community really does care. We actually already have it on our website. You can see not only the impact report, but you can see all the different initiatives that we're doing. You know, even on our website, it's one of the most visited portions of our website. It talks about the importance that consumers place on those values and definitely is geared really for all of our stakeholders.
Probably I would say the most important stakeholder we have is the community that we serve.
All right. I want to stay with culture for just a little bit longer because it's so important as we think about ESG beyond initiatives and tactics, that it really is embedded and integrated into the culture. I want to use a few words that you use to describe yourself, fearlessness, thoughtfulness, proactivity. I wanted to just have you riff on those topics a little bit in terms of how does that impact your impact strategy and maybe both on the people side, but also on the action side, you know, taking talk and moving it into action. Talk a little bit about culture.
Yeah. Happy to take that one, Stephan. You're right, those are all sort of hallmarks of sort of e.l.f. culture that we seek to build here. I used the word passion, you know, sort of earlier too. We do have an internal community, and we'll call the teammates here that are really interested in sort of setting a new bar in a number of these areas. This is not, as you'll see, not a check the box sort of report or exercise. It's very much an action-driven impact report for us. That's why I think Tarang Amin sort of said that, you know, it's the big nuggets. It's the 40 pages of stuff that we are really getting after.
Our teammates here are, you know, I have the privilege of being the executive sponsor of an initiative that's grossly oversubscribed, and we have more people that want to work on it than we probably have ability to service. All of those things are really driving the internal team and the. What the impact report does and even the site is, again, it sort of crystallizes and puts all those initiatives in a single spot. It just uses sort of a rallying spot around the company, but also with our external stakeholders. Finally, what I'd say is, you know, one thing that's interesting sort of culturally as we think about it is we've seen a lot of.
We too, I know you said at the beginning of this, we had the introductory, hey, we're not sort of doing this on grades or are you a 7.4 or a 89. We similarly are not, that's not our sort of mode of operation. We have seen measured improvement with a number of the sort of agencies that look at this without really a ton of operational change. We didn't sort of say, oh, we got to get after this scoring. These things, these practices have long been in place at e.l.f. and in our DNA. We've just memorialized them all in a way to tell our story in a transparent way to our entire community.
Great. I want to give you a little bit of airtime to talk about, and maybe brag a little bit about your D&I achievements and strategies, because it's one thing, again, during the pre-IPO diligence phase, it really struck us that this is core to the business from an ethos perspective, that you believe in it. You want your employee base to represent your customer base. You want your board and your management team to be diverse. Maybe Tarang to start with you, just talk about the importance of that as a steward of the company. Scott, maybe talk us through a little bit about how you execute that on a day-to-day basis.
Sure. You're right, Steph. It's absolutely essential to our overall mission. Our mission is to make the best of beauty accessible to every eye, lip, face, and skin concern. In order to bring that vision to life, we started with our own team. We're really proud that, you know, our employee base is over 75% women, over 40% diverse, over 65% Gen Z and millennial. We wanted to make sure our employee base reflected the consumers that we serve. It's not just our employees. We're one of, I think, only 26 boards out of, I think, 4,500 in the US of public companies that have over 40% underrepresented demographics on their board, over 50% women.
This goes from top all the way through the entire employee base. In addition to that, it's also the initiatives we do in terms of our culture of how we really promote diversity and inclusion. You know, it's striking for me sometimes. I see other companies and, you know, we're already at goals that other companies have set for 2025 or 2030. I think Estée Lauder wants to get to gender equality on their board by 2025. We're 56% women on our board. I think Coty would like to roll out DEI training by 2025. Over 90% of our employees have already taken Behaviors of Inclusion training.
It's something not only in the people that we have and represent the diversity that we have, but also instilling this culture of inclusivity and really getting the most out of each person.
Scott, maybe just take us one level deeper into that in terms of the processes or feedback loops that you have in place, because it sounds like some of this is activated from the top down, but in other cases it might be surfaced from your employees up to you in terms of opportunities to improve. Share with us just a little bit about that feedback loop without giving away too many secrets.
Yeah, no. We definitely do. You're right, Stephan. It goes both ways. You know, one of the predicates that we have at e.l.f. and something that I think has served us well over the years is what we have is sort of our one team, one dream philosophy. You know, we have our we sort of ignore geographies or a subsidiary or what brand you're working on, and we're all one team. What aligns us in that not only is sort of the cultural fabric that we'll talk about a little bit more here, but even things you know on total compensation. For example, we all are on the same bonus plan. We all have equity in e.l.f., every single employee, which I think remains quite unique in the beauty industry.
