Scope 1 Emissions
2022 Communication on Progress
L'OREAL
Published date
September 5, 2022
No. of questions
63
Supplemental files
L'Oréal speakup policy.pdfLoreals Corruption Prevention Policy.pdfL'Oréal Human Rights Policy.pdfMutual Ethical Commitment Letter ENG.pdfSuppliers subcontractors and child labour.pdfThe Way We Buy.pdfcode-of-ethics-english.doc.pdfAgreement_on_the_Supply_of_Goods_and_Services_-_ASGS_FR-EN_160320.pdfLOREAL_Document_Enregistrement_Universel_2021_fr_0.pdfLOREAL_Document_Enregistrement_Universel_2021_fr_0.pdfEthics charter child labor.pdfSuppliers subcontractors and child labour.pdfcode-of-ethics-english.doc.pdfL'Oréal employee human rights policy.pdfL'Oréal Human Rights Policy.pdfMutual Ethical Commitment Letter ENG.pdfLOREAL FOR THE FUTURE 2030 FOREST POLICY.pdfLOREAL FOR THE FUTURE BOOKLET.pdfLa Politique Loreal De Prevention De La Corruption.pdfMECL FR Lettre dEngagement Ethique Mutuel com final.pdfPolitique Droits Humains Collaborateurs.pdfCEO Statement
Signed
Governance
Policies and Responsibilities
1. Does the Board / highest governance body or most senior executive of the company:
Optional commentThe Board of Directors determines L’Oréal’s strategic directions, which integrate the challenges of climate change and, more generally, the issues of sustainable development, as well as the Group’s sense of purpose (raison d’être) to “Create the Beauty that moves the world”. In order to monitor the determination and successful implementation of these strategic directions, the Board of Directors can rely on its four Board Committees that are responsible for investigating the issues within their area of expertise in the determination and monitoring of the non-financial strategy2. Does the company have a publicly stated commitment regarding the following sustainability topics?
Optional commentIn the context of the first generation of Sharing Beauty with All commitments, the Group defined a number of indicators tracked to evaluate monthly and annually the progress, achieved on the targets set for 2020. As a result of the acceleration of the environmental challenges, these indicators were reassessed and completed at the time of the June 2020 launch of the new sustainability programme L’Oréal for the Future. They cover the Group’s entire value chain in the areas of greenhouse gas emissions, water, biodiversity, resources and waste, and support the goals for 2030.3. Does the company have in place a code of conduct regarding each of the following sustainability topics?
Optional comment• Privacy Policy • Responsible Lobbying Policy • Code of Ethics - The Way We Work • Code of Business Ethics - Suppliers & Subcontractors and Child Labour • L'Oréal Employee Human Rights Policy • Mutual Ethical Commitment Letter • L'Oréal Human Rights Policy • L'Oréal for the Future - 2030 Forest Policy • L'Oréal for the Future4. Has the company appointed an individual or group responsible for each of the following sustainability topics?
Optional comment• Board of Directors determines L’Oréal’s strategic directions, which integrate the challenges of climate change and, more generally, the issues of sustainable development, as well as the Group’s sense of purpose (raison d’être) to “Create the Beauty that moves the world”. In order to monitor the determination and successful implementation of these strategic directions, the Board of Directors can rely on its four Board Committees that are responsible for investigating the issues within their area of expertise in the determination and monitoring of the non-financial strategy • The Executive Committee works with the CEO to implement strategic directions regarding nonfinancial matters. Status updates on sustainable development issues are conducted regularly to define and implement the necessary action plans. A network of sustainability leaders, members of the Management Committees is responsible for the operational deployment of the L’Oréal for the Future programme in each Division, each geographic Zone and each entity. • The Chief Corporate Responsibility Officer ensures strategic consistency between the measures, the Group takes to integrate sustainable development across its entire value chain and its charitable contributions. She is responsible for the formulation and implementation of the sustainable development strategy, assesses and manages risks and opportunities related to environmental and societal challenges at Group level through the action plans of the sustainability programmes (Sharing Beauty with All and, now, L’Oréal for the Future). • Internal Committees related to sustainable development, composed of the experts responsible for the deployment of the programme, define the roadmaps for each of the entities represented (Operations, Research, Divisions, Zones). Each of the internal Committees defines annual objectives and directs their deployment throughout the L’Oréal value chain.nternal Committees related to sustainable development, composed of the experts responsible for the deployment of the programme, define the roadmaps for each of the entities represented (Operations, Research, Divisions, Zones). Each of the internal Committees defines annual objectives and directs their deployment throughout the L’Oréal value chain.5. Does the company have a formal structure(s) (such as a cross-functional committee) to address each of the following sustainability topics?
Optional comment• Board of Directors determines L’Oréal’s strategic directions, which integrate the challenges of climate change and, more generally, the issues of sustainable development, as well as the Group’s sense of purpose (raison d’être) to “Create the Beauty that moves the world”. In order to monitor the determination and successful implementation of these strategic directions, the Board of Directors can rely on its four Board Committees that are responsible for investigating the issues within their area of expertise in the etermination and monitoring of the non-financial strategy • The Executive Committee works with the CEO to implement strategic directions regarding nonfinancial matters. Status updates on sustainable development issues are conducted regularly to define and implement the necessary action plans. A network of sustainability leaders, members of the Management Committees is responsible for the operational deployment of the L’Oréal for the Future programme in each Division, each geographic Zone and each entity. • The Chief Corporate Responsibility Officer ensures strategic consistency between the measures, the Group takes to integrate sustainable development across its entire value chain and its charitable contributions. She is responsible for the formulation and implementation of the sustainable development strategy, assesses and manages risks and opportunities related to environmental and societal challenges at Group level through the action plans of the sustainability programmes (Sharing Beauty with All and, now, L’Oréal for the Future). • Internal Committees related to sustainable development, composed of the experts responsible for the deployment of the programme, define the roadmaps for each of the entities represented (Operations, Research, Divisions, Zones). Each of the internal Committees defines annual objectives and directs their deployment throughout the L’Oréal value chain.nternal Committees related to sustainable development, composed of the experts responsible for the deployment of the programme, define the roadmaps for each of the entities represented (Operations, Research, Divisions, Zones). Each of the internal Committees defines annual objectives and directs their deployment throughout the L’Oréal value chain.Prevention
6. Does the company have a process or processes to assess risk?
Optional commentURD 2021 – Risks and Applicable Rules for the prevention of serious violations of Human Rights and Fundamental Freedoms – P.145 Following an initial analysis conducted in 2017, the Group wanted to expand its mapping in 2020 by identifying the salient Human Rights risks. To do so, L’Oréal relied on the reporting framework of the Guiding Principles on Business and Human Rights (UNGP Reporting Framework). This identification- process takes into consideration the severity, scale, remediability and likelihood of its impact on people. The identification process at global level and in 27 markets was finalised in 2021. This study was conducted with an NGO specialising in the area, providing independent analysis. As a result of this analysis, the following salient risks were identified in the context of the application of the French Law on Duty of Vigilance: • the risk of child labour among the employees of the Group’s Suppliers; • the risk of forced labour among the employees of the Group’s Suppliers; • the risk of job discrimination because of gender, age, disability, gender identity and sexual orientation of the employees of L’Oréal and the employees of the Group’s Suppliers; and • the risk of a lack of decent living wage for the employees of the Group’s Suppliers. Another risk identified concerns the Human Rights of communities potentially impacted by the Group’s activities (respect for the environment, right of access to water, consideration of Human Rights in the choice of raw materials and, in particular, the right of access of local populations to their land and respect for their traditional knowledge under the Nagoya Protocol).6.1. During the assessment of risk, which business relationships are reviewed?
7. Does the company have a due diligence process through which it identifies, prevents, mitigates, and accounts for actual and potential negative impacts on sustainability topics?
Optional commentURD 2021 - A worldwide audit programme. p.185 • In order to ensure compliance with the Group’s EHS policy, a system of worldwide audits has been set up since 1996, and was reinforced in 2001 with the presence of external auditors, who are experts in local contexts and regulations. These audits- take place regularly at all L’Oréal sites: every three years for production sites and every four years for distribution centres, administrative sites and research centres. A follow-up visit is scheduled for the following year for the sites where it is necessary. Two types of audits known as “risks” or “culture” are performed depending on the maturity and type of activity at the sites. The risks audits primarily assess. • Social audits: Since 2002, all of the Group’s suppliers have had to sign the Letter of Ethical Commitment. This letter sets out the suppliers’ requirements and commitments in accordance with the Group’s programmes and policies concerning ethics, corporate responsibility, Human Rights, and compliance. In 2021, the Group released an updated version of this document, now entitled the “Mutual Ethical Commitment Letter”, which highlights the mutual commitment between L’Oréal and its suppliers. This document covers, in particular, the issues of Human Rights and working conditions. The letter is being rolled out gradually to all suppliers worldwide. The Group’s subcontractors and its suppliers of raw materials, packaging, production equipment and POS/promotional advertising items located in countries identified as being at risk according to Verisk Maplecroft are subject to a mandatory social audit (and prior to any inclusion on the supplier panel) aimed notably at ensuring compliance with applicable laws, Human Rights and labour law. This audit also covers employee safety and working conditions, and the way in which the impact of activities on the environment is taken into account. The social audits are carried out on behalf of L’Oréal by independent external service providers. The initial audits and re-audits three years later are financed by the Group. Follow-up audits that make it possible to verify the effectiveness of the action plans are paid for by the suppliers. • Third-party organisations Flocert or Intertek : L’Oréal chose to have its gender equality practices and policies audited and relies on two independent organisations to measure and assess the situation of its subsidiaries: Gender Equality European & International Standard (GEEIS) and Economic Dividend for Gender Equality (EDGE)7.1. During the due diligence process, which business relationships are reviewed?
Optional commentURD 2021 - Monitoring compliance with the Plan - p.152 The risk hierarchy is used to enhance controls on compliance with the Applicable Rules by defining procedures for monitoring compliance with the Rules that are adapted to the risks, including a policy of third-party audits. Other means of control are also used, such as monitoring and evaluation of Suppliers conducted by third-party companies such as EcoVadis. • With respect to the Subsidiaries, the risk hierarchy of non‑compliance with the Applicable Rules was created taking into account the type of activity (administrative, processing, warehousing, etc.) and, thereafter, the type of Site (administrative offices, factories, distribution centres, research centres, etc.). • With respect to the Suppliers, the risk mapping of noncompliance with the Applicable Rules was created for Human Rights, Fundamental Freedoms, the environment, and health and safety in the workplace using a methodology that takes the following parameters into account: The country in which the Supplier’s sites are located, The business sector, The nature of operations.Concerns and grievance mechanisms
8. Are there any processes through which members of the company’s workforce can raise concerns about the company’s conduct related to human rights, labour rights, environment, or anti-corruption?
