ALEXANDRA PALT 

What is important today is that we cannot consider extra-financial performance as a “side effect”, an issue that we tackle on the side—apart from economic and financial performance. It has to be completely integrated because environmental and social issues are everywhere, on a daily basis. We have to take care of them because inaction costs much more than action. 

CHRISTOPHE BABULE 

L’Oréal sees value creation as a combination of financial performance and environmental and social performance. This requirement is at the heart of our objective to create value. It is a guiding principle that drives our actions on a daily basis. This is why Alexandra and I are together on this.

What are L’Oréal’s key drivers to create value?

CHRISTOPHE BABULE

Our brands, first and foremost, but beyond that, data, service platforms, e-commerce and technology are all sources of growth at the heart of L’Oréal’s strategy, allowing us to create value going forward. There are others, of course, but our main focus is on ensuring these growth drivers are consistent with our goals in terms of sustainable development, so we can make “profitable” synonymous with “sustainable”.

ALEXANDRA PALT 

As Christophe just cited, the important key drivers for our growth are very clear. But they also have to be aligned with “planetary boundaries”. That is the vision and the ambition we stated in 2020. It means we have to operate within limited planetary boundaries, with limited resources: doing more with less, in the spirit of a circular economy.

CHRISTOPHE BABULE

To succeed, we also need to involve all our stakeholders in our efforts. The aim is to ensure any value we create benefits our entire ecosystem: our suppliers, partners, employees, consumers, shareholders and, of course, the planet.

Also discover

Combining economic and social excellence

On the environmental front, which initiatives were you proudest of in 2021?

ALEXANDRA PALT 

First, internally, there was a lot of operational work to make it happen in brands, in countries, in every activity: putting in place action plans, governance, KPIs, etc. And also very concrete achievements. For example, our subsidiary in the US, L’Oréal’s biggest subsidiary, has already achieved carbon neutrality across its 25 sites.

CHRISTOPHE BABULE

The impact investing initiative we began as part of the L’Oréal for the Future programme. In 2021, the L’Oréal Fund for Nature Regeneration made its first investment. And this is a perfect example of sustainable finance: combining the creation of financial value with the creation of environmental and social value.

ALEXANDRA PALT 

We have achieved important progress on the integration of recycled material in our packaging. Through recycled plastic and through innovation, such as enzyme recycling. We’ve just launched our first enzyme-recycled PET bottle. This is the future, because it means infinite plastic recycling. Another point we are very proud of is that we were able to cooperate within our sector to create a consortium with many other cosmetic and beauty companies to work on a scientific methodology to evaluate the environmental and social footprint of our products, and then make it visible to the consumer.

Also discover

Impact investing: supporting rewilding in the United Kingdom

And on the social front?

CHRISTOPHE BABULE

As part of the Business for Inclusive Growth (B4IG) coalition, in partnership with the OECD and other big companies, we adopted a call to action for a living wage, strengthening the social aspect of sustainable development.

ALEXANDRA PALT 

And our Fund for Women, which was created during the Covid-19 crisis in order to respond to its consequences—especially for vulnerable women or women with special needs—has already supported more than 100 associations and community organisations in more than 30 countries. And this is going to continue over the next few years.

CHRISTOPHE BABULE

Our efforts continue to be acknowledged by independent international bodies like the CDP, who awarded us a triple-A rating for the sixth year running in 2021. And we have also been included in ESG rankings by the rating agencies S&P Global and FTSE4Good.

Three key words to create sustainable growth?

ALEXANDRA PALT 

In order to achieve your goals, you need to have an aspirational and ambitious vision. You need the courage to roll it out and bring it to life, because a vision is forcibly changing mindsets, changing paradigms, and that is not always easy. And we need a lot of cooperation, with all our ecosystem, and also with our competitors. Because this is not a competitive issue. It’s an issue where we all want to work together because nobody wants to be alone facing climate change or biodiversity loss or poverty. So we need to all join forces on this. 

CHRISTOPHE BABULE

If I had to choose three words, I would start with “dare”, because we need to invent a new future. Next, “innovate” because I strongly believe that tomorrow’s solution will not be the same as yesterday’s. And third, as Alexandra said, “cooperate”. Cooperation between teams within L’Oréal and cooperation with other public and private actors. All this in line with our ethical principles, of course.