Anytime we have sort of a moment to align the team, is sort of something that we always take, and run with. We do have feedback loops going both ways. We still remain a small company, you know, so we get the benefit of when we hold a town hall, which we do twice a month, every Friday, you know, we have the anonymous survey that executive team takes right on that, you know, right on that town hall opportunities for improvement. What are you seeing that you like? What are the things seeing that you don't like? We do that more formally in a survey, and we may talk about that a little later because we have terrific engagement surveys.
We do have sort of that feedback loop going both ways, and we welcome those inputs, you know, as a company, through and through.
A key part of that feedback loop is also we have a high performance team culture, and we train our employees what does high performance team culture really mean of really building passionate relationships, encouraging healthy conflict, and providing tons of feedback, regardless of level, and especially to your peers, and then mutual accountability. Similar to Scott, we celebrate that every single town hall that we have. We have kind of awards on these specific high performance team behaviors. Different employees can nominate others in terms of the specific actions people are doing. We do facilitated sessions. It's a company that thrives on feedback, and it's an important part of the culture. It's very much not top down, but really is shaped by the entire employee base and the feedback that they're providing.
Maybe take a minute or so to talk about that employee survey that you do. It sounds like there's a top survey that happens every couple of weeks, but do you do a formal annual or biannual mega survey, anonymous?
We do. Yeah. Yes, we do. We've long done sort of what we'll call pulse checks and informal things. Especially during the pandemic, I think a number of companies, e.l.f. no different, sort of had the you know, how are we touching people? How are they doing? Some of those early days was a lot of it mental health, ability to work, things like that. For the last couple of years, we have done a formal and benchmarked survey where we compare ourselves to peers. The headline there, Steph, I'd say terrific, what we call engagement scores. Engagement scores have to do with you know, how attached are you to the organization as a company and what you're doing.
Things like, I'm proud to work for e.l.f. Beauty. We like the vision. We like the transparency of the company. Right now we're sitting at an 89% engagement score, which relative to peers is plus 15 points against the peer set that we're benchmarked against, which is obviously something we're super proud of. We sort of always got an offhand comment that we always like to sort of retell the story on, is that the person who helped us with the survey when they first saw the results said, "Well, we usually only see these with nonprofits," that sort of attachment and engagement. For like, this was like a for-profit score and a nonprofit scoring thing, and they were really, really pleased.
Beyond that sort of headline, every category in which we benchmarked, we've exceeded peers. Even those that were sort of the lowest, if we will, we're still +7, +8 against our peer set, or the consumer products peer set. It's very broad. It's not just beauty. That's something we're super proud of, and we've done that two years running now and will continue to do because you get to see trends, and areas to continue to press to leverage strengths.
That's great. All right. We've spent a lot of time on the internal. I want to step out of your walls and go into some of your external strategies, including marketing, because this is also something that came up in the pre-IPO diligence, this notion that you take a very different approach to how you represent your brand in marketing in an industry that has a notorious past for doing a lot of touch-ups and a lot of renderings that are not necessarily real. I want to just give you a chance to talk a little bit about the stance you've taken in your marketing program and how you communicate with your customers about living in real life and how you're a solution in that as well.
Sure. I mean, I think it goes back to the very founding of the company, digitally native company. In the early days, there wasn't money for marketing, so the real engagement came when people came to elfcosmetics.com. They almost discovered the brand on their own. They could leave a review. The brand was very much created by this community. We've taken that community approach where it's a very democratic view of beauty. It goes back to our fundamental value equation of premium quality at these extraordinary prices. We've always, I think, bucked the trend. Often sometimes in beauty, you have these unattainable aspirations of beauty, almost exclusionary in some respects. Ours, from the very first days, was how do you engage a community? How do you make this brand part of their community?
It very much is reflective of how we engage consumers. We do not do traditional TV, print advertising or advertising from that standpoint. We tend to figure what's important to our consumers and where they live. It's one of the things that made us a pioneer, for example, on TikTok. We're one of the first beauty companies on TikTok. I think our latest hashtag challenge had over 15 billion views. It was one of the reasons why we went into gaming. One of the first beauty brand to have its own channel on Twitch. It went very much back into what was important. Over 70% of our consumers play video games. Over 60% of them watch others play video games.