Optional comment• URD 2021 - Whistleblowing mechanism and reporting system – P.155 L’Oréal’s “Speak Up” policy enables employees and external stakeholders to report serious violations of Human Rights and fundamental freedoms, non-compliance of rules relating to the health and safety of people and respect for the environment, notably via a secure website (ethics whistleblowing channel) directly to the Chief Ethics, Risk and Compliance Officer. • Employee Human Rights Policy – Article 11. P.13 We provide accessible reporting mechanisms, namely via L’Oréal’s secure Speak Up website. www.lorealspeakup.com We promote the proper use of these mechanisms so that all L’Oréal employees can report suspected incidents of Human Rights abuse. Confidentiality and protection from retaliation is guaranteed to those who use these mechanisms in good faith. Both Speak Up and this policy are available in many languages. Suspected incidents of Human Rights abuse are immediately escalated to the Chief Ethics Officer, investigated and action is taken when necessary. We apply fair, reasonable and legal disciplinary practices. • Palm Alert Procedure This procedure includes 4 steps : Compaint reception or identification, compalint analysis, implementation of an action plan for remediation, palm alert monitoring and resolution.8.1. Please provide additional detail regarding the process(es) the company has through which members of the company’s workforce can raise concerns about the company’s conduct.
Optional commentURD 2021 - Speak Up policy. p.247 L’Oréal’s Speak up policy, running since 2008, enables employees to report serious violations of Human Rights and Fundamental Freedoms, health and safety of people and respect for the environment, notably via a secure Internet site (ethics whistleblowing channel) directly to the Chief Ethics, Risk and Compliance Officer. The Group’s ethics whistleblowing channel (www.lorealspeakup.com) has also been accessible to all Group stakeholders since 2018. This procedure is available in all languages La procédure est disponible dans toutes les langues : https://www.loreal.com/fr/articles/commitments/speak-up-policy/9. Does the company provide or enable access to effective remedy to right holders / stakeholders where it has caused or contributed to the adverse impact?
Optional commentAudits specific to Suppliers There are three types of audits: • initial audits (first audits conducted) are a prerequisite to the start of the relationship with a new Supplier; • follow-up audits (audits done 12 to 24 months maximum after the immediate improvement request (Needs Immediate Action or NIA), depending on the severity of the non-conformities found); and • confirmation audits, three years after the initial audit. The possible outcomes of the audits are as follows: • Satisfactory: all criteria conform to the Applicable Rules and the best practices are highlighted; • Needs Continuous Improvement (NCI): minor nonconformities were found, but they do not have an impact on employee safety or health; • Needs Immediate Action (NIA): non-conformities are reported either because they are serious, because they are recurring or because they have a potential impact on the health and safety of employees; • Zero Tolerance (ZT): reported, for example, in the event of a critical non-conformity because of child labour, forced labour, physical abuse, restricted freedom of movement, an immediate risk of accident for employees or attempted bribery of the auditors; and • Access Denied: reported when the audit is refused (for example in the event of refusal to provide partial or full site access to the auditors). In the event of a non-conformity (Needs Continuous Improvement, Needs Immediate Action, Zero Tolerance), corrective action plans must be implemented which are then audited at the level of the Subsidiary or Supplier. Failure to implement a corrective action plan can, in the case of a Subsidiary, result in an alert being sent to the Country Manager. In addition, Subsidiaries can decide to link part or all of the remuneration of their managers and/or of their performance evaluation to the implementation of the Applicable Rules.Lessons
10. How does the company capture lessons regarding each of the following sustainability topics?
Executive Pay
11. Is executive pay linked to performance on one or more of the following sustainability topics?
Optional commentURD 2021 - Remuneration policy for directors and corporate officers. p.96. under the 19th resolution submitted for approval by the Annual General Meeting of 21 April 2022, the remuneration policy for the executive corporate officer provides for the inclusion of criteria for non-financial performance in addition to financial performance within the long-term remuneration plan, in order to correlate them with L’Oréal’s strategy in which economic and social performance go hand-in-hand. URD 2021 - CRITERIA FOR ASSESSMENT OF PERFORMANCE FOR 2021. p.412 The annual variable remuneration is designed to align the executive corporate officer’s remuneration with the Group’s annual performance and to promote the implementation of its strategy year after year. The Board of Directors strives to encourage the executive corporate officer both to maximise performance for each financial year and to ensure that it is repeated and regular year-on-year. The quantifiable, financial (60%) and non-financial (25%) criteria account for 85% of annual variable remuneration. The weighting of each of these criteria, both financial, non-financial and qualitative, and the targets to be met were set at the start of the year and communicated to the executive corporate officer. The assessment is made without offsetting among criteria. Pursuant to Article L. 22-10-34 (formerly L. 225-100) of the French Commercial Code, payment of the annual variable remuneration will be conditional on approval by the Annual General Meeting called to approve the 2021 financial statements. Financial criteria 60% Evolution in like-for-like sales as compared to the budget 15% Evolution in market share as compared to the main competitors 15% Evolution in operating profit as compared to the budget 10% Evolution in net earnings per share as compared to the budget 10% Evolution in cash flow as compared to the budget 10% Non-financial and qualitative criteria (40%) / Quantifiable criteria: 25% + Individual qualitative performance: 15% - Quantifiable criteria: 25% L’Oréal for the Future: sustainable development commitments for 2030 : 10% Human Resources: gender parity, development of talented employees, access to training 7.5% Digital development 7.5% - Individual qualitative performance: 15% Management 7.5% Image, company reputation, dialogue with stakeholders 7.5%Board Composition
12. Percentage of individuals within the company’s Board / highest governance body by:
Optional commentURD 2021 - COMPOSITION OF THE BOARD OF DIRECTORS. P.57 M. Jean-Paul Agon M. Nicolas Hieronimus Mme Françoise Bettencourt Meyers - Vice-Présidente M. Jean-Victor Meyers M. Nicolas Meyer M. Paul Bulcke - Vice-Président Mme Béatrice Guillaume-Grabisch Mme Sophie Bellon M. Patrice Cain Mme Fabienne Dulac Mme Belén Garijo Mme Ilham Kadri Mme Virginie Morgon M. Alexandre Ricard Mme Ana Sofia Amaral M. Georges Liarokapis13. Do you produce sustainability reporting according to:
Data Assurance
14. Is the information disclosed in this questionnaire assured by a third-party?
Human Rights
Materiality / Saliency
1. Which of the following has the company identified as material human rights issues connected with its operations and/or value chain, whether based on their salience (i.e., the most severe potential negative impacts on people) or another basis?
Optional commentURD 2021 –Risks and Applicable Rules for the prevention of serious violations of Human Rights and Fundamental Freedoms – P.145 Following an initial analysis conducted in 2017, the Group wanted to expand its mapping in 2020 by identifying the salient Human Rights risks. To do so, L’Oréal relied on the reporting framework of the Guiding Principles on Business and Human Rights (UNGP Reporting Framework). This identification process takes into consideration the severity, scale, remediability and likelihood of its impact on people. The identification process at global level and in 27 markets was finalised in 2021. This study was conducted with an NGO specialising in the area, providing independent analysis. As a result of this analysis, the following salient risks were identified in the context of the application of the French Law on Duty of Vigilance: • the risk of child labour among the employees of the Group’s Suppliers; • the risk of forced labour among the employees of the Group’s Suppliers; • the risk of job discrimination because of gender, age, disability, gender identity and sexual orientation of the employees of L’Oréal and the employees of the Group’s Suppliers; and • the risk of a lack of decent living wage for the employees of the Group’s Suppliers. Another risk identified concerns the Human Rights of communities potentially impacted by the Group’s activities (respect for the environment, right of access to water, consideration of Human Rights in the choice of raw materials and, in particular, the right of access of local populations to their land and respect for their traditional knowledge under the Nagoya Protocol).Commitment
2.1. For each human rights policy, is it:
Optional commentURD 2021 - Business risks/Information and cybersecurity systems. p. 160 The Global IT Department has introduced strict security rules for infrastructures, equipment and applications. Furthermore, in order to adapt to the development of new methods of communication and collaboration, L’Oréal has introduced an Information and Communication Technologies Code of Practice. To address the growing threat of cybercrime, L’Oréal takes continuous steps to strengthen the resources dedicated to information system security. This plan relies in particular on anti-intrusion equipment, regular intrusion tests, an information system security audit programme, the protection of sensitive equipment and global supervision to identify irregularities. L’Oréal’s security focus is constantly adjusted to deal with new threats of cyberattacks. For example, the Group is increasingly investing in incidents detection and reactions systems and proceeds to regular reviews of the effectiveness of these solutions. In addition, in order to mobilise all teams, the Group conducts a global awareness campaign every year. Online training in best cybersecurity practices is available for all employees. As at 31 December 2021, 82% of employees had validated this e-learning programme. Management of risks related to data is described in the “Data” risk section.risque « Données »Response
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the human rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
URD 2021 - Constant dialogue with stakeholders. p.175 In 2021, L’Oréal: ● joined Unstereotype Alliance, an initiative led by companies convened by UN Women to eradicate harmful stereotypes in advertising; ● joined the Better Business Through Better Wages call to action launched by IDH - The Sustainable Trade Initiative to promote a living wage; and ● supported the Business for Inclusive Growth (B4IG) coalition’s campaign to incorporate the living wage into the debate on sustainable development. URD 2021 - Training on Human Rights and fundamental freedoms. p. A specific, compulsory ●A specific, compulsory e-learning course on ethics covers Human Rights and fundamental freedoms issues. In addition, new buyers receive compulsory training on Responsible Purchasing to learn about how to ensure respect of the Group’s Ethical Principles. An e-learning course on Supplier audits, detailing the applicable audit procedure, is also available for all buyers. A Suppliers version is available on the same website as the above information. There is also an e-learning course available called “Ethics e-learning for business partners”.Labour
Commitment
1. Does the company have a policy commitment in relation to the following labour rights principles?
Optional commentMutual Ethical Commitment Letter Code of Business Ethics - Suppliers & Subcontractors and Child Labour L'Oréal Human Rights Policy L'Oréal Employee Human Rights Policy Code of Ethics - The way we work Forest Policy1.1. For each labour rights policy, is it:
Optional commentURD 2021 - Constant dialogue with stakeholders. p.175 The Human Rights Department is engaged in a dialogue and partnerships with outside stakeholders, including NGOs, institutions, and associations specialised in this area. Thus, L’Oréal maintains a partnership with: ● the Danish Institute for Human Rights, the independent national Human Rights institution of Denmark; ● Fair Wage Network, an NGO based in Geneva which provides the Group with a database on living wages in 200 countries and assists it in defining its strategy for deployment in operations and with strategic suppliers; ● The SciencesPo Law School clinic; and ● the United Nations Global Compact. In addition, L’Oréal joined: ● the Shift Business and Human Rights Learning Programme at Harvard; ● the Human Rights Coalition of the Consumer Goods Forum; and ● Open for Business, a coalition of companies committed to LGBTQIA+ inclusion. In 2021, L’Oréal: ● joined Unstereotype Alliance, an initiative led by companies convened by UN Women to eradicate harmful stereotypes in advertising; ● joined the Better Business Through Better Wages call to action launched by IDH - The Sustainable Trade Initiative to promote a living wage; and ● supported the Business for Inclusive Growth (B4IG) coalition’s campaign to incorporate the living wage into the debate on sustainable development.Prevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following labour rights issues?
