Personal Care, Global Responsibility

Keith Zakheim 0:00

Welcome to the Age of Adoption podcast. I am your host, Keith Zakheim. Today as we do with every podcast, we're gonna ask our guest one question and one question only. What is your age of climate adoption story? A little bit about the age of adoption. We live in an era where enterprises of every shape and size, regardless of industry, must rapidly transform to become more sustainable, climate sensitive, and just.

Keith Zakheim 0:30

My day job as CEO of the marketing public relations firm antenna group. Our agency works exclusively with conscious brands. What is a conscious brand? It is a brand that is conscious of its responsibility to be on the right side of history. Like most businesses, our clients are experiencing a transition from an age of innovation.

Keith Zakheim 0:51

An era in which technologists, entrepreneurs and investors focused on innovating climate and sustainable solutions to this age of adoption, which characterizes the world today. So if you accept the age of adoption hypothesis, then there's really only one salient question to be asked. What is your age of adoption story?

Keith Zakheim 1:17

Alexandra Habib's career has been guided by one consistent principle, working on issues that have impact and a higher calling after cutting his teeth in New Jersey politics and campaigns, no easy task. Alex became my colleague and friend when he joined Antenna Group to help build our fledging public affairs practice.

Keith Zakheim 1:37

I knew right away Alex was gonna be successful. And of course I was sad to see him go. But honestly, the most important thing about Alex's tenure at Antenna was it was at antenna that Alex met his now wife, Krista Sini, our Chief client Officer. I guess this is Cupid's first appearance on the Age of Adoption podcast.

Keith Zakheim 1:59

Anyway, after graduating from Antenna, Alex moved to Johnson and Johnson, but it is in his current position at L'Oreal where he is found his true calling, crafting, and telling the sustainability story of a company that generates 43 and a half billion euros in sales while achieving 20% operating margins and delivering 11% shareholder returns.

Keith Zakheim 2:22

Compounded over. The past 10 years, Alex shares both L'Oreal's hits and misses in their ambitious sustainability transformation goals and reinforces the message that large enterprises can do well by doing good. Today. On the Age of Adoption podcast, Alex shares how L'Oreal's sustainable product optimization tool.

Keith Zakheim 2:43

It's become a design standard. For every new product, why environmental and financial performance are inextricably linked, and how the beauty industry is scaling sustainability from the elephant in the room. Companies like L'Oreal to the smallest players back with Alex, faster than you can apply. MAs SC made from 94% recycled content.

Keith Zakheim 3:06

Alex, welcome to the Age of Adoption podcast. Thanks for having me, Keith. My pleasure. So for our listeners, just a little bit of background. Alex and I have known each other for a long time. Alex, at one point in his career, worked at the antenna group doing public affairs for us, and unfortunately because he was so good at what he did, he didn't stay long.

Keith Zakheim 3:30

We tried to keep him. That's for another time. But I have gotten over. That loss, and Alex and I have remained really good friends. Alex is good people, and for the purposes of this podcast is really good at what he does. So I'm, I'm excited today to, to really dig into Alex's role as VP of Sustainability Communications at L'Oreal.

Keith Zakheim 3:51

For those who don't know, and we'll talk a lot more about this, L'Oreal is really one of the. Corporate stalwarts globally when it comes to sustainability and climate and overall adoption of, of those technologies and best practices. So we'll get to that in a bit. And Alex, you know, I, I think that of course, with antenna being part of your career journey, would love if you can, to share your career journey, how you got to where you are right now.

Keith Zakheim 4:19

Really at, at, at just a prominent position when it comes to sustainability comms, and also I think a fantastic purview because of what all that L'Oreal does for you to be able to see and assess the wider industry and in general, corporate America and, and, and corporates globally. So Alex, the floor is yours to share your career journey.

Alexander Habib 4:41

Thanks so much Keith, and really I'm excited to be here, not just because you invited me, but because, you know, this is something that I think you'll see throughout my career trying to, to work on things that have impact, that have, you know, a higher calling than working for oneself has been some of, some of the themes that have kind of guided me throughout every.