It was a way of engaging them in a way that was much more meaningful and relevant to them. Not just in how we reach them, it's also what we reach them with. Our channel, e.l.f. YOU on Twitch is 100% on female empowerment. Empowerment is a key part of our purpose pillar. We find ways of kind of continuing to innovate on different platforms, different ways that's important for different consumers, even on our brand-on-brand collaborations. Whether we partner with a Chipotle or a Dunkin' or, you name it, these are things that are both unexpected and really get the community into the brand, including that feedback loop that we get from them.
Yeah, it's really important, I think, to emphasize that because you don't spend as much as your peers on marketing, but the potency of your marketing is incredibly powerful, and it has proven out in the results that you've been putting up. I would compliment you. It feels like it's holistic, but it's also effective.
Yeah.
I wanna also just take a slight detour. Because you just launched your impact report today and you have a social impact landing page on your website, maybe just quickly, either one of you, just give us a quick tour of what people would see if they went there. As, again, take us behind the curtain. As you were designing that landing page, what were the key elements that were really important to you to signify that this is not just part of lip service, but this is really integrated into the way in which you operate?
Yeah, sure. Maybe I'll take a crack at that stuff. I'd say sort of two main purposes with that site, and then we'll get to design a little bit. One is just the transparency of telling our story and doing it all in one spot in a way that is sort of navigable and easy to get after. We launched that site originally in June 2021, and it updated and refreshed this morning with the addition of the impact report itself, but also sort of the 15 policies that sit behind the impact report. What you'll be able to see there when you go onto the site is that transparency, the impact report itself, the policies that support it, and also sort of the key foundations of what we're getting after in terms of our ESG journey.
The second, and it'll probably be dynamic over the years, is a spot to be transparent about goal setting and what the future is gonna look like. We've set some of those in the impact report itself, but we certainly wanna have a spot, and you touched on it earlier, where anyone can go to, whether that's our consumer, whether that's our employees, whether that's external partners. As you know, you know, sort of the partners we work with, the Target, Ulta, Walmart of the world, that's. This is a key part of their initiative as well. This is an email that we're sort of blasting to the entire community if you will, "Hey, go to this site and see what's there." I think it's just.
It's again just a spot where I think folks can learn the e.l.f. story in a way that is visually appealing, like we like most of our sort of verbal and visual initiatives to be. I think it's a great spot for that to happen.
We did have this on our list, but you actually just used a reference to something that is very considerable in this regard, which is partnership. You do work with a lot of retailers who are also advancing their standards of their vendor expectations. Maybe spend a little bit of time talking about how those partnership conversations are evolving, and do you find yourself leading those conversations in many regards, just given the progress you've made on some of the initiatives that they're setting goals for still? Talk a little bit about that.
Well, you know, as Scott said, this is not only important to us, but it's really important to our key retail partners as well. If I think about Ulta Beauty and their Conscious Beauty program, we're one of the leaders within that program. If you think about, like, what we're doing on clean, vegan, cruelty-free, a lot of the core values. If I look at Walmart, Target, in terms of what's really important to them, many of these factors are equally important to them.
It actually does aid our conversations in terms of our leadership with them, not only our leadership in terms of penetrating their supply chains of our customers, of how we partner to, you know, instead of doing price promotions, we're an everyday great value, how we engage consumers with our innovation, our holy grail innovation that really brings consumers that previously only had access to prestige products at much higher prices and making that accessible. Those are all key hallmarks of how we engage with each of our customers, but so are many of these other factors as well. The importance of being vegan, cruelty-free, clean, but Fair Trade. I've been actually amazed by the number of conversations we had once we announced that we're the first Fair Trade Certified beauty company. Our customers wanna know what did that entail? How long was that journey?
What did you have to do? How extensive were those audits? Will this encourage others to go there? People, I think, continue to look to us as leaders in many of these different aspects. I think it definitely furthers our conversation strategically with each of our customers, 'cause these are things that are also important to them. Everyone wants to do better, both in terms of what they're doing from not only a community standpoint, but your impact, to the environment and many of the sustainability goals that they also have.
Yeah, we talked about that in the session earlier today, the idea that as a retailer, you not only have your own corporate ESG objectives, but the fact that you are a conduit for allowing the consumer and the household to reduce their environmental impact and other attributes of what we would consider responsible purchasing or responsible consumerism. Very much important to kind of tie that to their strategy as well.