Optional commentURD 2021 - Constant dialogue with stakeholders. p.175 The Human Rights Department is engaged in a dialogue and partnerships with outside stakeholders, including NGOs, institutions, and associations specialised in this area. Thus, L’Oréal maintains a partnership with: ● the Danish Institute for Human Rights, the independent national Human Rights institution of Denmark; ● Fair Wage Network, an NGO based in Geneva which provides the Group with a database on living wages in 200 countries and assists it in defining its strategy for deployment in operations and with strategic suppliers; ● The SciencesPo Law School clinic; and ● the United Nations Global Compact. In addition, L’Oréal joined: ● the Shift Business and Human Rights Learning Programme at Harvard; ● the Human Rights Coalition of the Consumer Goods Forum; and ● Open for Business, a coalition of companies committed to LGBTQIA+ inclusion. In 2021, L’Oréal: ● joined Unstereotype Alliance, an initiative led by companies convened by UN Women to eradicate harmful stereotypes in advertising; ● joined the Better Business Through Better Wages call to action launched by IDH - The Sustainable Trade Initiative to promote a living wage; and ● supported the Business for Inclusive Growth (B4IG) coalition’s campaign to incorporate the living wage into the debate on sustainable development.3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with this labour rights issue?
Optional comment● URD2021 - Incorporating suppliers’ environmental and social performance into their selection and assessment. p.201. The Group has decided to use the environmental and social performance of its partners and suppliers as a key selection criterion. On this basis, the commitments under the Sharing Beauty With All programme, and now the L’Oréal for the Future programme, fit in with and follow on from those in the Group’s responsible purchasing policy initiated in 2002 with the L’Oréal Buy & Care programme. L’Oréal has published a new sustainable Sourcing strategy, which builds on the previous strategy and focuses on four pillars: protection of Human Rights, preservation of the environment and resources, the integrity of business relationships and diversity and inclusion. For each pillar, the commitments, targets, values and standards that L’Oréal shares with its suppliers are set out. These targets have been designed with external experts on the basis of recognised benchmarks. The tools for monitoring progress are also specified. This strategy provides a common framework for integrating these issues into the heart of the business model and taking action to achieve sustainable performance. These pillars form the basis for daily performance and long-term strategies. A global scorecard has been deployed for all purchasing fields and makes it possible to accurately measure supplier results, in particular their compliance with their corporate social responsibility commitments which represent 20% of the final assessment. The CSR strategy and action plans of the suppliers are fully integrated into their relationship with L’Oréal and are therefore discussed at strategic meetings (Business Reviews). ● CODE OF BUSINESS ETHICS: SUPPLIERS/SUBCONTRACTORS AND CHILD LABOUR ● URD 2021 - Child labour. p.145 L’Oréal’s presence in certain regions of the world that are particularly at risk for child labour, including Asia and Latin America, has led the Group to identify this issue as a priority. To take into consideration the vulnerability of young workers, L’Oréal has set the minimum hiring age at 16 years old. The Subsidiaries and Suppliers are required to check the age of all new employees upon hire. L’Oréal prohibits night work and work hazardous to health and safety for employees younger than 18 in its Subsidiaries. L’Oréal requires that its Suppliers comply with this standard. ● Mutual Ethical Commitment Letter The Group’s suppliers must sign an ethical commitment letter that sets out its requirements and commitments to its suppliers. In 2021, the Group published an updated version, the Mutual Ethical Commitment Letter, which highlights the mutual commitment between it and its suppliers. This document covers, in particular, Human Rights and working conditions. This new version is being rolled out gradually with all suppliers worldwide. "In accordance with our Code of Ethics and as a supporter of the United Nations Global Compact, L’ORÉAL actively seeks out and favours business partners who share our ethical standards with regards to human rights, working conditions, environmental stewardship and business integrity. We are committed to supporting business partners in meeting these standards whilst having the courage, if necessary, to end relationships with those who are unwilling to meet them. We do realise that ensuring high ethical standards within your supply chain can be challenging. We do not ask from you what we are not willing to do ourselves and we are willing to support you in reaching such standards if this is not yet the case. The ethical standards described below are the same as those applied in our own entities throughout the world."4. Who receives training for the following labour rights issues?
Optional comment● An e-learning module is available to all purchasers in addition of the Sourcing Discovery training module, which explains to every new purchaser the importance of the social audit programme, and how purchasers must make it part of their daily process ● In 2021, 145 purchasers were trained in responsible purchasing practices. This training is compulsory for any new purchaser. 100% of the Group’s subsidiaries included issues related to Human Rights in their local training programme. ● The deployment of online training (prevention of corruption, data security, competition, cyber security, personal data protection) is ongoing. ● Training sessions dedicated to L’Oréal’s EHS policy and practices have been provided at all levels of the Company, as well as for temporary workers and subcontractors working on Group sites. They constitute one of the cornerstones in the implementation of risk identification and management systems, and the deployment of the EHS culture in all Group entities. EHS training includes the various training actions for health and safety in the workplace, or the environment and covers general EHS training, EHS training by business line and specific EHS training. General EHS training includes: - core general training completed, for example, when a new employee arrives at a Site (L’Oréal employee or temporary staff) regardless of their position; and - fire safety training, first aid, pollution prevention, recycling, general EHS awareness raising, etc. EHS business training refers to training specific to a given métier area or activity (for example, all of the filling and packing staff of a factory). Specific EHS training refers to EHS training for a particular workstation and the activities carried out by the employee. ● Training on Human Rights and fundamental freedoms: A specific, compulsory e-learning course on ethics covers. Human Rights and fundamental freedoms issues. In addition, new buyers receive compulsory training on Responsible Purchasing to learn about how to ensure respect of the Group’s Ethical Principles. An e-learning course on Supplier audits, detailing the applicable audit procedure, is also available for all buyers. A Suppliers version is available on the same website as the above information. There is also an e-learning course available called “Ethics e-learning for business partners”. URD 2021 - Learning in the service of the Group’s business challenges. p.236 Training is central to the Company’s major transformations: the challenges of CSR, the digital revolution, which impacts all jobs, the transformation of marketing, the acceleration of ecommerce and the changes in working conditions and managerial practices. The Digital Upskilling training programme launched in 2015 is one of the pillars of the Group’s digital acceleration strategy. This programme, which has benefited more than 60,000 employees, has developed in order to support the development of essential new skills, around two major components: • integrating digital competencies into all of the Group’s training plans, particularly within the “L’Oréal University for Marketing”; and • consolidating the new skills necessary for the digital transformation, particularly in e-commerce, with the launch of the “L’Oréal University for e-Commerce” in 2022, guaranteeing the best training offering in this field. In the context of the transformation towards Beauty Tech, engaging all employees is a priority for the Group. For tech and data experts, L’Oréal offers a personalised training course tailored to the various job roles, which aims to ensure that everyone is able develop their skills in the tech fields of the future (data, artificial intelligence, cyber security, enterprise architecture, etc.). At the same time, opportunities for training in new technologies and data enable all employees to acquire the technological knowledge base required to tackle the challenges of the future and thus contribute to the Beauty Tech transformation. With regard to CSR, L’Oréal launched a training course called “Green Steps” for its teams as part of the launch of the L’Oréal for the Future programme. This programme offers podcast‑based e‑learning modules and webinars with Group experts as well as an online self-assessment called the Green Test. The programme has four components: climate change, water, biodiversity and natural resources. This programme has been rolled out worldwide. At the end of 2021, 41,500 employees had started this programme and 35,000 had already completed it. With regard to Diversity, Equity and Inclusion (DE&I), L’Oréal has developed a training course based on four fundamental pillars: gender equality and the inclusion of LGBTQIA+ people, disability, socio-economic and multicultural background, age and intergenerational issues. Available to all subsidiaries, this course is prioritised for new arrivals and is delivered in a workshop format via a virtual classroom. The DE&I offering is both modular and flexible, with remote and in-person content, which means it can be easily adapted to various local settings.5. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following labour rights issues?
