Good afternoon, everybody. My name is Mark Carlucci. I lead our U.S. sustainability research. Very excited this afternoon to have Amyris today and Beth Bannerman, who's the Chief Engagement and Sustainability Officer, will be speaking. Before we start here, I just want to do a quick disclaimer. The views expressed or represented by non-Morgan Stanley speakers during this sustainability conference do not represent the views of Morgan Stanley or Morgan Stanley Research. For For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley representative. So, with that out of the way, Beth, thank you so much for joining this afternoon, and thanks again, everybody, for dialling in. Before we get into the discussion, Beth, maybe I'll turn it over to you if you want to do sort of an overview of your background and your role at Amyris. Yeah, thanks, Mark. Good to see you again. And by the way, I think we need to change the names of these sessions from Fireside Chats. It's more like flat-faced with kind of a pinhole camera. Not exactly a little strange with the no direct eye contact, but Fireside Chat is a nice idea. Yeah, thanks. Anyway, my name is Beth Bannerman, and I'm responsible for framing the ESG issues and goals in strategic terms, leading systemic ESG improvements, and communicating the strategic direction for the company's objectives. Beth, maybe just to sort of kick off the discussion for those on the line that might not be as familiar with the company, if you could just provide an overview, history of the company, maybe what markets you're involved in. Sure, yeah, so Amyris is a leading consumer health, beauty, and wellness company. We're powered by science. Our biotech-based fermentation is the science that powers clean beauty, health, and wellness, ingredients that we supply, and the consumer products that we also make and sell. Our focus is really on doing three things well. One is Lab-to-Market™. We're the only Lab-to-Market™ company in bio-based fermentation today operating at scale. We leverage our Lab-to-Market™ platform to engineer, manufacture, and market high-performance, natural, and sustainably sourced products, and we're unique because our technology platform across verticals delivers clean chemistry and addresses consumer needs for health, wellness, and sustainability, so one is Lab-to-Market™. The second thing that we're focused on is formulating our unique natural and sustainably sourced ingredients into our own family of consumer brands. We deliver a differentiated offer to consumers powered by our science. We currently have nine brands, of which we're continuing to further our leadership position in four categories in the beauty and wellness market: skincare, baby care, hair care, and color cosmetics. The third part of our business is technology access. This is fermentation-based technology. It's a platform that offers advantages to other traditional methods of manufacturing, such as petrochemistry or extraction, and the benefits are renewable and ethical sourcing of raw materials, less resource-intensive production, minimal impact on sensitive ecosystems, enhanced safety, less vulnerability to climate disruption, and improved supply chain resilience. Our history. We're 19 years old this year, so we can be drafted, but we can't order a draft in a pub. Amyris was founded with the intent to make what is finite in the natural world infinite. Our first major grant was from the Bill and Melinda Gates Foundation, and it allowed us to develop a revolutionary new way to create a life-saving malaria treatment for children in Africa from our labs in Emeryville, California, without ever touching the sweet wormwood tree in China, which is where the natural artemisinin molecule is found. We took learnings from that success and have gone on to commercialize 13 molecules with dozens in active development and hundreds more in discovery, and so, our North Star has not changed. We're all about delivering on the promise of biotechnology, making people and the planet healthier. Beth, maybe can you elaborate on sort of what is it that makes the products more sustainable and maybe touch on some of the key ingredients and how you go about producing those? Yeah, we make sustainable alternatives to natural ingredients. Our Lab-to-Market™ production process uses less water, less land, and lower greenhouse gas emissions. We don't extract or mine our resources. This is really important in the beauty business specifically. Unlike other companies, we don't rely on ingredients that are made with petrochemicals or natural ingredients extracted from the earth that would deplete the natural supply and disrupt the balance of natural ecosystems. Without a change to the way consumer products are manufactured, society won't be able to meet its consumer demand without causing irreparable damage to the planet. Aside from the environmental impact, reliance on outdated manufacturing methods also means that we can reduce animal suffering. Let me give you an example. Squalene is one of our ingredients that we make. Squalene is the world's best moisturizer. We're born with it as humans, but it dissipates with age. However, we do know that squalene exists also in the livers of deep-sea sharks, and it also can be found in olives. But so, for the last hundreds of years, people have killed deep-sea sharks for their livers and harvested millions of acres of olive crops for squalene, and