I don't wanna turn this conversation into a benchmarking exercise of your ESG goals and commitments, 'cause we can all read that in your impact report, but I wanna ask a slightly different question, which is, if you think about the goals that you have laid out and some of the things that you're transparently disclosing now, if we're sitting here in three to five years, what would you be most proud to have achieved? Maybe a question for each of you. If you think about one of those 15 big pillars, you know, which one do you lean into most as embedding the most pride for you?
Yeah. I'll start on the macro and then let Scott talk about the harder question on what is he gonna be most proud of. You know, I feel great that, you know, for a company our size, I think we have 309 employees, where we're at, just getting into this compared to some of the services. If you look at Sustainalytics, in our first year of publishing some of these policies, we already had better scores than Coty, Estée Lauder, any of the core peers in our space, which just did the first year out of it. My longer term goal is not only do we lead the beauty industry, but we also are amongst the most aspirational companies out there.
We always look at different benchmarks, whether it be a Patagonia, another Fair Trade Certified company, whether you look at VF Corp, a number of people who are really leading in these areas. For me, you know, we always wanna make sure e.l.f. is kind of leading the pace, not only in beauty, but well beyond beauty, would be one of my goals. What that will require is not any one metric, but really sustained progress against everything that really matters across that entire spectrum. That's really very much, you know, at least the aspiration that we have is we want e.l.f. to be a real leader in this space, not only for beauty, but well beyond it. Scott, you're on mute, I think.
No, that was great. Steph, I would say sort of on, you know, with my people hat, you know, I mean, I've got such pride in sort of the diversity of our team and the stats we have, as a, you know, at the board level and on the, you know, the company level. That even translates again into our China organization team in China. The demographic stats include, you know, that team as well. It's just that that's a great sense of pride for me in terms of the people. Sort of, you know, as a father of two teenage girls, I have, like, the passion of this generation on the climate initiatives.
You know, sort of is something that I think about a ton, and it's probably, I would say, the sort of hardest lift for everyone if we all sort of were honest about it, the sort of what are you gonna do on E? I'm excited with where we are in terms of our initial start. If I was sort of in that 3- to 5-year, I mean, I love. Let me stop, pause there for a sec. The Project Unicorn initiative, I think incredible, like, progress and a lot of that organically. How do you sort of strip down packaging? 1 million pounds of packaging reduced already is an incredible stat.
Some of our commitments on sort of the paper products that we're using are great, but I think the longer journey there is one that it's hard, but it excites me a ton given the passion that it has in our general community right now.
Yeah. You know, maybe related to that, 'cause I do think cosmetics is a bit harder than some of the other categories. You know, categories I work with are, like, large liquid fill in a bottle. You know, you can get there earlier with all the componentry, with all the different ingredients and everything else we have. For me, it's part of this journey of starting with vegan, cruelty-free, clean. Clean was a massive commitment for our company, one I feel great about across our entire brand portfolio. If I think of the future for maybe 3-5 years out, what right now is kind of table stakes in vegan, cruelty-free, I think in the future will be clean and sustainable. Clean, we're already there. We'll continue to make further progress on that front.
On sustainability, as Scott said, I think the first part is waste reduction, like get rid of waste. There's so much, I wouldn't call it noise, but so much made out of like PCR and other pieces there. For me, in the end of the day, it's like, it's an impact report, and we're very intentional in the name for it, is what's the biggest impact we can make? Whether I look at carbon emissions, if I look at other impacts to the environment, really taking a more holistic view that it's not just whatever is most en vogue in terms of the particular ingredient, but how do we reduce that impact, and how do we propel kind of the quality of our products and this incredible value? That combination is, I think, one of the things I'm most excited about.
It's the E part of it is the hardest part of that journey in some respects from where we're starting, 'cause we do so well on the S and G portions. I would say, even there, I can definitely see a vision of not only continuing to reduce more packaging materials, but reduce our impact and really add to that overall superpowers that we talked about, and, particularly with the quality of our products and the value.
Maybe just to bring a level of practicality to that, do the two of you have updates, you know, benchmarking tools or things that you use internally to measure progress on some of the impact areas, and maybe how frequently? Just give us a little bit of a peek into the dashboards that you both use to reinforce some of the progress.