Optional commentURD 2021 - A commitment of the entire organisation. P.246 The Chief Corporate Responsibility Officer has a budget and a dedicated team composed of Human Rights experts. She relies on all the Group’s teams and resources to carry out her work. A dedicated network of Human Rights Correspondents covering all of the Group’s markets allows the Group’s Human,,Rights commitments to be rolled out. The Human Rights Committee, chaired by the Chief Corporate Responsibility Officer and composed of representatives of the various activities, functions and Zones (including Purchasing, HR, CSR, Safety, Security, etc.), allows coordination and exchange on the implementation of the Group’s Human Rights policy. Its primary objective is to enable the emergence of a Human Rights culture within the Group. The Group completed a generic review of the Human Rights issues related to its operational activities and commercial relationships, and identified four groups of impacted stakeholders that inform the Human Rights policy: • the Human Rights of our employees; • the Human Rights of the employees of Group suppliers; • the Human Rights of consumers; and • the Human Rights of communities. In order to achieve its Human Rights goals and face these risks, L’Oréal has been a member of the United Nations Global Compact since 2003, and is committed to respecting all internationally recognised Human Rights. A specific partnership was also signed in 2019 with the Danish Institute for Human Rights to support the Group in the implementation of Human Rights. This commitment to respect Human Rights is supported each year at the highest level of the Company by its Chief Executive Officer, by the Chief Ethics, Risks and Compliance Officer, and by the Chief Sustainability Officer, who also chairs the Group’s Human Rights Committee. URD 2021 - Social audits: a rigorous and continuous improvement process. p.202 A tool to manage social audits organises the planning of all audits with the external service provider’s system and manages all results and action plans for all the suppliers concerned. An e-learning module is available to all purchasers in addition of the Sourcing Discovery training module, which explains to every new purchaser the importance of the social audit programme, and how purchasers must make it part of their daily process. The Group’s purchasers accordingly promote the continuous improvement of their suppliers in line with the Group’s standards. Over 9,300 supplier sites have been audited since the reporting tool was implemented in 2006: • 1,236 audits were carried out in 2021, i.e. more than 14,900 since 2006; • in the context of the Covid-19 health crisis, technical resources were deployed by the Group to organise remote audits of sites and thus guarantee health protection and social compliance. This method of auditing is valid under certain circumstances and remains exceptional. Since 2020, 79 social audits of supplier sites have been organised remotely; • Follow-up audits, which verify the correction of nonconformities, represent 37% of the total number of audits conducted in 2021 and allowed 72% of the suppliers audited to improve their results; and • 98% of supplier production sites requiring audits have been audited at least once. UR 2021 - A worldwide audit programme. p.185 In order to ensure compliance with the Group’s EHS policy, a system of worldwide audits has been set up since 1996, and was reinforced in 2001 with the presence of external auditors, who are experts in local contexts and regulations. These audits take place regularly at all L’Oréal sites: every three years for production sites and every four years for distribution centres, administrative sites and research centres. A follow-up visit is scheduled for the following year for the sites where it is necessary. Two types of audits known as “risks” or “culture” are performed depending on the maturity and type of activity at the sites. The risks audits primarily assess: ● compliance of practices and facilities with the significant requirements of local regulations and Group procedures and rules; ● controls of risks to health, safety and the environment generated by technical equipment, processes and operating modes implemented and used by employees; and ● progress in environmental, health and safety performances. These audits are carried out by external independent experts. The results of these audits give the Group’s General Management objective knowledge of the risks in the areas of EHS on L’Oréal sites and provide the assurance that they are under control. In the same way, within the framework of the culture audits, the leadership of site management, all operational managers, and the deployment level of the EHS culture with all employees are evaluated. These audits are carried out by internal EHS specialists through interviews with at least 20% to 30% of the site’s workforce. The results of these audits provide information on the level of knowledge of EHS management tools and the maturity of audited sites with regard to the safety and environment culture at all structural levels. Depending on the case, EHS audits are exclusively risks or culture audits, audits that combine risks and culture, or even audits that combine risks, culture, quality and performance.Performance
6. What is the percentage of employees covered under collective bargaining agreements?
Optional commentURD 2021 - An active social dialogue with employees and their representatives – P.239 As a signatory of the United Nations Global Compact since 2003, and in compliance with its Employee Human Rights Policy, L’Oréal respects the freedom of association and the right to collective bargaining. In countries where freedom of association and the right to collective bargaining are restricted or non-existent, L’Oréal has implemented other modes of dialogue with its employees that allow them to report their possible concerns. In the context of this general principle, the social climate at L’Oréal is the fruit of an ongoing dialogue between Management, employees and their representatives, in accordance with trade union rights in each country and with a neutral attitude with regard to the various trade union organisations. When employees wish to be represented by authorised employee representatives, these representatives are elected by employees without company interference. Therefore, employee representative institutions are in place in most of the European subsidiaries, in several Asian subsidiaries (China, South Korea, India, Indonesia, Japan and Vietnam), in Africa (South Africa, Kenya and Morocco), in North America and South America (Canada, United States, Argentina, Brazil, Chile, Colombia and Mexico), and also in Australia and New Zealand. Employee representatives have access to the workplace, to consenting employees, to collective bargaining agreements as well as to local documentation useful for the performance of their mission, subject to compliance with Group’s legitimate rules on confidentiality and security. In total, 86% of the Group’s employees work in subsidiaries where there are employee representative councils. 46% of the Group’s employees are covered by a collective agreement and 97% of them are covered by company collective agreements.7. What is the percentage of employees in a trade union or other workers' organization?
Optional commentURD 2021 - An active social dialogue with employees and their representatives – P.239 As a signatory of the United Nations Global Compact since 2003, and in compliance with its Employee Human Rights Policy, L’Oréal respects the freedom of association and the right to collective bargaining. In countries where freedom of association and the right to collective bargaining are restricted or non-existent, L’Oréal has implemented other modes of dialogue with its employees that allow them to report their possible concerns. In the context of this general principle, the social climate at L’Oréal is the fruit of an ongoing dialogue between Management, employees and their representatives, in accordance with trade union rights in each country and with a neutral attitude with regard to the various trade union organisations. When employees wish to be represented by authorised employee representatives, these representatives are elected by employees without company interference. Therefore, employee representative institutions are in place in most of the European subsidiaries, in several Asian subsidiaries (China, South Korea, India, Indonesia, Japan and Vietnam), in Africa (South Africa, Kenya and Morocco), in North America and South America (Canada, United States, Argentina, Brazil, Chile, Colombia and Mexico), and also in Australia and New Zealand. Employee representatives have access to the workplace, to consenting employees, to collective bargaining agreements as well as to local documentation useful for the performance of their mission, subject to compliance with Group’s legitimate rules on confidentiality and security.8. In the course of the reporting period, what was the percentage of women in:
Optional commentURD 2021 - Strengthen gender equality – P.229 On 31 December 2021, women represented: ● 47% of strategic positions; ● 51% of all key positions within L’Oréal S.A. ; ● 55% of all key positions within the Group; ● 32% of Executive Committee members; and ● 50% of members of the Board of Directors. With the goal of reaching parity up to the most strategic positions. 31 countries EDGE or GEEIS certified9. What was the average ratio of the basic salary and remuneration of women to men (comparing jobs of equal value) during the reporting period?
Optional commentURD 2021 - Gender equity: professional parity and equality for women and men. P.244 Since March 2019, L’Oréal has published its “Index of Professional Gender Equality”, which is calculated using five indicators defined by the “Professional Future” law. This 2022 Group Index is at 97% for all of L’Oréal’s French entities. Since 2007, L’Oréal has collaborated with the INED (National Institute for Demographic Studies) to conduct an annual analysis of the differences in remuneration between women and men working in France. The aim is to guarantee identical pay for people with the same level of skills and the same classification. The median pay gap in France decreased from 10% in 2007 to 0% in 2019 for all categories(1) (stable in 2020). In addition to the INED analysis in France, in 2020 L’Oréal launched a global tool to measure gender pay equality “all things being equal” (net of structural effects) certified by EDGE. This analysis was conducted in 28 countries in 2021 (representing more than 80% of the global workforce): Argentina, Australia, Brazil, Canada, Chile, China, Denmark, Finland, France, Germany, Greece, India, Indonesia, Ireland, Italy, Japan, Mexico, Norway, Peru, Philippines, Russia, South Korea, Spain, Sweden, Switzerland, Thailand, United Kingdom, United States. According to this analysis, the average “unexplained” salary gap in these countries is -0.76% in favour of men. L’Oréal aims to eliminate any “unexplained” salary gaps due to gender in all countries analysed by 2025. L’Oréal chose to have its gender equality practices and policies audited and relies on two independent organisations to measure and assess the situation of its subsidiaries: Gender Equality European & International Standard (GEEIS) and Economic Dividend for Gender Equality (EDGE). Since 2010, the Group’s head office in France and 23 of its countries have been awarded the GEEIS label, and are audited every two years by Bureau Veritas to measure the progress achieved. The countries currently certified are: Austria, Belgium, Bulgaria, Croatia, Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. As of today, 8 other countries rely on the EDGE certification process. The countries are audited by the third-party organisations Flocert or Intertek in order to be certified. L’Oréal USA was the first country to earn the label in 2014. The countries currently certified are: Australia, Brazil, Canada, India, Philippines, Russia, Switzerland and United States. In 2021, L’Oréal Brazil was the first of the Group’s subsidiaries to achieve “EDGE Lead” status, the highest level of EDGE certification. In 2021, L’Oréal USA and L’Oréal Canada were the first of the Group’s subsidiaries to achieve “EDGE Plus” status, which provides an additional analysis in terms of intersectional equality (gender identity, sexual orientation, age, ethnicity, disability and nationality).10. In the course of the reporting period, how frequently were workers injured (injuries per hour worked)?
Optional commentURD 2021 - An ambitious shared health and safety policy. P..232 129 injured with lost-time (L’Oréal and temporary staff) were reported in 2021, compared with 107 injured with lost-time in 2020. The conventional frequency rate (TFc) is 0.73 and the enlarged total incident rate reported (TIRe)(2) is 1.39.11. In the course of the reporting period, what was the company’s incident rate?
Optional commentURD 2021 - Preserving employee health and safety. P.232 The accident gravity rate was the same as in 2020 for the Group. It stood at 0.02 for the Group and 0.05 for factories and distribution centres in 2021.Response and Reporting
12. In the course of the reporting period, has the company been involved in providing or enabling remedy where it has caused or contributed to the adverse impact associated with the following labour rights issues?