Alexander Habib 5:00

Role that I've ever held. You know, when I graduated I kind of caught the political bug. I worked in campaigns and elections. I worked in the New Jersey State Legislature for several years. And you know, I think the impetus and the, the excitement for me back then was you got to write laws and I got to write legislation that, you know, people benefited from things that, you know, like.

Alexander Habib 5:21

Preventing, you know, hospitals from billing for medical errors, you would think you didn't need a law for that. But here we are, and I, through, through learning and through doing, you know, you begin to start to cultivate a little bit of an understanding of what it really takes to, to govern, but what it also takes to create good policy, but also how to be an advocate for, for policy as well.

Alexander Habib 5:40

And, and that led me to getting recruited by this, you know, firm that you obviously knew antenna group, because I think. You guys were creating a public affairs practice at the time, and that was really exciting that to be able to apply this like subject matter expertise, but through a communications lens and to be able to create issue advocacy campaigns to, to cultivate collective action.

Alexander Habib 6:01

And I think some of the issues that I got to work on that antenna were, were really meaningful to me in some way, shape, or form. But as I think as you mentioned, you know, I think I, I overperformed maybe a little bit and that, that led from my recruitment to, to Johnson and Johnson, where I led public affairs there on several consumer issues.

Alexander Habib 6:19

And so, you know, my time there was met, you know, again, issue advocacy, work, policy, communications, and you know, something I haven't mentioned throughout, but. Within each role. I touched sustainability. I touched environmental legislation. I touched, you know, recycling and I touched water. I touched nature, right?

Alexander Habib 6:38

All these things that were, were sort of at the time. I needed to know enough, but I didn't need to know it all right? And I think. Eventually I found my way at a company like L'Oreal, and it was actually the first time I did not work on anything policy related. And it was a very welcome break in my career to work on just corporate communications.

Alexander Habib 6:59

But you know, I think a few years in that role, one of the things that I, one of the things that I, I noticed is that increasingly the company I was working for, I am working for absolutely. Wants sustainability to be a core part of its identity, about its reputation. It wants to lead the beauty industry in being a more sustain and, and creating the future of sustainable beauty.

Alexander Habib 7:21

And increasingly, everything, everything this company does has a, a, a, an, an environmental impact and, and consideration for the environment and everything from product design to how we go to market, to how we advertise, to how we manufacture sustainability is deeply embedded in every aspect of our business.

Alexander Habib 7:40

So I, I found it almost serendipitous that there was no, there was no. I'd say, uh, a more interesting role in the company for me than to head up communications simply to tell this company story about all that we're doing to drive a more sustainable beauty industry.

Keith Zakheim 7:59

Yeah. And Alex, I, I know also before we get into to the age of adoption question, what I also really like about what you're doing right now is you're sharing those best practice practices from L'Oreal with the wider industry.

Keith Zakheim 8:11

And I know you chain, you chair the sustainability committee at the Personal Care Products Council. Can you, can you talk a little bit about that role?

Alexander Habib 8:18

Yeah, so you know, the Personal Care Products Council is our Treat association. So I've been involved with the Personal Care Products Council for several years.

Alexander Habib 8:24

When I was at Johnson and Johnson, I was part of the communications committee, but recently the sustainability committee at the Treat Association has, you know, resurrected and it was a big push by. The former CSO over at Ken View, which was the spinoff of Johnson and Johnson, Pam Alabaster, and she resurrected the committee.

Alexander Habib 8:41

She asked me to be her vice chair, and as I've now find myself as chair of this committee, trying to, to carve out a voice in this organization and in the trade association that specifically allows. For space for environmental experts to not only intersect with, with our policy advocacy work, but also to intersect with, you know, again, what does it take to drive a more sustainable beauty industry, whether you're a big player or a small player.

Alexander Habib 9:08

And, and what's interesting and what I find is that, you know, L'Oreal obviously. We're, we're like the, we are the elephant in the room, but there are a lot of big players, but the trade association is made up of a number of small and mid-size firms and you know, they don't have the scale, they don't have the ability to figure out how to comply with things like extended producer responsibility.

