2022 Universal Registration Document

L’Oréal’s strategy is based on Glocalisation, that is to say the globalisation of its brands, with a detailed 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.

Sustainable development for sustained success

For many years now, L’Oréal has been evolving its model to address the world's major changes, and sustainable development has been a key pillar of this transformation. L’Oréal has made this a strategic priority. Consequently, management as a whole and all its teams implement an ambitious CSR policy.

In June 2020, L’Oréal launched the second generation of its sustainable development commitments⁽¹⁾, under the umbrella of the L’Oréal for the Future programme. It includes new ambitious and concrete objectives for 2030 in order to coverall of the Group’s impacts. These include both the impacts associated with its value chain, from production to distribution, as well as those related to its sourcing or the use of products by consumers.

In 2015, the Group also undertook to define Science-Based Targets (SBT). The objective is to reduce its greenhouse gas emissions across its value chain and over the long term in accordance with the Paris Agreement on climate change. In December 2017, the SBT initiative validated the commitment proposed by the Group: to reduce its Scope 1, 2, and 3greenhouse gas emissions 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 activities within the context of “planetary boundaries” (what the planet can support 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.

CSR governance

To support this process, the Group has developed a strong governance structure.

Every year, the Board of Directors determines L’Oréal’s strategic orientations. These orientations integrate the challenges of climate change and, more generally, sustainable development matters as well as the Group’s sense of purpose 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, which are responsible for investigating the matters within their area of expertise in the determination and monitoring of the non-financial strategy (see section 2.3.4.). Every year, the Chief Corporate Responsibility Officer reports on the Group’s activities to the Board of Directors and takes part to the meetings of the Strategy and Sustainability Committee. Before each meeting, the members of the Board of Directors receive a status update on the L’Oréal for the Future programme that details its specific advances. In 2022, the Directors took a CSR training course (see section 2.3.2.).

The comprehensive transformation plan affects all Divisions, Zones and support functions. To implement it, the Chief Executive Officer can rely on the commitment of every member of the Executive Committee in their field of responsibility. He works together with the Executive Committee to implement the strategic directions on non-financial matters. Status updates on sustainable development matters are provided regularly in order to define and implement the necessary action plans. A network of sustainable development Coordinators, made up of members of the Management Committees, is responsible for the deployment of L’Oréal for the Future in each Division, Zone and entity.

Within the Executive Committee, 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, and assesses and manages risks and opportunities related to environmental and societal challenges at Group level through the action plans implemented.

Under her direction, different internal Committees related to sustainable development define the roadmaps for each of the entities represented (Operations, Research, Divisions, Zones). The experts responsible for the rollout of the programme participate in these Committees. Each Committee defines annual objectives and manages their rollout throughout the value chain.

Twice a year, the Chief Corporate Responsibility Officer brings together some members of the Executive Committee in the L’Oréal for the Future Executive Committee to make strategic decisions about the programme.