Optional commentURD 2021 - Monitoring and control system in respect of Human Rights - p156 Owned factories (i) Child labour: none of the audits revealed any nonconformity of employment of a child under the age of 16. One audit revealed an intern working nights, a point that had been corrected at the time of the follow-up audit. As part of the annual ethics reporting in 2021, it was reported that: • 16 employees were 16-18 years of age(1); and • 0 employee under 16 years of age worked in the Subsidiaries (ii) Forced labour: One audit revealed a case of employees of a subcontractor who should have been on permanent contracts instead of fixed-term contracts, following successive fixed-term contracts. Another audit revealed that outsourced workers were on fixed-term employment contracts that had expired, which had been corrected at the time of the followup audit. (iii) Freedom of association: the audits did not reveal any cases of non-conformity. One audit revealed a case of a collective bargaining document that had not been sent to the competent public authorities due to the health crisis linked to Covid-19. (iv) Non-discrimination: the audits did not reveal any cases of non-conformity. (v) Working hours: one audit revealed insufficient rest time at one site and two audits revealed working hours in excess of 60 hours per week. (vi) Salaries and costs: one audit revealed an error in the calculation of mandatory social security contributions and a delay of more than one month in salaries being paid. Another audit revealed a case in which outsourced workers had not been paid enough for overtime they had worked, which had been corrected at the time of the follow-up audit. (vii) Sexual and psychological harassment: the audits did not reveal any cases of non-conformity. (viii) Health and safety: one audit revealed irregular evacuation and fire safety exercises as well as missing health and safety registration documents. Suppliers (i) Child labour: 1.8% non-compliance. 2 audits identified employment of a child under the age of 16. The necessary measures have been taken to discontinue any commercial relationship with the companies concerned. Demands have been made for the children to be sent to school. Other cases of non-conformity were found in the area of “Child Labour”, particularly concerning the absence of procedures to verify age at the time of hiring by the Supplier, and the absence of copies of identity documents. The Suppliers concerned have been asked to correct this situation, and follow-up audits are planned. (ii) Forced labour: 6.7% of non-compliances. One audit found employees who are bonded or under contract either with the company itself or with a broker. The necessary measures have been taken to discontinue any commercial relationship with the companies concerned. Other cases of non-conformity concern the demand for a monetary deposit at the time of hiring, withholding of identity documents without a legal requirement, as well as the freedom for employees to end their contracts without being penalised (financially or other) except for those stipulated by social legislation. The main corrective measures requested were the return of the identity documents and the updating of employee contracts. Follow-up audits will check the effective implementation of these corrective measures. (iii) Freedom of association(1): 2.1% non-compliance. Most of the cases of non-conformity concern the failure to freely elect employee representatives without management interference. Elections must be carried out, or in countries where such elections are not legal, employee meetings must be organised to report items to be improved. (iv) Non-discrimination: 1.1% of non-compliances. These cases of non-conformity mainly concern the absence of a clear and uniform policy to ensure the absence of discrimination at recruitment or discrimination in the payment of wages and other costs. Suppliers were requested to implement such policies, which will be checked in future audits.; (v) Working hours: 24% of non-compliances☑. Cases of non-conformity involved failure to comply with the Applicable Rules for work time and regular days off, but also the lack of sufficient documents to ensure correct monitoring of the Applicable Rules. In all of these cases, action plans are implemented and a follow-up audit is planned. (vi) Wages and charges: 19% of non-compliances☑. The audits did not find undue salary withholding or charges. Most of the cases of non-conformity concerned insurance and social contributions as well as a failure to monitor payments of wages. When an audit notes a case of non–compliance with regard to the correct settlement of wages, social benefits or the correct payment of overtime, even though these are not undue salary deductions, the Suppliers are requested to correct the situation and a follow-up audit is planned. (vi) Sexual harassment and bullying: 2.4% non-compliance. Most of these cases of non-conformity concerned the absence of a written policy prohibiting sexual harassment and bullying or the absence of an internal system allowing the situation to be reported without negative consequences for the employee concerned. Suppliers were requested to draft these policies, which will be checked in future audits. The other cases of non-conformity did not concern serious breaches of the Applicable Rules.13. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the labour rights principles, including any challenges faced and actions taken towards prevention and/or remediation.
• General : L’Oréal’s commitment to Human Rights is based in particular on the Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights and the Fundamental Conventions of the International Labour Organisation, although these conventions have not all been ratified by all the countries where L’Oréal operates. The Chief Corporate Responsibility Officer, a member of the Executive Committee, is responsible for overseeing the respect of human rights and fundamental freedoms in the Group. This mission has been entrusted to her by L’Oréal’s Chairman and Chief Executive Officer, to whom she reports. The Chief Corporate Responsibility Officer has a budget and a dedicated team composed of Human Rights experts. She relies on all the Group’s teams and resources to carry out her work. A dedicated network of Human Rights Correspondents covering all of the Group’s markets allows the Group’s Human Rights commitments to be rolled out. The Human Rights Committee, chaired by the Chief Corporate Responsibility Officer and composed of representatives of the various activities, functions and Zones (including Purchasing, HR, CSR, Safety, Security, etc.), allows coordination and exchange on the implementation of the Group’s Human Rights policy. Its primary objective is to enable the emergence of a Human Rights culture within the Group. The Group completed a generic review of the Human Rights issues related to its operational activities and commercial relationships, and identified four groups of impacted stakeholders that inform the Human Rights policy: • the Human Rights of our employees; • the Human Rights of the employees of Group suppliers; • the Human Rights of consumers; and • the Human Rights of communities. In order to achieve its Human Rights goals and face these risks, L’Oréal has been a member of the United Nations Global Compact since 2003, and is committed to respecting all internationally recognised Human Rights. A specific partnership was also signed in 2019 with the Danish Institute for Human Rights to support the Group in the implementation of Human Rights. This commitment to respect Human Rights is supported each year at the highest level of the Company by its Chief Executive Officer, by the Chief Ethics, Risks and Compliance Officer, and by the Chief Sustainability Officer, who also chairs the Group’s Human Rights Committee. L’Oréal’s Influencer Value Charter L’Oréal does not work with influencers under the age of 16 or the legal contractual age. Employee evaluation system The ethical competency “Acts with integrity and respects others” is included in the annual appraisal system for all employees. Speak Up policy L’Oréal’s Speak up policy, running since 2008, enables employees to report serious violations of Human Rights and Fundamental Freedoms, health and safety of people and respect for the environment, notably via a secure Internet site (ethics whistleblowing channel) directly to the Chief Ethics, Risk and Compliance Officer. The Group’s ethics whistleblowing channel (www.lorealspeakup.com) has also been accessible to all Group stakeholders since 2018. An annual ethics reporting system The system is used to monitor the implementation of the Ethics and Human Rights programme. The subsidiaries are informed of their potential areas for improvement by the Global Ethics, Risk & Compliance Department. 100% of the subsidiaries completed their annual ethics reporting in 2021. Procedures for prospective acquisitions When prospective acquisitions are being reviewed, the responses to the “Ethics and Human Rights questionnaire” submitted to target companies serve to identify whether they have properly taken into account risks related to failure to respect Human Rights (abolition of child labour and compulsory and forced labour, etc.), among other issues. • Internal: Code of ethics - P.8 We are committed to respecting and promoting Human Rights, namely by reference to the Universal Declaration of Human Rights dated December 10, 1948, and the United Nations Guiding Principles on Business and Human Rights dated June 16, 2011. We have been a signatory to the United Nations Global Compact since 2003 and we support the UN Women’s Empowerment Principles. We are present in many countries, and we are particularly vigilant on issues covered by the Fundamental Conventions of the International Labour Organization (prohibition of child labour and forced labour, respect of freedom of association), promotion of diversity, women’s rights, respect for the rights of people to use their natural resources and the right to health. URD 2021 - Audit and self-assessment system. p.154 EHS audits specific to Subsidiaries: In the event of a non-conformity (Needs Continuous Improvement, Needs Immediate Action, Zero Tolerance), corrective action plans must be implemented which are then audited at the level of the Subsidiary or Supplier. Failure to implement a corrective action plan can, in the case of a Subsidiary, result in an alert being sent to the Country Manager. In addition, Subsidiaries can decide to link part or all of the remuneration of their managers and/or of their performance evaluation to the implementation of the Applicable Rules. Employee Human Rights Policy - P.5 We check employees’ age upon hiring and a copy of an official document showing the employee’s name, age and photo is kept in their HR file. In regions where it is not possible to keep copies of such documents, alternative age verification systems are put in place. If necessary, HR teams are trained on commonly used forms of identification forgery. Should any child labour without a waiver be identified within our operations, we provide adequate support to enable the child to return to school, and, if necessary, ensure their dependents are compensated for the resulting loss of income until the end of schooling. This includes making an offer of reemployment to the child when he/she reaches the permissible age. • Externe : Mutual Ethical Commitment Letter The Group’s suppliers must sign an ethical commitment letter that sets out its requirements and commitments to its suppliers. In 2021, the Group published an updated version, the Mutual Ethical Commitment Letter, which highlights the mutual commitment between it and its suppliers. This document covers, in particular, Human Rights and working conditions. This new version is being rolled out gradually with all suppliers worldwide. (see section 3.4. “Vigilance Plan” of this document).. URD 2021 –Audit and self-assessment system – P.154 EHS audits specific to Subsidiaries : In the event of a non-conformity (Needs Continuous Improvement, Needs Immediate Action, Zero Tolerance),corrective action plans must be implemented which are then audited at the level of the Subsidiary or Supplier. Failure to implement a corrective action plan can, in the case,of a Subsidiary, result in an alert being sent to the Country Manager. In addition, Subsidiaries can decide to link part or all of the remuneration of their managers and/or of their performance evaluation to the implementation of the Applicable Rules. In the case of Suppliers, serious non-conformities (Needs Immediate Action, Zero Tolerance and Access Denied) or the failure to implement corrective action can result in the non‑listing of a new Supplier or the suspension or termination of commercial relations with a listed Supplier. “Suppliers/Subcontractors and Child Labour” Description of the main commitments concerning child labour by suppliers/subcontractors.Environment
Commitment
1. Does the company have a formal policy on the following environmental topics?
Optional commentL’Oréal’s strategy is based on Glocalization that is the globalisation of brands with profound understanding and respect for local differences to meet the beauty expectations and needs of women and men around the world, while at the same time being an environmental and societal leader. L’Oréal’s Ethical Principles – Integrity, Respect, Courage and Transparency – guide the Group’s development and help establish its reputation. These principles are the basis of its sustainable development, social and societal responsibility, compliance and philanthropy policies. Sustainable development approach For many years, L’Oréal has begun a profound transformation of its model, in all areas, to adapt to the great changes in the world. Sustainable development is a fundamental pillar of this transformation and a strategic priority for all of the teams. In the firm belief that sustainable development is an essential factor for success and durability, L’Oréal is deploying an ambitious social, societal and environmental policy, which is shared by its management and teams. In June 2020, L’Oréal initiated the second generation of its commitments to sustainable development, under the umbrella of a programme called L’Oréal for the Future, with a new set of particularly ambitious and concrete targets for 2030, in order to cover all the impacts associated with its value chain: its production and distribution sites as well as its supply chains and the impacts associated with the use of products by consumers. In 2015, the Group also undertook to define Science-Based Targets to reduce its greenhouse gas emissions across its entire value chain and over the long term, in accordance with the Paris Agreement on climate change. In December 2017, the SBT initiative validated the Group’s proposal and L’Oréal committed to reduce the greenhouse gas emissions on its Scopes 1, 2, and 3 by 25% in absolute value by 2030, compared to the 2016 baseline. The L’Oréal for the Future programme, which is subject to public reporting every year, is based on three pillars: • Transforming L’Oréal’s business to ensure that it is included within the “planetary boundaries”, i.e. in the context of what the planet can withstand, according to environmental science; • Involving L'Oréal's business ecosystem in the Group's transformation and helping the Group's transition to a more sustainable model; and1.1. For each environmental policy, is it:
Prevention
2. In the course of the reporting period, has the company engaged with affected stakeholders or their legitimate representatives in relation to the following environmental issues?