that's pretty intense. We use our biotech-based fermentation and sugarcane, one of the most regenerative plants on the planet, to create our squalene with far less environmental impact without harming a single shark, leaving the marine ecosystem undisturbed. And we estimate that we save at least two million sharks a year. And to put that in perspective, we can create one kilogram of squalene, which is equivalent to three sharks saved, and that only requires enough sugarcane land that would fill an 8 x 10 rug. So, it's really small. Compared to olive squalene, we use 600 times less land than olive squalene producers. Everything we do at Amyris is focused on supporting the health of people and the planet. We start with Brazilian sugarcane, abundant sunshine, you can imagine, lots of rain. We remove carbon from the atmosphere as a result of using this rapidly renewable crop. In 2020, we received Bonsucro Chain of Custody certification, which ensures that the Brazilian sugarcane that we use is sustainably and ethically sourced. Our sugarcane doesn't require irrigation to prepare for the possibility of droughts. Our growers in Brazil have numerous water-saving measures in place, including pre-emptively collecting and storing rainwater and reclaiming wastewater. Let's see. We have other ingredients as well besides squalene. I'll give you an example: sandalwood. Sandalwood has been over-harvested, and the supply has dwindled over the years. Amyris produces high-quality santalol, pure, and it uses one-tenth of the land compared to the traditional botanical sandalwood tree source. Another example of an ingredient is bisabolol. This is an antioxidant, and it reduces inflammation. We require 230 times less agricultural land to produce the same amount of bisabolol than the traditional source. I could go on. We have patchouli. If you go to Amyris.com and take a look at our ingredients, we outline the benefits there, but they just go on and on. But largely, less water, less land, less greenhouse gas emissions. Beth, one thing that I think everybody hears a lot now is that consumer preferences are clearly shifting towards more sustainable products. Can you talk about maybe how these, not only is this good for the world, but also these sustainability characteristics perhaps could help support demand longer term as well, so just your view on that and more broadly, just the competitive landscape in this industry. Yeah, I mean, all the research, we don't really need research because we kind of can see what's happening. People are moving towards sustainability. But all the research is telling us, the data is important, right? According to Mintel's latest research, 55% of U.S. beauty product users are very concerned with the environmental impact of the brand's products they use. Now, that has always been the case. People have always articulated that they care about sustainability, but when it comes down to actually buying preferences, behaviour hasn't actually changed. Now, however, that's not true. Behaviour is changing. We are seeing an increase in purchasing behaviour. And part of that, we believe, is the products that we bring to the market are that our sustainably sourced products really work. They're really great. They perform really, really well. So it's not a trade-off. It's not like you're getting really kind of a shampoo or you're getting a lotion for your face that actually doesn't do the job that you need it to do. It's doing the work, and it's also really good for the planet. So that's why we have the tagline "No Compromise." It's really not a flippant term. We really do mean it. So I think that's helping. I think consumers, their expectations are rising, and they expect better products. They expect technology to be introduced into the consumer products that they use to make them perform better. Technology like ours can bring a product to market much faster in the beauty industry also, compared with biotech-derived food or fuel or medicine. The combination of faster innovation cycles and consumer demand makes it an ideal industry to push synthetic biology forward to mainstream consumers. Markets are responding to consumer demand. So again, Gen Z and Millennials around the world are demanding fewer ingredients. We know that. We want shorter lists of ingredients on our products, cleaner ingredients, plant-based and sustainably sourced. Gen Z consumers are probably at the forefront of the climate crisis. We all know that they're very vocal, and they are all about collective action, and social media is really helpful. So when the Gen Z consumer latches onto a company that stands behind what it says and does what it says, they spread the word. And that's really helping us. They're pushing for bigger, bolder, and faster moves from companies and demanding targets be set in a shorter time frame. They are not tolerating companies that put all the onus on consumers to recycle their goods. They're actually pushing companies to do better in terms of how they manufacture the goods, and that's why not only is it great that we do what we do for our own consumer brands, but the fact that we make these ingredients and sell it to other major players like Estée Lauder and others; this is important because we are enabling other ESG agendas, so we're helping all boats rise. We've led the industry. We're going to maintain that position. I think today we're probably around five