Yeah. Steph, sorry, got a little choppy there. I think you were asking about sort of frequency and meeting of goals and things. Yeah, we do have a cross-functional team on this, and we meet regularly, including with our nominating and governance committee. Remember, we're fortunate to have a terrifically accomplished board generally, but we also have a true ESG expert in Lori Keith on our nominating and governance committee. We get a lot of inputs from that committee in terms of goals, goal setting, what are other people doing and what should we go after. We do have benchmarks for our initiatives.
A lot right now, again, in sort of the sustainability area are ones that we're focused on and focused on developing as we've sort of set some baselines, and now we're working to set those goals, a little bit more broadly.
Yeah. In terms of dashboards, I think, you know, a few of the things that we've looked at, we did our first materiality assessment to really figure out what's most meaningful to our key stakeholders, and that's what we pay greatest attention to. Like, what has the greatest importance? What's most meaningful? That helps prioritize the different factors we look at. Second, across every one of these core areas, we have important benchmarks, whether we talk about our diversity efforts, our culture, the engagement we talked about, whether we talk about kind of our waste reduction, some of the different areas that we're looking at there and setting goals. We have a number of different benchmarks.
Similar to Scott, I really, this is not something that is just an initiative of the executive committee. Our board is fully involved. Lori Keith is one of the key leaders in the ESG space, has been hugely instrumental and helpful to us in terms of really helping guide kind of what some of those goals should be, the approach should be, and the overall board is highly engaged as well. We share that every board meeting. Scott will actually start in the governance section in terms of our progress on ESG and impact and what that means. It's something that I would say goes well beyond even just our management team all the way through in the stewardship of our board as well.
Tarang Amin, something that you said just reminded me too that the strategies around ESG and impact will far outlive your own tenure as leaders. Maybe just, again, a little bit of a sneak peek into your own philosophy around this, but how do you think about planting seeds versus seeing things through the goal-setting element versus really establishing long-term, 25+ year transformational initiatives in the organization? Maybe just share with us a little bit about from a leadership philosophy perspective.
Yeah. I'd say our leadership philosophy really comes from what Scott talked about, one team, one dream. While we can set strategy kind of at the top level, it's really informed by all of our employees and the communities that we serve. As I think about transformational, what makes this really stick is this is not some corporate initiative that we're pushing down at the organization. As Scott said, we have more people who wanna volunteer to be part of kind of our overall impact program than we actually have seats or way of managing through. It's the values that each of our employees and the communities have, and then also being led by our community.
What's important, you know, if we went back 10 years ago, vegan and cruelty-free is not nearly the level of importance as it is today. Even five years ago, clean and sustainable is not really where it is. I think it's part of the real power of this, as I think about much longer arc, is creating a company that is not afraid to continue to innovate, not afraid to continue to be curious on the consumer and what's important to them and actually follow that lead. Some of the most passionate advocates we have within the company are some of our youngest employees who this is something so core to who they are.
That's, I think, one of the things that's really driven the company over time, is this ability to continually evolve the team and our approach very much in the mindset of what's serving the consumer into the future. It's a lot of like where we innovate and pioneer is with that lens. You know, the great thing for me is I don't even bother thinking about what's gonna be 25 years from now because the world is evolving so fast. I almost think more in terms of that five-year increments of the initiatives we have on clean and sustainable. As I can tell you, five years from now, that's gonna be more important than it is today, and it's pretty important today.
As we continue to go, Fair Trade was one of those things that was a long-term commitment of, you know, not only improving the lives of our communities, but also the workers who make our products and their communities. You know, a big part of Fair Trade is there's a premium that you pay on Fair Trade Certified products that the workers get to decide what they wanna do to improve their communities, whether it be education, healthcare, a number of other core initiatives. We feel the better engaged, not only our employees, but the partners we deal with in our community, the better we're gonna be able to continue to lead in our space. I think, but maybe Scott will have a better answer to that one.
No, that's a good one, Tarang. I mean, I think, Steph, even to think about. I do have a little sort of like get up to the cliff on sort of a 20-year goal, and I'm like, I don't think that. I just. That's sort of not where we are, I think, just sort of in our ESG journey. You know, a lot of times too, where you're sort of a first mover, like the Fair Trade certified factory, that's a first mover. That's a taking, you know, something that's been around and moving into a new industry. Would we have gotten that quote right to say that was gonna take a couple of years? Don't know.
We wanna do the work on, you know, on being that first mover and make sure we find those areas that are most impactful, I would say, regardless of timeline, right? That's one, you know, that's a perfect example, one that's early in our learning.
Yeah. You know, the last thing I'd say.
