Industrial and environmental risks/Environment and safety 
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| Risk identification | Risk management |
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The Group, with its 89 industrial sites (owned factories and distribution centres), including 4 classified as “Seveso high threshold”, is exposed to various industrial risks related to the environment and safety (fires, explosions, failure of installations or safety systems, or even human failure in the operation of the existing facilities or management of the work, etc.), which can result in injuries, accidental pollution within or outside the Group sites, particularly when they are located in a populated area, and/or the temporary unavailability of an industrial site. The occurrence of such events could have a financial, operational and/or eputational impact. |
The Group’s Environment, Health and Safety (EHS) policy aims to minimise the impact on the environment and guarantee the health and safety of employees, customers and the communities in which L’Oréal carries out its activities. As a result of this policy, the risks inherent in our business activities are systematically identified and brought under control. The Operations Department issues internal rules that set out the principles of L’Oréal’s EHS policy. Each site is covered by an EHS officer. EHS risk management programmes, methods and tools are implemented and the corresponding training is being rolled out systematically. EHS performance indicators are collected monthly from all factories, distribution centres, and administrative and research sites with over 50 people. Specific audits are conducted by internal EHS teams, and external independent experts. The fire risk is controlled by very strict fire prevention standards (National Fire Protection Association standards or equivalent). Industrial sites classified as “Seveso” are subject to specific procedures adapted to the nature of the risks related to storage of chemicals or flammable materials and are in compliance with the regulations. Since 2020, the Group has extended compliance with the main requirements of the European Seveso Directive beyond the European Union to all sites it operates worldwide. Across all its sites, the Group strives to reduce its greenhouse gas emissions, its water consumption and its waste generation and to limit the impact of its activity on biodiversity. It also pledges to reduce the footprint from transportation of its products and to no longer send waste to landfill. Details of how the risk relating to the temporary unavailability of an industrial site is managed are given in the section relating to “Product availability”. |
3.5.3.3. Legal and regulatory risks
Legal and regulatory risks/Risk of non-conformity 
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| Risk identification | Risk management |
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Many general and specific laws and regulations apply to the Group, such as the European REACH and CLP (Classification, Labelling, Packaging) regulations intended to strengthen the human and environmental safety of chemical products, the European Cosmetics Directive governing animal testing of ingredients, legislation on competition law, corruption and the control of international flows, including economic sanctions policies. The diversity and constant reinforcement of the regulatory environment expose the Group to a risk of non-conformity or increased compliance costs. L’Oréal remains exposed to the risk of default or fraud, which could have an impact on its reputation, its business activities and its results. In the ordinary course of its business, the Group will potentially be involved in all types of legal actions and may be subject to tax, customs and administrative audits. |
In accordance with its Code of Ethics, L’Oréal attaches particular importance to compliance with the laws and regulations that apply to it. This obligation to comply with local legislation is reaffirmed in the Group’s Legal Charter, which sets out the rules applicable within the Group in terms of contracts, corporate law, intellectual property and competition law, embargoes and economic sanctions, and protection of personal data in particular. To ensure compliance with these rules, the Group has implemented a robust governance structure involving all of the Group’s operational entities and support departments. This governance enables the Group to monitor legislation on an ongoing basis and to take any measures necessary to comply with it in a timely manner. To ensure any embargoes are observed, the Group has put in place rules on the terms of delivery and transport of its goods, with the aim of ensuring the control and compliance of formalities in terms of customs imports and exports. Training on customs fundamentals is also delivered to all appropriate employees in the Operations Department. The Group’s Legal Department has set up dedicated training courses in competition law for all appropriate employees. L’Oréal is also involved in an ongoing dialogue with national or regional authorities in charge of specifically regulating products in its sector through the professional associations to which it belongs. With regard to the REACH and CLP regulations, L’Oréal communicates proactively with its European suppliers in order to ensure a continuing supply of compliant raw materials. An action plan has been drawn up at L’Oréal in order to improve the design and methods used to assess the safety of raw materials. It led to the end of testing finished products on animals in 1989 (14 years before it became a legal obligation in Europe) and the development of predictive evaluation strategies to meet European regulations. In the areas of fraud and corruption, the deployment to all Group subsidiaries of programmes to prevent corruption (see section 4.3.4.) and raise awareness of fraud risk contribute to the management of these risks. In terms of taxation, the Group relies on a tax policy and the systems described in section 4.3.5. |