to 10 years ahead of our nearest competitor in being able to take a target molecule, deliver it, and deliver it at cost and scale in a way that delivers real value to the market. In 2020, we made and sold more biotech-based fermentation products than any of the companies in our sector, so taking a look at the competitive landscape. We're a bit of a strange animal in that we compete in the beauty space, and we also compete in the synthetic biology space, so we make it a little bit challenging for folks to kind of put us in a pigeonhole, but I think that is just what a disruptor does. We're creating a new category. We're establishing a value that the world needs, and we're solving modern-day problems and that doesn't fit in old-school thinking, but that's where we need to be, and we're happy to play that role. I think the other thing that I wanted to just point to was the fact that we're seeing technology being introduced into consumer goods all the time, so Impossible Burger went from kind of a one restaurant now into Burger King, and everybody is familiar with Impossible Burger. Beyond Meat, same thing, just kind of exploded. I think right now what we need to, what I would suggest is the fact that Amyris is able to deliver at scale 13 different ingredients and disrupt multiple industries. It's important not to just look at Amyris as a competitor in the beauty space, but Amyris as a viable challenger in the beauty space and with the platform to be able to compete and become a viable competitor in others. The future is amazing. It's limitless. That's not just a story. That's actually built, that's actually, we can back that up with stats and data. Again, we've been around for 19 years, and we're just getting started. Clearly a lot to talk about on the impact side that your business is making. I want to hear sort of, I think you're in a unique position where to get some perspective here. You started at the company in 2020. You came to a company clearly with a lot going on on the impact side. Can you maybe speak to sort of how you built on that by putting together the framework for the ESG efforts within the organization? What were some of the priorities that you focused on when you first started? Yeah. Look, my role wasn't created until late 2020, but Amyris has always been deeply focused on sustainability. In fact, transitioning the world to sustainable consumption is the reason that Amyris exists. It's who Amyris is. So formalizing our ESG work is just an extension of what we do and what we have always done. My top priority was to work across the teams to collect data so that we could substantiate our strong ESG impact story. Listen, think about 2020. We were coming off an election where misinformation became the norm. The bots on social media made it very difficult to determine what the real facts were. We saw an opposition to science in general, from climate change to the vaccine. It was critical for us to do the work to back up our claims, to take responsibility, by the way, for closing gaps when we found them, and also bringing the organization along with us, our own internal organization. This is a journey, not a sprint. We're here to make progress. We're not going to claim perfection. There's a big, the world has a big challenge ahead of us. We are just one tiny company doing our tiny bit, but we have to do it really, really well. Listen, if reporting on ESG was simply going to be a vanity exercise, we wouldn't have done it. We really care about impact. We were doing this stuff for 18 years before we got started in reporting. Yet we do see benefits, of course, in ESG disclosure. One is we want to make sure that we get credit for the work that we're doing. There's lots of people making lots of claims, and nobody's holding them accountable for that, so first of all, ESG disclosure for our own operating excellence. It provides clarity on what matters. Our stakeholders want to know how purpose is material to the performance of our business, so it also provides evidence and metrics, which I talked about. It guides our executive team around how purpose can inform capital allocation decisions, both financial and human capital, and it aligns Amyris with leading global companies who disclose using standardized reporting focused around the most powerful and meaningful standards, and this really gets to enabling that ESG agenda that I talked about early. I'm really proud that in the first year, July 2021, we produced our first inaugural ESG report. That is part of our ongoing identification, assessment, and management of ESG risks and opportunities. The content in the report was produced after conducting a materiality and gap analysis using frameworks, including those of Sustainability Accounting Standards Board and the Global Reporting Initiative. It covered our environmental, social, and governance data for the year 2020. It outlined the impact that we're having by putting the health of the people and the planet at the centre of everything we do. It really demonstrates our commitment to creating long-term value for stakeholders, including our shareholders, employees, business partners, customers, and local communities. I led the cross-functional effort to produce that report. It was interesting when we first did our materiality assessment. Look, I think there were 300 different levers that we looked at to say which ones were most material to our business