Alexander Habib 9:28

CSRD global, I mean, right. They're, they wanna be a global business, but they, they don't have sometimes the resources. And that's where I think the, the value of really cultivating an expertise within the personal care products council can drive impact in the beauty industry. And so this is a moment where, you know, I'm, I'm sitting down with our, with our, in that moment, my peers, my, my collaborators across the industry to figure out what is it that we're gonna need to do in order to drive the broadest impact for beauty.

Alexander Habib 9:55

Yeah, it

Keith Zakheim 9:56

really seems like. There. I mean, it seems to be that it's an engaged membership when it comes to sustainability and, and, which is fantastic. I know that, you know, when you look at in general the personal care products industry, there is a lot of work to be done when it comes to sustainability. So the fact that you're talking to a larger audience, and especially the companies with who one day may get to scale for the, for them to embed these best practices.

Keith Zakheim 10:22

Into their operations supply chains early can only be to the benefit of, of the sustainability community. Alright, so let's shift Alex into, you know, the question that we ask on this podcast each and every time, the age of adoption question. For most of our guests, it excites them. For some of our guests, it puts the fear of God into them.

Keith Zakheim 10:42

I know that you're the form, I know you're the former, not the latter, but just to frame the question for a little, so, you know, L'Oreal, I guess a, a, a deep belief is that consumer behavior kind of informs the shift. From kind of eco-friendly product marketing to deep operational improvements, and from that you have pretty ambitious goals, 2030 goals, a 50% reduction in CO2 emissions per product sold.

Keith Zakheim 11:08

It's not just overall, but per product sold, which is a lot of work, I'm sure. A hundred percent of factories equipped with water loop systems. And I know water reuse is a big, big part of the business. And, and one of the pain points in the industry, the amount of water that's used, a 95% bio-based origin ingredients.

Keith Zakheim 11:23

And then you have sustainability reports, which really holds L'Oreal accountable, which is critical when it comes to sustainability goals. Not just to announce 'em, to make sure that when the rubber meets the road, you know, action is, is, is really aligning with those goals. And then. I know as well that that the core belief is that data drives impact and you have a kind of a tool for that as well.

Keith Zakheim 11:47

So there's lots to discuss here. Alex. We don't have a ton of time and again, this is one of those companies where we could talk about it for an hour, which is a great thing. But Alex, what is your age of adoption story?

Alexander Habib 12:02

So, you know, I would say that I think that the company. As I understand it has really been committed to sustainability for almost 25 years, making some choices pretty early on, that were a bit ahead of their time and they really, I think today have helped the company become much better prepared at tackling some of the challenges and some of the.

Alexander Habib 12:21

The, the, not just the headwinds, but also some of the, some of the opportunities in front of us, you know, from the beginning, as you mentioned. I think this company is one that being European based, I think we believe that financial and environmental performance are inextricably linked. And, and for us, this isn't just about compliance.

Alexander Habib 12:38

It's right. It's about future proofing the business and, and you're seeing this sort of play out today. Right. So I, you know, I think I, if I could illustrate maybe a, a, an example for you, a story, you know, it is funny because I, I've seen this. I've seen this quote kind of plastered on our walls before, and I recently saw it again and it reminded me of, it's in our, it's in our headquarters in France, and it's, it says, do then undo in order to do better.

Alexander Habib 13:02

And I've always understood that as like, it kind of felt very Yoda esque. And I laughed when I first saw it because I was like, oh man, this is corporate, you know, corporate, you know, lingo on the wall here. But really, I, I. It stuck with me over all these years because there, there's value in learning through building.

Alexander Habib 13:17

And, and I'll give you a, a story here about, you know, us learning that consumers, you know, they care more, they care more about, yeah, overall the action of a particular brand or an organization rather than just the single impact of one product. Right? And, and a great example here for us has been this Maybelline Green Edition collection, which had some amazing attributes, right?

Alexander Habib 13:38

It's a. It was a mascara launch that had a hundred percent PCR material. It had, it was cradle to cradle certified, but you know, it, it had, it had bio-based material concentration that was really high, but. It didn't resonate with consumers the way that we had hoped it would. And so, you know, I, I'm, I'm reminded that that do then undo in order to do better.

