2022 Universal Registration Document

Chapter 3 : Risk factors and risk management

Applicable rules to prevent risks of serious adverse impacts on Safety and Health in the workplace and the Environment
EHS Guidelines

The Group’s Environment, Health and Safety (EHS) policy aims to minimise the impact on the environment and guarantee the health and safety of the employees of its Subsidiaries and Suppliers, its customers and the communities in which L’Oréal carries out its activities. For the Subsidiaries, this policy is built on an EHS management system composed of standards with stringent requirements that set the principles of L’Oréal’s EHS policy, which is all included in the EHS guidelines.

Additional Environment, Health and Safety in the workplace actions

In addition to the action taken as a result of the risk analysis conducted on the business activities of the Group and its Suppliers, L’Oréal conducts Environmental Health and Safety in the Workplace initiatives in addition to those implemented under the French law on Duty of Vigilance. These are described in chapter 4.

L’Oréal’s commitment to Environment, Health and Safety in the workplace 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 each year.

For example, this includes the following additional actions and commitments:

  • in 2015, L’Oréal was one of 100 leading companies to join the Science Based Targets programme;
  • in 2018, L’Oréal became a partner of the Ellen MacArthur Foundation: with Act4Nature, in the context of individual commitments, L’Oréal set biodiversity objectives for 2030;
  • in 2019, L’Oréal was one of the first companies to sign the Business Ambition for 1.5°C pledge of the UN Global Compact, thereby committing to reach “net zero emissions”by 2050 over its entire value chain, in accordance with the1.5°C path of the IPCC; and
  • in 2020, L’Oréal became a signatory of the TCFD.
(i) Additional actions intended for Sites of Subsidiaries

At its own sites, L’Oréal implements the LIFE (Life threatening Incident or Fatality Event) programme, which covers activities on all its sites that, if not controlled, could result in potentially serious injury and illness. The Group extends the ambition of moving towards “zero accidents” by ensuring the sustainability of actions and defining post-incident emergency preparedness requirements.

The Sharing Beauty with All programme has helped to reduce the environmental footprint of the Group’s sites: between 2005and 2020, our factories and distribution centres reduced their CO2 emissions by -81% (in absolute value), their water withdrawal by -49%(1), and their waste generation by -37% (1).

The commitments made by the Group for 2030 as part of its L’Oréal for the Future programme are aimed at ensuring compatibility of the Group’s activities with a planet that has limited resources(2). The main environmental objectives of the programme concerning Subsidiaries are as follows:

  • climate: reaching “carbon neutral”(3) status for all operated sites by 2025, by improving energy efficiency and using100% renewable energy. L’Oréal is also committed to halving the transport footprint of its products by 2030;
  • water: in 2030, 100% of the water used in our industrial processes will be recycled and reused in a loop;
  • biodiversity: by 2030, all of our operated buildings and all industrial sites will have a positive impact on biodiversity compared to 2019. A methodology for monitoring the Biodiversity commitment was developed in 2021 and rolled out to all of the Group’s sites in 2022. Becoming “biodiversity net positive” is achieved by meeting two conditions: the first is improving the potential for hosting biodiversity on the Group’s sites, the second concerns developing the biodiversity culture of employees;
  • natural resources: by 2030, 100% of the waste generated in our operated sites will be recycled or reused. L’Oréal is also committed to no longer send waste to landfill.

These objectives are accompanied by monthly reporting of detailed indicators used to monitor evolutions in results in each of these areas and to identify potential anomalies and incidents.

The Group is engaged in a process of continuous improvement of its EHS performance through a programme to achieve ISO certification for its operated sites, in order to anchor the EHS policy in the long term: ISO 45001 for the management of employee health and safety and improvement in their working conditions; ISO 14001 for the management of environmental impacts and improvement in environmental performance; and ISO 50001 for energy management and energy performance improvement.

“Culture” audits are conducted by internal EHS specialists to assess the degree to which EHS culture has been rolled out to all Subsidiary employees. 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 levels of the hierarchy.

Detailed information on these additional actions is available in chapter 4.

(1) Per unit of finished product.

(2) See chapter 4 and the summary table in 1.3.2.

(3) A site can claim “carbon neutral” status if it meets the following 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. The “carbon neutral” status, as defined above, is achieved without carbon offsetting. See section 4.3.1.1.3. B/.