and which ones would be most material to our customers and other stakeholders as well. But really, we weren't focusing on investors first and what would get us a good score. It was more about how can we make a meaningful impact? This is all really important because the world of disclosure, as you know, is changing. But at the time, we were focused on what we could really make an impact with. It actually came down to 37 different topics of interest to different sets of stakeholders. And then we went about the work of kind of creating a roadmap and prioritizing work streams around that. I think there's a lot of both corporates and asset managers that are sort of in that position now where they're starting to put in place some sort of a framework around ESG. Can you maybe speak to some of the challenges that you came across when you started doing this and how you addressed those? Yeah. I mean, from a really strategic standpoint, I think the first challenge that we had was articulating a mindset that this was not about a report. We wanted to make sure, look, we're growing really, really fast, right? We've got lots of new people joining Amyris. And aligning and benefiting from the diversity of thought and the diversity of world experiences is great. But we also have to agree on what are the principles of operating? How are we going to go about this? So I think articulating the mindset, which was really all about sustainable growth, it was important for us. And I thought it brought us together really well was that we weren't going to have an ESG report and a sustainability map and then a revenue growth map. It had to have, we had to have a sustainable growth map. So they needed to, look, we've got kind of one bank account, right? We've got to be able to use all of our resources to build a sustainable business. So those two worlds needed to come together. And that was really great. And I think it actually energized the team to be able to think about it that way because we do attract purpose-driven people. And so when you begin to really kind of outline a shared vision, it is incredibly inspirational and motivational internally. And then it kind of, you basically benefit from the talent that we have internally. And I think, for example, sustainability is kind of like safety. Safety is not relegated to one department. Safety is in all of our jobs. Sustainability is in all of our jobs. So that was the first thing, kind of getting kind of a group alignment on what we're here to do. Setting the three bold goals, that was the next challenge, which is which goals are we going to pick? There's lots of opportunity out there. Which ones are we going to go for? How big, how bold? Can we achieve it? Should we set an achievable goal or should we set a goal that's just out of reach? So that was new territory for us. You can read all about it, but it's what are you going to do kind of in your own business? It really comes down to leadership. So really glad to be able to have the support of the CEO and the CFO to set really great goals, bold goals for us. Then organizing a cross-functional council, that was the first thing. It's one thing to have a collective agreement on what we want to do, but without the discipline and like I said, these operating principles, we're never going to get there. Passion is one thing, but passion with a plan drives progress, and so being able to have a charter, being able to have clear inputs, clear outputs, clarity of accountability and capabilities and resources, that is that framework, putting that together has been a challenge, but totally, totally important to start with. I guess the last thing I would say is the challenge is simplifying the scope, constantly asking yourself, what is a simpler problem I need to solve? Because you can quickly get into boiling the ocean, and it won't get you anywhere. So it's really important to kind of just continue to simplify what problems you're trying to solve and order them in a way that always has you working on that 20% of maximum impact. Maybe the other side of that question, as you mentioned, Amyris has been in existence for a long time. They've been doing a lot of this stuff for a long time. Was there anything, any accomplishments of the company that you maybe want to highlight that you included when you were thinking about sort of framing up that ESG strategy? Yeah. I mean, like I said, we had such a great, you're right, we had such a great track record of success, and we were set up. Our whole reason of being was to create, to transition the world to sustainable consumption. That's our mission, right? That's why we're here. So it's not like we're a company and we also need to kind of do what we do, but in a sustainable way. What we do is driving sustainability. So plenty of accomplishments. I think the Bonsucro certification is a really big deal. Having our feedstock, that renewable crop that we use for all of our ingredients and all of our fermentation to get that certification from Bonsucro is really important that it designates it from a third party, that it's ethically and sustainably sourced. And the other thing is I think our Lab-to-Market™ operating system, being able to demonstrate that by fermenting molecules and creating ingredients with new technology, we can use less water, less land, and create fewer GHGs. I think being able to articulate that with data in the report was