Alexander Habib 14:03

Obviously we, we, we had discontinued the product because it just wasn't performing. But what we did find, find was that sustainability as the key offering of a product doesn't always resonate over performance. Right. And so consumers like sustainability, but not necessarily as a benefit. Sometimes it's, it's, it's not necessarily the, the primary purchase driver.

Alexander Habib 14:22

And so what did that really teach us? That taught us that in order to integrate sustainable features throughout our core portfolio, rather than creating these like separate individual lines, you know, some of our products in that portfolio today, like our Skyhigh mascara now uses 94% recycled content, right?

Alexander Habib 14:39

So it's a, it's slightly less than a hundred percent, obviously, but again, it shows that that innovation doesn't go away. It just becomes the norm. And the same goes for our super stay matting mascara. Again, it's, it's. You know, reduced by 228 tons of plastic globally. I think when you think about learning through doing, you know, doing, then undoing in order to do better like that is, that is a portfolio that's driving impact on plastic reduction.

Alexander Habib 15:03

You mentioned a few other stats too, around bio-based materials and eco design and you know, I think one of the things that I also wanna highlight is that that was just one example really for us. You know, the, the sustainable product optimization tool, AKA spot, it's a tool that we use. It's an evaluation methodology that allows us to sort of calculate environmental impact across, you know, 14 different like factors.

Alexander Habib 15:26

And as a result of that, it's sort of revealed for us the biggest places that we can have an impact on creating better environmental performance of our products. And as a result, you know, I think we've matured quite a bit on that front where every new product or every. Renovated product has to use this tool in order to understand its environmental impact.

Alexander Habib 15:45

So it's no longer just an objective, but it's actually a design standard for us now. And really, like, again, talking about, you mentioned data that gives us a ton of rich data to understand how do we feed into something that has just launched in Europe called the eco beauty score, which is essentially, if you could imagine it's.

Alexander Habib 16:02

It's environmental labeling for cosmetics and personal care products. So these things are not, you know, they don't happen in isolation. I mean, you, you being in the business of creating sustainable innovation has to kind of live over and over and over again. And for us it's, it's really, it's revealed exactly again, where we can have the biggest impact and helps us standardize this, which to, to me, I think has been the biggest place that we've had impact.

Alexander Habib 16:27

And when I think about our age of adoption story, I, I think of it largely in the sense of. How you come to know L'Oreal and its products, you know, us as a, as a consumer goods company and to know that each one of those products that go on the shelf has undergone some sort of environmental assessment.

Alexander Habib 16:43

And there are some products that are really good at it and there are some products that, you know, not, not so good at it. And so that, but that, what that does is it helps us identify the products that. We need to be able to focus on, and we need to be able to direct our energy towards, in order to become a more sustainable beauty business.

Keith Zakheim 16:58

Yeah, no, I love that. And, and you, so just the, the aphorism they have is. Was it again that you do, so then you de what, what did you say? The slogan. What's the slogan again? Do then undo in order to do better? Yeah. You know, it makes me think of, and we talk about this all the time as a leadership team at Antenna and, and, and the, the example I use is, is from the world of golf.

Keith Zakheim 17:23

Alex, which I know you and I both share, a love for Tiger Woods, who's the greatest golfer of all time. I think everybody would agree with that. After he won his first few majors, he went and hired Butch Harmon as his coach to fully deconstruct his swing. Because he felt that the only way he could continue to perform at that level and better was by learning a new swing, which is exactly that, right?

Keith Zakheim 17:46

And not being afraid to do it. Learning from it, and then ultimately having better performance afterwards. So anytime I have a podcast episode where I can work in golf, tiger Words, a score, it's, that's a success. Alex, one, one last follow up on this, and you know, we love of course. Well, I don't say we love.

Keith Zakheim 18:05

For sustainability to continue to get traction and for enterprises to continue to adopt and operationalize sustainability into their. Into their enterprises. Ultimately, economics are gonna have to work, right? I mean, people might pay some demographics, some type of premium, but ultimately companies, public companies have shareholders.