That's wonderful.
I'll take it back to the superpowers I talked about earlier. A little bit what is in my head is if you can offer the consumer something where they don't have to trade off. Like when I look at our superpowers and I say, we have premium quality at these extraordinary prices that's vegan, cruelty-free, clean, broadly appealing and sustainable over time and Fair Trade Certified, you sit there and you go like, "Well, why wouldn't you pick this brand over another brand?" I think that's our longer term kind of moat, is kind of creating this.
It takes a lot of work because even in that, being able to get that quality with the value and then having all these other attributes at the value equation that we do, is I think that the piece that gives me the greatest confidence long term in terms of always leading with what's important to the community and making sure we have it. While somebody else might be able to go get a decent price point or somebody else might be able to be cruelty-free, it's that unique combination of these core attributes that I think is the piece that gives me the greatest confidence long term. They'll continue to evolve, and you'll continue to see more superpowers being added in terms of what our company offers.
That's great. All right, final thought is more of an ask of the industry and your peer set. What would you like to see the industry overall collectively come together around to work together to find bigger solutions faster?
Yeah. Well, you know, I would say following many of the practices we have. I mean, you know, I can't tell you how many times I've been in the consumer space 30 years where I've heard the excuses on even at the board level, you know, the available talent underrepresented groups. I was like, you know, we squashed that myth within even getting to the IPO, which and I'd love to tell you it was hard, but it wasn't that hard. It was just like this intentionality of going and doing. Instead of talking about DEI, just do it. It's not that hard. Like, keep making positive progress as we go through.
Similarly, in terms of these other things of, well, I can't be cruelty-free and have premium products and have a great value, it's like, no, we're actually already doing it. The one that I would be probably I'd say the most passionate about is encouraging others on the Fair Trade portion as well, 'cause I think that's one where it. Yeah, it took us a couple years because we're the first in pioneering a new space, but now we've done it, we're happy to talk to any other company of how do you go about it, how do you drive? 'Cause we can see that impact.
Just being able to go through the 130 different criteria they look at when it comes to the well-being of workers and the environment and everything else they do, I think would set people up really well. You know, I'd say that would be one where I'd say we've already shown that it's possible, we can do it, and it leads to a broader ethos of companies that are Fair Trade Certified in terms of some of the things you believe in. I think that would be one where I'd kind of encourage the industry. One, follow the stuff we're already doing, but two, I think that's one where you could actually make, you know, I think global beauty and personal care is a $550 billion industry.
You think like the impact you could make to millions of people if you got those practices right is one that I'm personally very passionate about.
Yeah. For me, you know, I think it is on, you know, the diversity and inclusion stuff, just with the people hat on. I mean, I think as Tarang said, we've been intentional about it. If you're intentional about finding great talent that is from an underrepresented group, you find great talent from an underrepresented group. It's something that, I think that we are, you know, certainly a leader in and love to see, you know, I don't know, get to that point where it's not headline-making anymore. It just sort of is. We'd love to be a leader that helps bring the industry to that point.
Great. I wanna first thank you both for having open and candid conversations with us. I also wanna compliment you because I think there's something to be said for a small company that's a disruptor in the space, has a DNA of being a disruptor and a myth buster. They're really taking a lead in some of these areas, and, we're gonna now be looking to you as setting the benchmark for others to follow. I also wanna just say compliment to you personally, 'cause I can tell For both of you, this is a personal passion, and it's something that on the investment side I don't think we assess as well as we probably could how much internal belief is there from the leadership team in these important initiatives.
It's certainly clear from both of you that these are both professional and personal initiatives. Thank you for being open with us about that.
Well said. Thank you.
Yeah. Oh, go ahead.
No, I was gonna say thank you. You've been a real leader in this space. Aniket said it as well. Often I actually learn a lot just by reading some of your reports on what else we should be doing.
Thank you.
Yeah, absolutely.
I appreciate that. If you have any questions for the e.l.f. team, please reach out to us. We're happy to put you in touch with them. As I mentioned earlier, KC Katten leads the company's investor relations effort and would be happy to follow up. I think the course of action for all of us is to go take a look at that impact report. It's a great report. There's a lot packed in there, but it's also very digestible. Kudos to you, Tarang and the team, for putting together something that's easy for us to take in and assembling it for us to put it all in one place. Much appreciated. Thank you everyone for joining, and have a great afternoon. Take care.
Thank you.