Optional commentURD 2021 - Chapter IV: Introduction. p.170 L’Oréal’s strategy is based on Glocalization that is the globalisation of brands with profound understanding and respect for local differences to meet the beauty expectations and needs of women and men around the world, while at the same time being an environmental and societal leader. L’Oréal’s Ethical Principles – Integrity, Respect, Courage and Transparency – guide the Group’s development and help establish its reputation. These principles are the basis of its sustainable development, social and societal responsibility, compliance and philanthropy policies. Sustainable development approach For many years, L’Oréal has begun a profound transformation of its model, in all areas, to adapt to the great changes in the world. Sustainable development is a fundamental pillar of this transformation and a strategic priority for all of the teams. In the firm belief that sustainable development is an essential factor for success and durability, L’Oréal is deploying an ambitious social, societal and environmental policy, which is shared by its management and teams. In June 2020, L’Oréal initiated the second generation of its commitments to sustainable development, under the umbrella of a programme called L’Oréal for the Future, with a new set of particularly ambitious and concrete targets for 2030, in order to cover all the impacts associated with its value chain: its production and distribution sites as well as its supply chains and the impacts associated with the use of products by consumers. In 2015, the Group also undertook to define Science-Based Targets to reduce its greenhouse gas emissions across its entire value chain and over the long term, in accordance with the Paris Agreement on climate change. In December 2017, the SBT initiative validated the Group’s proposal and L’Oréal committed to reduce the greenhouse gas emissions on its Scopes 1, 2, and 3 by 25% in absolute value by 2030, compared to the 2016 baseline. The L’Oréal for the Future programme, which is subject to public reporting every year, is based on three pillars: • Transforming L’Oréal’s business to ensure that it is included within the “planetary boundaries”, i.e. in the context of what the planet can withstand, according to environmental science; • Involving L'Oréal's business ecosystem in the Group's transformation and helping the Group's transition to a more sustainable model; and • Contributing to solving the challenges of the world by supporting the most urgent social and environmental needs.3. What type of action has the company taken in the reporting period with the aim of preventing/mitigating the risks/impacts associated with these environmental topics?
Optional commentURD 2021 - Respect for biodiversity and societal contribution. p.209 Depending on the level of environmental and/or social risk identified on these streams, suppliers are notably asked to deploy the field audit procedure for producers (88 indicators), developed by L’Oréal with the support of the Rainforest Alliance NGO and reviewed in 2019 by EcoCert, The Biodiversity Consultancy and The Danish Institute for Human Rights. They are also invited to rely on sustainable sourcing certifications adapted to the challenges of their streams (Fair Trade, Sustainable Agricultural Network, Organic, etc.). DEU - Engagement "zéro Déforestation". P.212. L’Oréal est membre fondateur de Action for Sustainable Derivatives (ASD), une initiative coordonnée par BSR et Transitions et au sein de laquelle L’Oréal contribue activement, notamment par le partage de l’ensemble de ses méthodologies et outils développées depuis 2014. DEU - La Recyclabilité : l’intégration dans les filières de circularité. P.215 Dès 2017, L’Oréal a rejoint l’initiative de la New Plastics Economy (NPEC) de la Fondation Ellen MacArthur, dont l’objectif est de repenser le cycle de vie du plastique pour qu’un emballage en plastique ne devienne jamais un déchet, et qu’il soit ré-inclus dans l’économie circulaire sous forme de matériaux de valeur, biologique ou technique. Depuis 2018, L’Oréal est partenaire de la Fondation Ellen MacArthur avec l’ambition, par exemple, d’avoir 100 % des packagings plastiques rechargeables, réutilisables, recyclables ou compostables d’ici à 2025. DEU - Circular innovation Fund. P.227 Conscient de la pression croissante sur les ressources naturelles, de la crise mondiale des déchets et du rôle que peut jouer l’économie circulaire dans l’atténuation du changement climatique, L’Oréal a décidé de créer un fonds d’investissement mondial exclusivement dédié à l’économie circulaire, dénommé le Circular Innovation Fund (CIF). Ce fonds, co-géré par deux sociétés de gestion de nationalité différentes (Cycle Capital Management et Demeter) pour ancrer son caractère international, rassemblera plusieurs coinvestisseurs et sera doté à terme d’un montant total estimé entre 150 et 200 millions d’euros. Il a pour vocation de financer des entreprises innovantes dans le domaine du recyclage, de la gestion des déchets plastiques ou encore des matériaux issus de la bioéconomie. Créé fin 2021, le fonds construira et déploiera son portefeuille d’investissements à partir de 2022. Sponsor principal du Circular Innovation Fund, L’Oréal investira une enveloppe de 50 millions d’euros dans ce fonds.4. How does the company assess progress in preventing/mitigating the risks/impacts associated with the following environmental topics?
Optional commentDEU - Cartographie des risques. P.158 Le processus de cartographie des risques du Groupe est animé par la Direction Éthique, Risques et Conformité avec l’appui de l’ensemble des Directions Fonctionnelles et Métiers. Cette cartographie est revue par le Comité Exécutif du Groupe qui la valide. La cartographie des risques porte sur l’ensemble des activités de L’Oréal et est actualisée annuellement. Cette démarche d’identification, d’analyse et d’évaluation des risques significatifs permet de renforcer et prioriser les actions du Groupe. Les résultats de cette démarche sont présentés au Comité d’Audit. Les principaux risques auxquels le Groupe est exposé sont décrits ci-après.4.1. For each environmental topic in which the company sets timebound goals / targets, what kind of targets has the company set?
Optional commentL'Oréal pour le Futur Le réchauffement climatique et les bouleversements environnementaux entraîneront une dégradation potentiellement définitive des habitats naturels et de nos conditions de vie. L’augmentation du niveau de la mer, la fonte des glaces, le réchauffement et l’acidification des océans ainsi que les événements météorologiques extrêmes vont s’accélérer. Pour répondre à ces enjeux plus pressants, il faut des engagements plus forts. Le programme L’Oréal pour le Futur incarne les deux dimensions complémentaires de ce que signifie pour nous la responsabilité d’entreprise : transformer notre entreprise vers un modèle économique toujours plus durable, et contribuer à relever les défis auxquels le monde doit faire face.4.2. For each environmental topic in which the company sets timebound goals / targets, how is progress against target / goal tracked?
Optional comment• Le Conseil d’Administration détermine chaque année les orientations stratégiques de L’Oréal, qui intègrent les enjeux liés au changement climatique et plus généralement les sujets de développement durable, ainsi que la raison d’être du Groupe « Créer la beauté qui fait avancer le monde ». Pour veiller à la détermination et bonne mise en oeuvre de ces orientations stratégiques, le Conseil d’Administration peut s'appuyer sur ses quatre Comités d'Etude en charge d'instruire les sujets relevant de leur domaine d'expertise dans la détermination et le suivi de la stratégie extra-financière. La Directrice Générale de la Responsabilité Sociétale et Environnementale intervient chaque année au Conseil d’Administration et à chaque réunion du Comité Stratégie et Développement Durable pour rendre compte de son activité. Tous les membres du Conseil d’administration reçoivent en amont de chaque réunion un point d’étape du programme L’Oréal pour le Futur détaillant les avancées concrètes du programme. • Pour mettre en oeuvre ce plan global de transformation du Groupe qui touche toutes les Divisions, les Zones et les fonctions support, le Directeur Général peut s’appuyer sur l’engagement de chaque membre du Comité Exécutif dans son périmètre respectif. Le Comité Exécutif met en oeuvre, à ses côtés, les orientations stratégiques sur les sujets non-financiers. Des points d’étape sur les sujets développement durable sont réalisés de manière régulière pour définir et mettre en oeuvre les plans d’actions nécessaires. Un réseau de sustainability leaders, membres des Comités de Direction, est en charge dans chaque Division, chaque Zone géographique, et chaque entité du déploiement opérationnel du programme L’Oréal pour le Futur. • Au sein du Comité exécutif, la Directrice Générale de la responsabilité Sociétale et Environnementale assure la cohérence stratégique entre les activités que le Groupe mène pour intégrer le développement durable tout au long de sa chaîne de valeur et ses contributions philanthropiques. Elle est responsable de l’élaboration et de la mise en oeuvre de la stratégie de développement durable, évalue et gère les risques et les opportunités liés aux enjeux environnementaux et sociétaux, au niveau du Groupe à travers les plans d’action des programmes de développement durable (Sharing Beauty with All puis, à présent, L’Oréal pour le Futur). • Différents Comités internes liés au développement durable, auxquels participent les experts responsables du déploiement du programme, définissent les feuilles de route de chacune des entités représentées (Opérations, Recherche, Divisions, Zones). Chacun des Comités internes définit des objectifs annuels et pilote leur déploiement tout au long de la chaîne de valeur de L’Oréal.5. In the course of the reporting period, has the company been involved in providing or enabling remedy for any actual impacts associated with the following environmental issue(s)?