Keith Zakheim 18:27

They have to show bottom line. And you know, we've had a couple of companies come on, great guests from Mars and Iron Mountain, who they've tracked that, I mean, they know that their margins continue to improve. Their top line revenue continues to improve their operating margins improve. Because not despite all of their sustainability programs, and I know L'Oreal's no different.

Keith Zakheim 18:50

I mean 2024 results, you know, 43.48 billion euros in sales and 8.69 billion euros in operating profit margins of 20%, which is a record for L'Oreal and divisions outperforming the market. And for shareholders, 11 plus percent shareholder return over 10 years. So L'Oreal's crushing it. And crushing it by doing good.

Keith Zakheim 19:13

So just love to kind of hear a little bit more about that.

Alexander Habib 19:17

Yeah, so I, I, I'd love to be able to sit here and say it's because we're, we're, we're being more sustainable and by result, or as a result, sustainable business is good business, meaning we're generating value. We're, we're being better with resourcing.

Alexander Habib 19:30

But it's really hard to say it's because of this one thing. Right. I think it will zoom out a little bit and let's look at. Let's go back to 2020, right. And let's take a look at the, the, the, the results of maybe like the last four or five years, because that period of time has resulted in, I think, some of the best financial performance of the past decade of the company.

Alexander Habib 19:49

And it's, to me, it's, it's, again, I, I can't singularly attribute it to one thing, of course, but it is, you know, it, to me it is not lost that. We were also able to decouple our growth in the business. We were also able to, you know, reduce our emissions and grow our business at the same time, and to also generate profit and to also, you know, work on, on integrating more sustainable materials and to also consider our.

Alexander Habib 20:14

Business risks and mitigating business risks related to nature and climate. All these things, when they come together, I think make a, make the, the, the make the best argument for how financial performance and environmental performance go hand in hand. If you're mitigating nature and climate related risks, you're immediately.

Alexander Habib 20:33

Generating value for this for shareholders, you're immediately generating value for nature, and you're immediately generating value for ensuring that this business, you know, I is, is gonna be here for another 50 to a hundred to 150 years. Right. It's, it's a way of creating resilience in the business. And so it, it's not lost on me that when we started this current chapter of our L'Oreal for the Future Journey, which is our sustainability program, it also coincided.

Alexander Habib 20:59

Quite nicely with some of the most financially successful years of this company. Yeah, and, and,

Keith Zakheim 21:05

and, and a fair point, certainly though one could say that investing in sustainability certainly, certainly isn't undermining the economics of the company and shareholder returns. And, and ultimately even you break it down.

Keith Zakheim 21:16

I mean, if, if a company does sustainability right. With the technologies today, with the best practices today, input costs go down the need for commodities with higher costs go down externality or external costs, like in economics, they should go down. So, you know, agreed. There's, there's, I'm sure there's a lot of reasons for L'Oreal being among the best performers in, in the, in the public markets for some time.

Keith Zakheim 21:42

But you know, I think for the purposes of this podcast, at least, we'll give a lot of credit to sustainability. Alex, thank you so much for joining. I get the last word, so it's sustainability that gets the credit. Thank you so much for joining the Age of Adoption podcast. It was great to reconnect and look forward to seeing you soon.

Keith Zakheim 22:00

The Age of Adoption podcast features CEOs, investors, entrepreneurs. And policy makers sharing their climate and sustainability business transformation stories. Episodes can be found on your favorite podcast apps, including iTunes and Spotify. The Age of Adoption podcast is brought to you by Antenna Group.

Keith Zakheim 22:20

Antenna is the home of conscious brands. We partner with companies that don't wait for change to happen. These brands shape the future, are awake and already moving. Unsure if you are a conscious brand. Or even if you are one, whether you are positioned as one, please visit our website@www.antennagroup.com and take the Conscious Compass Assessment, a groundbreaking tool that enables enterprises to assess their brand against the eight traits of brand consciousness.

Keith Zakheim 22:53

At Antenna, we partner with companies big and small from growth stage to Fortune 100 to tell their climate and sustainability stories. So once again. If you're interested in joining the Conscious Brand Movement and learning more about Antenna Group, please check out our website@www.antennagroup.com.

Keith Zakheim 23:13

Ping us on LinkedIn and make sure to visit the conscious Compass.

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