RI Annual Report 2023

Active Ownership


Engagement case: Ulta Beauty Fund: Nordea 1 – Global Climate engagement Fund Background In 2023, we initiated our engagement with the US-based beauty company, Ulta Beauty. This engagement focuses on responsible procurement practices and a sustain- able product offering. This includes both our belief that the company needs to source products and packaging with a lower lifecycle of environmental impacts, but also as a retailer the need to actively engage suppliers on their environmental footprint to enable positive change throughout the value chain. However, given our broader PFAS engagement, we have also included this topic in discussions with Ulta Beauty. Given the absence of a harmonised regulatory framework and the uneven development of standards, we need to consider the ingredients and chemical management of consumer-facing companies such as Ulta. While we have seen improvements in the company’s external rat- ing for the management of chemicals, such as through the Retailer Report Card on Toxic Chemicals, we aim to further encourage positive progress and practice within this domain. The Engagement We discussed how the company can position itself progressively on the ingredients side with a ‘Beyond Restricted Substances List’ which goes further than legal compliance, such as on the topic of PFAS, while maintain- ing the possibility to offer a broad range of choices across different customers’ sustainability preferences. In this regard, we encouraged the company to work closely with its entire supply chain to ensure that these substances are already – or can be – removed from their products.

Ulta explained its approach and the integration of ‘Con- scious Beauty’ across the company. The company takes a holistic approach, which rests on a foundation of trans- parency as well as offering choices for consumers while monitoring and addressing the demand for more sustain- able offerings. Its platform aims to allow the customer to make the best choice for themselves, offering different certified “pillars” within their sustainable offering. Outcome We followed up with the company, reiterating our key points. • The company has a powerful role to play in going a step further to help customers not make adverse choices even while regulations on chemicals of concern, such as PFAS, are not finalized and remain patchy • The long-term aspiration could be a ‘Beyond Restricted Substances List’ which goes further than legal compliance and would further underline the responsibility that Ulta already now takes towards its customers Finally, we complimented the company on their reporting and encouraged them to enhance the quality and disclo- sure even further by discussing the progress and journey of their ‘Made Without’ list and ongoing engagements with brands and manufacturers on these topics where feasible.

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