Estee Lauder Creates New Division to Oversee Diversity Promises

(Bloomberg) -- Estee Lauder Cos. is creating a new division to oversee a long list of diversity promises that the cosmetics giant made in the wake of employee criticism over race relations last year.

The goal is to ensure the company meets those commitments, which include increasing Black employment to population parity at all levels of the business. Senior Vice President Nicole Monson, a labor attorney who worked previously at Wall Street powerhouse Goldman Sachs Group Inc. and industrial equipment maker Ingersoll Rand Inc., will oversee the effort. Estee Lauder has more than 25 brands and employed a workforce of 48,000 at the end of fiscal 2020.

The cosmetics industry has found itself in the middle of a corporate reckoning centered on race. Activists seized on beauty companies for their cultural influence, their failure to serve shoppers of color and the lack of opportunity they offered minorities. In the past two months, retailers Ulta Beauty Inc. and Sephora USA inc. each vowed to offer more Black-owned brands and invest in anti-bias training for employees.

“When you look at the amount of money that is spent by people of color in the beauty space, it was kind of like ‘enough is enough,'” said Monson, who is leading Lauder's Equity & Engagement Center of Excellence. Last year's uproar finally put a spotlight on the issue, she said. “We were not being seen.”

Internal discussions at Estee Lauder, which owns brands such as Clinique and La Mer, began shortly after nationwide protests against police brutality erupted last year. A group of employees sent a letter to Chairman William Lauder calling for the ouster of board member and family heir Ronald Lauder over his support of former President Donald Trump and said their employer wasn't doing enough for Black workers. He remains on the board.

In response, William Lauder and Chief Executive Officer Fabrizio Freda outlined a list of steps management would take to diversify the workforce, including boosting Black hiring and requiring diverse slates of candidates for executive positions.

The biggest commitment was to increase Black employment to population parity by 2025, joining a nascent push for racial quotas in corporate America. As many as half a dozen companies have adopted such requirements at some level, including Wells Fargo & Co., Ralph Lauren Corp. and Delta Air Lines Inc.

“This is not a nice-to-have. This is a business imperative,” Monson said. Retaining a diverse workforce “ultimately impacts the bottom line.”

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