Optional commentDepuis de nombreuses années, L’Oréal a initié une transformation profonde de son modèle, dans tous les domaines, pour s’adapter aux grandes mutations du monde. Le développement durable est un pilier majeur de cette transformation et une priorité stratégique pour l’ensemble des équipes. Convaincu que le développement durable est un levier essentiel de réussite et de pérennité, L’Oréal déploie une politique sociale, sociétale et environnementale ambitieuse, partagée par son management et ses équipes. L’Oréal a initié en juin 2020 la seconde génération de ses engagements en matière de développement durable, sous l’ombrelle d’un programme appelé L’Oréal pour le Futur, avec une nouvelle série d’objectifs particulièrement ambitieux et concrets à horizon 2030, afin de couvrir l’intégralité des impacts associés à sa chaîne de valeur : ses sites de production et de distribution, mais aussi ses chaînes d’approvisionnement et les impacts associés à l’utilisation des produits par les consommateurs. Le Groupe s’est également engagé en 2015 à définir des Science Based Targets (SBT) afin de diminuer ses émissions de gaz à effet de serre sur l’ensemble de sa chaîne de valeur et sur le long terme, conformément aux Accords de Paris sur le climat. En décembre 2017, l’initiative SBT a validé la proposition du Groupe et L’Oréal s’est engagé à réduire les émissions de gaz à effet de serre de ses Scopes 1, 2 et 3 de 25 % en valeur absolue d’ici à 2030, par rapport à 2016. Le programme L’Oréal pour le Futur, dont il est rendu compte publiquement chaque année, est fondé sur trois piliers : • Transformer les activités de L’Oréal pour les inscrire au sein des « limites planétaires », c’est-à-dire dans le cadre de ce que la planète peut supporter, conformément à ce que dit la science environnementale ; • Associer l’écosystème de L’Oréal à la transformation du Groupe et lui donner les moyens d’adopter un modèle plus durable ; et • Contribuer à relever les défis planétaires en répondant aux besoins environnementaux et sociaux les plus urgents.Climate Action
6. What were the company’s gross global greenhouse gas emissions for the reporting period?
Scope 2 Emissions
Scope 3 Emissions
Optional commentDEU 2021 - Bilan gaz à effet de serre : un exercice annuel. p.220 L’Oréal réalise annuellement un Bilan gaz à effet de serre (Bilan GES) pour l’ensemble des activités du Groupe afin de mesurer ses émissions de CO2 et d’identifier les plans d’actions permettant de réduire son impact. Ce bilan établi depuis 2007 suit les règles du Green House Gas Protocol (GHG Protocol), la méthode de référence internationale en matière de comptabilisation des émissions de GES. Il permet de déterminer l’empreinte Carbone globale du Groupe, selon trois catégories – Scopes. L’Oréal publie des données selon une approche dite « cradle‑to-grave » afin d’estimer de manière holistique son empreinte carbone sur l’ensemble du cycle de vie des produits (de l’achat des matières premières, au transport en amont et en aval, jusqu’à l’utilisation des produits et leur fin de vie). L’Oréal analyse également ses émissions selon une approche dite « cradle to shelf » qui comprend les étapes sur lesquelles L’Oréal a le plus d’influence grâce, par exemple, à des initiatives d’éco-conception ou au travail d’accompagnement réalisé auprès des fournisseurs. Ces émissions associées au périmètre « cradle to shelf » comprennent (i) les Scopes 1 et 2 des sites exploités par L’Oréal, (ii) les émissions indirectes de GES en amont liées aux achats par L’Oréal de matières premières et de matériaux d’emballage utilisés pour les produits fabriqués par le Groupe (ces émissions comprennent l’extraction des matériaux, leur transport vers les fournisseurs, le suivi de leur traitement avant la livraison), (iii) les émissions indirectes de GES en aval générées par le transport de produits vendus à partir de centres de production ou de distribution à des clients (ces émissions comprennent les flux de transport de produits finis provenant des sites de production jusqu’au premier point de livraison client).7. What percentage of the company's revenue was invested in R&D of low-carbon products/services during this reporting period?
8. Has the organization acted to support climate change adaptation and resilience?
Optional commentURD 2021 - Contribute to solving the challenges of the world. P.49 By 2030, the L’Oréal fund for Nature Regeneration will have invested €50 million to help restore 1 million hectares of degraded ecosystems. By 2030, the Fund will have helped capture 15 to 20 million tonnes of CO2 and we will have created hundreds of jobs opportunities. URD 2021 - Industrial and environmental risks/Climate change. P.164 Taking into environmental challenges into account, particularly efforts to combat climate change, is an integral part of L’Oréal’s business model. Capitalising on its previous achievements, the Group has announced a second generation of particularly ambitious and specific objectives for 2030 as part of its new sustainable development programme, “L’Oréal for the Future”, announced in June 2020. These objectives cover all impacts associated with L’Oréal’s value chain in order to reduce the impact not only of its production and distribution sites, but also of its supply chains, as well as the impacts associated with the use of products by consumers (see Chapter 4 of this document, including in particular the information published in the Non-Financial Performance Statement, which includes recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)). The Group has defined its climate objectives in accordance with the Science-Based Targets (SBT) approach, which encourages companies to commit voluntarily to a transition towards a low carbon economy and to set objectives that correspond to what the latest scientific climate data considers necessary to track the +1.5°C trajectory for 2050. These commitments were validated from 2017 by the SBT initiative: ● from 2025, all its industrial, administrative and research sites will be carbon neutral; ● by 2030, the Group will have reduced all its greenhouse gas emissions by 25% in absolute value compared to 2016 (Scopes 1, 2 and 3); and ● as a signatory of the Business Ambition for 1.5°C call to action, L’Oréal has made a commitment to reach net zero emissions by 2050. L’Oréal also announced that by 2030 all water used in the Group’s industrial processes would be recycled and reused in a loop on its sites. Deployment of the necessary equipment will be prioritised according to the water situation of the drainage basins in which L’Oréal operates. Management of potential consequences of extreme events is described in the section on “product availability” risk. In addition, by relying on recent scientific developments, particularly in the area of biotechnology, the Group also initiated a Green Sciences programme to drive change in its portfolio of raw materials through the development of ingredients with a favourable environmental profile, by minimising the environmental impacts linked to the cultivation of plants that are the source of these ingredients (deforestation, soil depletion, and consequences for biodiversity, for example), and by relying on ecofriendly transformation procedures that prevent upstream pollution. To inform its consumers and enable them to make more sustainable consumer choices, the Group is developing an environmental and social display system for its products, with a rating ranging from A to E, which takes into account 14 factors of impact for the planet, including greenhouse gas emissions. This display is communicated for hair and skin care by the Garnier brand in several European countries. It is now extended to skin care for the La Roche Posay, Vichy and Biotherm brands in France and will be gradually rolled out in new markets and in new categories. URD 2021 - ScienceBased Targets commitment. P.223 In 2015, L’Oréal undertook to define Science-Based Targets to reduce its greenhouse gas emissions across its entire value chain and over the long term, in accordance with the Paris Agreement on climate change. In December 2017, the SBT initiative has validated the Group’s proposal: Thus, by 2030, L’Oréal is committed to reducing by 25% in absolute value the greenhouse gas emissions of Scopes 1, 2 and 3 (with full coverage of the items of Scope 3, in accordance with the definition of the GHG Protocol), with a reference year of 2016; in particular, the Group is committed in particular to reducing greenhouse gas emissions from all sites it operates by 100% by 2025, through a programme of energy efficiency and a supply of renewable energy exclusively. These commitments were revaluated in 2019 over Scopes 1 and 2 by the SBT initiative and considered to be in compliance with the new SBT 1.5°C criteria. Roadmaps were deployed within the different business lines (packaging, research, sourcing, supply chain, etc.) so that each one contributes to the reduction of CO2 emissions in Scopes 1, 2 and 3. Specific tracking has been started, which allows each of the segments to monitor its own performance. URD 2021 - Fighting climate change. P.189 As the cosmetics industry has low energy consumption and low CO2 emissions compared with other industries, L’Oréal is not subject to the CO2 emission quotas provided for by European regulations, whether for the industrial sites, administrative sites or research centres. However, L’Oréal, which has been committed to the efforts to fight climate change for many years, applies a particularly proactive policy for the reduction of its CO2 emissions. - Group greenhouse gas emissions (Scopes 1 and 2, according to the GHG Protocol) Under the L’Oréal for the Future programme, the Group has set itself a target to reduce the CO2 emissions of all sites operated by the Group by 100% by the year 2025 (Scopes 1 and 2). To limit its impact on climate change and achieve this target, L’Oréal has implemented a strategy based on three pillars: 1. Reducing its energy needs by improving energy efficiency across all its facilities (buildings, equipment, etc.); 2. Increasing the use of local renewable energy wherever possible. 3. Achieving the targets defined for the sites without recourse to carbon offsetting.Energy / Resource Use
9. Please report the company's renewable energy consumption as a percentage of total energy consumption in the reporting period.
Optional commentB/ Réduire la consommation d’énergie et accroître le recours aux énergies renouvelables. P.191 URD - Fighting climate change on operated sites. p.181 Industrial sites 80%, Administrative sites and Research Centers 82%Technology
10. What percent of the company's revenue came from environmentally friendly products / services during this reporting period?
Optional commentL'Oréal for the Future By 2030, 100% of the biobased ingredients for formulas and packaging materials will be traceable and will come from sustainable sources, none of them will be linked to deforestation. By 2030, 95% of our ingredients in formula will be biobased, derived from abundant minerals or from circular processes. URD 2021 - Eco-designed products. p.206 * 96% of products were eco-designed in 2021. * In 2021, 46% of created or renovated products had an improved environmental profile due to a new formula with a smaller environmental footprint.Sector-specific Questions
11. Which sector(s) does the company operate in? If diversified, choose top 3 by revenue.
Sector-specific: Water
12. Please provide details regarding the company's water withdrawal and consumption (own operations) during the reporting period.
Water withdrawal (volume of water in megaliters):
Water consumption (volume of water in megaliters):
Optional commentURD 2021 – GRI Standards content index. P.271 URD 2021 - SASB cross-reference table. P.26913. Please provide details about the company’s water intensity of products in regions with high or extremely high water stress.
Sector-specific: Forest, biodiversity, and land use
14. Please report the number and area (in hectares) of sites owned, leased, or managed by the company in or adjacent to protected areas and/or key biodiversity areas (KBA).
15. What area (in hectares) of natural ecosystems was converted during the reporting period in areas owned, leased, or managed by the company?
16. Is the company supporting or implementing project(s) focused on ecosystem restoration and protection?
Optional commentSee our Forest Policy and our programme L''Oréal for the FutureOverall Environment
21. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the environment principles, including any challenges faced and actions taken towards prevention and/or remediation.