awesome. Great to be able to highlight that even our building. So Amyris's corporate headquarters in Emeryville, California, is LEED Silver certified and includes four on-site cogeneration power units. Our lab in Emeryville is Platinum Level certified lab through My Green Lab, which is a platform that recognizes outstanding work in reducing environmental impact of lab operations. The partnership with Carbonf und, that's important, right, to purchase carbon credits by offsetting. I think it was 30 metric tons in our report, which is the equivalent of, I think it was like, I can't remember now actually, but it was like hundreds of thousands of customer orders reducing millions of air miles of carbon emissions. But I think the takeaway was that although we did that partnership with Carbonf und and we think it's good, and I think we should continue to do that, that's not going to be how we're going to get to net zero. We really want to focus on reduction, a really meaningful reduction, not just buying offsets to kind of give ourselves a really good report. I think some of the work that we do with Raízen, which is our partner in Brazil, is fantastic. So we use bagasse, which is not to get too technical, but it's a byproduct of converting sugarcane into sugar. We use that to power cogen plants in Brazil. We also use the spent or leftover yeast. It's called vinasse, and we use that as fertilizer. So we're really trying to get to this complete kind of circular kind of economy, this full zero impact of environmental, full zero environmental impact with how we manufacture our products. So that was all really great. We were able to highlight and explain. But then on the social side, we've got some really great wins. 50% of our workforce is women. We had a 33% increase in Black representation in 2020. We launched new learning series around unconscious bias. And this was all during kind of the BLM movement. And so we had a ton of engagement, and we have continued to have a ton of engagement. We partnered with HBCUs, and we donated $180,000 for scholarships. And we've changed our recruiting practices to continue to diversify our workforce. So really proud of that. Gender pay ratio was really good. We improved from 1.04 male to female to 1.05 to 1. So that was really good. Sorry, 1.05 in 2019, 1.05 to 1 in 2019 to 1.04 to 1 in 2020. So a slight improvement, and we're continuing to improve. I'm looking forward to what the improvements will be in our 2021 report, which will come out this summer as well. And then a whole bunch of donations. So all through this COVID pandemic, we're really proud of the community donations that we made. We made donations through each of our products. So we have a sweetener called Purec ane. It's a zero-calorie natural sweetener, and it's a replacement for sugar. And we partnered with Feeding America, and we enabled roundup purchases on our website, direct-to-consumer purchase. And we were able to feed 4,000 families with Feeding America. We donated 21,000 units of sanitizer to the front lines in New York and California hospitals, and on and on and on. So lots of social wins for us, which is really, really important. And especially when you're going through a pandemic and you've got a workforce that we were deemed an essential company. So we had people going back into the labs working. And through all of that, to be able to give back to the community is really fantastic. So clearly a lot to highlight in terms of accomplishments. When you think about, you mentioned you went through the exercise of figuring out for your forward-looking goals, sort of what's the most material components for the business. Can you maybe outline what some of the most important forward-looking targets are for the company and maybe how you think about achieving those? So first of all, I think our ambitions are kind of separated into two distinct but parallel paths. The first path is leading the way to a more external sustainable future. That means providing goods to the end user that are more sustainable than that of our competition. And the second path is leading the way to a more internal sustainable future. This is aligned with our goal for Net Zero for 2030. We're dedicated to reducing the impact of our operations on the environment and promoting sustainability at all levels of the organization. So we're starting with a greenhouse gas inventory this year, which is scopes one through three, which is awesome. And then we address the emission sources one at a time to work towards our net zero goal. It's simple but highly effective. We're really focused, like I say, on actual reduction, even though we do participate in offsets. So I guess on that point on emissions disclosure, the SEC recently came out with some proposed rulemaking around this. Somebody who just sort of recently went through the exercise of putting this framework in place, curious what your thoughts on this and maybe just generally the practical steps towards implementation should these rules get finalized? Yeah. I mean, as a company, we already disclose information about climate-related risks, and we're prepared to disclose whatever else the SEC requires. Again, this company was established on the pillars of sustainability. We've been following this development for some time. We're prepared for the emerging regulatory requirements. We support increased ESG transparency, and we're hopeful that the