See table in URD 2021 - INDICATORS AND PRINCIPAL RESULTS. P.181 & URD 2021 - CSR criteria: The L’Oréal for the Future programme. P.112 for all 2021 results on environment strategy. URD 2021 - At the heart of production: environmental protection. p.33 The Group’s environmental policy aims to roll out best practice in sustainable production so as to limit the direct impact of the Group’s business activities on the environment, and to preserve biodiversity and resources: energy efficiency, use of renewable energy, optimisation of water consumption and recycling, preservation of biodiversity, reduction of waste production, etc. In 2021, L’Oréal continued to prioritise programmes to reduce its environmental footprint (e.g. continuation of renewable energy projects around the world, start-up of two new treatment plants in France) with, since 2019, a -35% drop in CO2 emissions in absolute value (-87% since 2005), a -5% drop in water consumption per unit of finished product (-53% since 2005), and a -1% drop in waste generation per unit of finished product (-38% since 2005). It should be noted that 97% of residual waste was recovered in 2021, meaning that it was reused, recycled or used for energy recovery. URD 2021 - CSR criteria: The L’Oréal for the Future programme. P.112 […] 100 carbon neutral sites in 2021 (58%) 6 Waterloop factories in 2021 (15%)[…] Carbon neutral definition URD 2021 - Making increased use of renewable energy. P.192 Certain sites are now able to claim the status of “carbon neutral” if they meet the following two requirements: • Direct CO2 (Scope 1) = 0 with the exception of the gas used for catering, the fuel oil used for sprinkler tests, fossil energy consumptions during maintenance of on-site renewable facilities, cooling gas leaks if they are lower than 130 tonnes CO2eq./year; and • Indirect CO2 Market Based (Scope 2) = 0. The renewable energy sources must be located on-site or less than 500 kilometres from the site and be connected to the same distribution network. Waterloop factory definition URD 2021 – The “Waterloop Factory” concept. P195 The “Waterloop Factory” concept consists of using city mains water only for human consumption and for the production of the high-quality water used as raw material for product processing; all the water required by the utilities (cleaning equipment, steam production, etc.) is derived from water that is reused or recycled in a loop on the site. It involves the implementation of a two-step system: • the optimisation of industrial processes in order to minimise water consumption, which leads to a reductionof water withdrawals; and • the installation of a water recycling system: industrial wastewater, after pre-treatment in the on-site treatment plant, are reprocessed using various technologies (ultrafiltration, reverse osmosis, nanofiltration, etc.) in order to extract very high-quality water. This is then used in a loop to clean production tools and services as a replacement for municipal mains water. As such, water requirements for utilities are fully covered. The Waterloop Factory concept was adopted for the first time in 2017 by the Burgos factory in Spain. In 2021, this concept was also extended to the factories in Settimo in Italy, Vorsino in Russia, Libramont in Belgium, Mexico City in Mexico and Yichang in China. URD 2021 - Recovering the waste generated. P.200 In 2021, 59% of the waste generated by industrial sites was reused or recycled (material recovery). […] for the Administrative sites and research centres, […] 48% of the waste generated was reused or recycled (material recovery) in 2021. URD 2021 - Introduction of Chapter 4 L’ORÉAL’S SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY. P.171 All L’Oréal employees are encouraged to receive training on sustainable development issues through a full range of online courses that are delivered as part of the L’Oréal for the Future programme, which are available in 15 languages. In 2021, over 41,400 employees completed the Green Steps or Green tests training modules. URD 2021 - Sustainable sourcing of raw materials. p.157 In 2021, 100% of the renewable raw materials used by the Group were reassessed on the basis of criteria such as respect for biodiversity and forced labour. Out of the 313 plant species that are the source of the renewable raw materials used by the Group, around 6%(2) present significant biodiversity challenges (endangered species, impact of production on natural environments) depending on their geographic origin and the method of extraction or production used. They are the subject of specific action plans initiated with suppliers and, if necessary, benefit from the systematic support of independent external third parties, in order to manage the real impacts on the territories of origin of the ingredients.Anti-corruption
Commitment
1. Does the company have an anti-corruption compliance programme?
Optional commentWishing to act in all circumstances in accordance with the ethical principles it has set itself and to comply with the laws and regulations in force in all the countries where it operates, the L’Oréal Group applies a zero-tolerance policy in terms of corruption and has developed a robust corruption prevention program. It is a long-standing commitment taken at the highest level of the Company. L’Oréal has been a member of the United Nations Global Compact since 2003 and supports the fight against corruption. The Group is committed to complying with the United Nations Convention against Corruption of 31 October 2003 and to applying all applicable laws, in particular the Sapin 2 law in France. L’Oréal is a member of the International Chamber of Commerce Anti-Corruption Commission and a member of Transparency International France. This commitment is supported at the highest level of the Company by its Chief Executive Officer who renews L’Oréal’s commitment to the United Nations Global Compact every year. • The involvement of everyone in preventing corruption The Executive Committee regularly reviews the corruption prevention policy presented to the Board of Directors. The Chief Ethics, Risk and Compliance Officer, reporting to the Chief Executive Officer, is responsible for designing and monitoring the corruption prevention programme and relies on the global network of internal control managers for its implementation. He leads the specific risk mapping. Country Managers ensure the correct deployment of the corruption prevention programme and its compliance. Employees apply the corruption prevention policy in the context of their activities. If they have any doubts, they may contact their line management, their Legal Director, their Administrative and Financial Director, their Internal Control Manager, their Ethics Correspondent and, ultimately, the Chief Ethics, Risk & Compliance Officer, if they have any questions about respecting this commitment. The aim is to ensure that all the situations encountered are thoroughly examined and, where applicable, that appropriate steps can be taken. • L’Oréal’s Code of Ethics and practical corruption prevention guides L’Oréal’s Code of Ethics publicly states a zero-tolerance policy on corruption which applies to all employees, directors and corporate officers, Directors and members of the Executive and Management Committees of the Group and its subsidiaries worldwide. L’Oréal’s Code of Ethics was updated in 2014. Available in 45 languages, and in French and English Braille, it is distributed to all employees worldwide. L’Oréal has also published a more detailed corruption prevention policy that is available on its website, loreal.com. A specific corruption prevention Guide is rolled out throughout the Group as a whole since 2013 and complemented in 2018, it covers the relationships with each of L’Oréal’s stakeholders, in particular with the Public Authorities and Intermediaries. This practical Guide is intended to specify the Group’s standards and to help employees handle situations that they might encounter in the performance of their duties. It reaffirms L’Oréal’s corruption prevention policy which was approved by the Chief Executive Officer and the Executive Committee and presented to the Board of Directors. This policy posted online on L’Oréal’s website (www.loreal.com) restates the following principles: - the zero-tolerance policy on corruption; - the prohibition of facilitation payments; - the prohibition of all contributions to political parties or politicians with the aim of obtaining a commercial advantage; - the prohibition on giving and accepting gifts and/or invitations that might influence or be perceived as influencing a business relationship; - communication of the commitment to preventing corruption to the Group’s business partners; and - respect for these commitments by intermediaries representing L’Oréal, particularly in countries where there is a high risk of corruption. • Group-level risk assessment The risk of corruption is included in the Group risk assessment. Following the update conducted in 2020, the Group has produced 93 corruption risk maps in 75 countries. A tool also enables Country Managers to assess and analyse possible local ethical risks (including corruption) and to take the necessary prevention measures. • Specific Human Resources procedures An ethical competency “Delivers both sustainable and short-term results with integrity” is included in the annual appraisal system for all employees • Training A compulsory online training programme (e-learning) on the prevention of corruption, available in 18 languages, has been rolled out in all countries; it had been taken by 85% of the employees concerned as at 31 December 2021. • Control and assessment of measures and procedures dedicated to the prevention of corruption The Group’s Internal Control process provides for control procedures on operational activities, in particular for the separation of tasks. Moreover, accounting controls for the prevention of corruption are performed periodically. The implementation of the corruption prevention programme is part of the Internal Control self-assessment process rolled out in operational entities. L’Oréal’s Internal Audit teams are particularly vigilant in this respect. Corruption risks are systematically reviewed during audit assignments, through individual interviews and specific checks. These interviews are conducted separately with the Country Manager and the Administrative and Financial Director. They give rise to an individual report reviewed and signed by these latter persons • Third-party due diligences The third-party management process (customers/suppliers) includes corruption risk. An assessment of corruption risks is conducted on our third parties, and appropriate verifications are implemented, which rely primarily on a dedicated tool. For intermediaries with public authorities, a specific guide has been made available to employees. • Due diligences prior to proposed acquisitions A procedure specific to corruption risks integrates appropriate and proportionate verifications at the different steps of the acquisition process. Responses to the ethics questionnaire submitted to target companies are intended to identify whether corruption risk prevention has been taken into account by the companies. • L’Oréal’s “Speak Up” policy This enables employees to express any concerns they may have, including with regard to corruption, namely directly via a secure website to the Group’s Chief Ethics, Risk and Compliance Officer. Any allegation raised in good faith is examined in detail and appropriate measures are taken, where necessary, in the event of non-compliance with the corruption prevention policy. The whistleblowing line was opened to employees in 2008, and then to stakeholders in 2018.2. Does your company have policies and recommendations for employees on how to act in case of doubt and/or in situations that may represent a conflict of interest, e.g. with regard to gifts and hospitality, donations, sponsorship, or interactions with public officials?
Optional commentStand-alone policies are publicly available on loreal.com • Ethical and responsible philanthropy policy • Responsible Lobbying Policy With regard to employees, the Group also has other reference documents for the purpose of specifying the practices to be adopted and preventing corruption: • Employee guide – Gifts/Invitations: distributed in 2014 on a Group-wide basis to specify the rules in this area, it is now integrated within the specific corruption prevention Guide; • Employee Guide – Management of intermediaries with public authorities: distributed in 2018 to the relevant personnel to specify the rules in this area • “The Way We Buy”: a practical and ethical guide to govern relationships between suppliers and all employees involved in purchasing decisions. This document has been translated into 12 languages. • “The Way We do Philanthropy”: a practical and ethical guide to select and manage philanthropy • “The Way We Work with Scientists and Health Care Professionals” : a practical and ethical guide to help working with Scientific/Health Care ProfessionalsPrevention
3. Who receives training on anti-corruption and integrity?
3.1. How often is such training provided?
4. Does the company monitor its anti-corruption compliance programme?
Optional comment.Response and Reporting
5. Please report the company's total number and nature of incidents of corruption during the reporting year.
6. Within the reporting period, what measures has the company taken to address suspected incidents of corruption independently or in response to a dispute or investigation by a government regulator?
7. Does your company engage in Collective Action against corruption?
8. Briefly describe practical actions the company has taken during the reporting period and/or plans to take to implement the anti-corruption principle, including any challenges faced and actions taken towards prevention and/or remediation.
• Sustainable Sourcing policy to ensure anti-corruption principle to be spread along the chain value L’Oréal has published a new sustainable Sourcing strategy, which builds on the previous strategy and focuses on four pillars: protection of Human Rights, preservation of the environment and resources, the integrity of business relationships and diversity and inclusion. For each pillar, the commitments, targets, values and standards that L’Oréal shares with its suppliers are set out. These targets have been designed with external experts on the basis of recognised benchmarks. The tools for monitoring progress are also specified. This strategy provides a common framework for integrating these issues into the heart of the business model and taking action to achieve sustainable performance.