regulation helps us smooth out some of the bumps associated with the currently kind of fragmented reporting frameworks. Right now, we're working to satisfy a half dozen rating and reporting agencies, all of which have a different view on what sustainability reports should look like. You and I talked before this session, Mark, about kind of parallels between other industries and this growth spurt that we're kind of going through with regulation. Can you imagine the same philosophy that we're going through right now with ESG applied to accounting principles? It's our view that a harmonized reporting system would enable the stakeholder community to make consistent comparisons of companies in ESG terms, much like investors are able to use generally accepted accounting methods to make similar comparisons in financial terms, but what we're really focused on right now is just delivering our plan. In addition to SASB and GRI, Amyris endeavors to disclose using the frameworks that are considered the most important by the company's key stakeholders, so we're going to set science-based targets this year. We're also going to leverage the framework established by the Task Force on Climate-related Financial Disclosures, and in the meantime, we're going to continue to maximize use of our buildings and facilities through renewable energy, review our sustainability practices and energy efficiency continually, target carbon-neutral customer shipping for all direct-to-consumer. All these efforts should make whatever SEC disclosure is required straightforward for Amyris as far as compliance. We're relaxed about it and energized. Let's go. And just before we wrap up, I also want to ask about your approach towards integrating ESG throughout the organization. You talked about this. It sounds like something that was very important to your approach when you started in your role. So maybe if you could just elaborate on maybe some tips for success when doing that. Yeah. Like I said, passion is one thing, but passion with a plan is a whole other thing, and that's what we need. So at Amyris, our key challenge is to deliver our plans with speed and agility in the face of the growth that we have. We have effectively broken down the silos in our organization and focused on our core goals through the establishment of a cross-functional ESG council. It's not the entire story, but our council is only as effective as its parts. But essentially, we identified key influencers across the organization. We articulated clear responsibilities for this council, and we agreed that all of the work to achieve our ESG goals was going to be done outside of the meeting. And the meetings were only used to help us constantly recalibrate resources, flag risks, dial up or dial down efforts as needed as market conditions change or other factors or risks emerge. And so that has been we started that late last year, and it has been fantastic. It has helped us drive real change and, importantly, I think, give people a sense of empowerment that they can go away and get stuff done and come back and talk about what they're doing. And it has a building effect in terms of energy and momentum internally. It's so far so good. That's what I can report. So far so good. And last question. We have a couple of minutes left here. So, you've communicated all this to investors now. Curious, your thoughts on how the feedback has been, what types of questions maybe you've been getting, or what investors care about the most? So pleased that Amyris has a dedicated executive role on sustainability. It's not just symbolic in their opinion. From the feedback we have received, it is a necessary step and demonstrates real leadership. So great. Pleased that Amyris's approach is progress, not perfection. I don't know who they're talking to, but I guess there's some people who claim perfection, and that doesn't go over so well. So having kind of a bit of humility and talking about the fact that we've got a lot of work to do, just like everybody else, has been really positive feedback, and it has gone to help us have really good conversations around their observations of what's going on in the world of ESG investing and some of the things that they care about, which then gives us an opportunity to rethink how we think about going after some of the challenges or the opportunities that we see in front of us. So having that open dialogue and trust is really good. And then questions they ask around next steps, how are we sequencing the priorities? And basically, it's pretty straightforward. We talk about our methodology, which I just kind of ran through earlier. And we also just have a relentless and ruthless approach to focusing on that 20% that's actually going to move the needle. And we also kind of clean up a lot of the easy stuff. It's pretty amazing how just some of the basic stuff, like having a policy in place or demonstrating your ability to enforce a policy, just by not having something articulated, really goes a long way with investors. So there's easy stuff that you can do, and then there's the really hard stuff like net zero that you have to drive with the help of your operational teams. And so it's a mix. And so, yeah, we just prioritize both, and we just take it six months at a time. Wonderful. Well, I think we'll end it here, but thank you so much, Beth, for your time, and thanks everybody on the line for joining. Thanks, Mark.