2022 Universal Registration Document

4.3.1.1.2. Managing risks and controlling the impact of sites on their environment

The Group systematically analyses the industrial risks of its activities, specifically their environmental impact on the soils, water or air of the places where they are performed.

Analysing in order to manage and limit risks

Each site has a general environmental analysis to be updated on a regular basis and whenever a significant change occurs.

All employee activities (permanent or temporary) are covered by an environmental analysis⁽¹⁾. To avoid all forms of pollution (soil, surface water, groundwater, air etc.), sites must comply with the preventive measures described in the internal procedures. There are also contingency plans in the event of accidents for which the relevant persons are trained. Prevention inspections by insurers and periodic EHS audits verify that these measures are properly implemented.

Depending on the site, if significant risks are identified or if L’Oréal’s standards or regulations impose specific requirements, a more detailed evaluation is carried out for the activities concerned. Appropriate, and sometimes immediate, action plans are implemented to reduce significant risks to an acceptable level.

A risk assessment and action plans aim to reduce the potential impacts of:

• any establishment or renovation of a site;
• any introduction of new equipment or manufacturing processes; and
• any changes in industrial processes.

When purchasing land or buildings, L’Oréal conducts due diligence, which includes, in particular, a review of the environmental aspects.

Biodiversity and land use

L’Oréal’s biodiversity and land use commitments are based on the following principles:

• establishing ecological inventories for sites that aim, through the resulting action plan, to preserve, restore and develop the biodiversity of sites in their ecosystems. A local expert conducts this inventory, which may be based on the SITES v2 standards (Reference Guide for Sustainable Land Design and Development), aligned with the LEED environmental certification (Leadership in Energy and Environmental Design);
• reducing the impact of any construction on the environment: This could involve, for example, choosing a zone that is already industrially developed, an existing industrial site or a brownfield site. For administrative sites, this could be an urban area with a high population density close to a residential neighbourhood, ideally located in the city centre or in a neighbourhood well served by public transport. A sustainable building site charter includes these recommendations and requires selective sorting of building site waste and minimised impact on residents during the project phase;
• if possible, place the site on land located more than 30 metres from any wetland (sea, ponds, lakes, rivers etc.), outside natural areas, public green spaces, land with endangered or threatened species, or any other unbuilt areas (farmland etc.);
• prevent soil erosion resulting from wind and/or rainwater runoff during construction, including by protecting the stored arable soil layer to enable it to be reused;
• maintain or restore native natural habitats and biodiversity on the built site;
• maximise green or natural spaces on the site (even beyond local legal requirements), and minimise impermeable surfaces;
• focus on cleaning up polluted sites (e.g. brownfield sites)where development is more difficult due to environmental contamination (real contamination or contamination perceived as such). This allows construction on natural or non-artificial land to be avoided; and
• for future administrative sites, lease buildings that are certified LEED Gold or Platinum (or equivalent) in mature real estate markets.

Surface water

The Group has adopted rainwater standards in order to monitor its quality and avoid its pollution. For instance, sites are equipped with oil separators for parking areas. Similarly, adequate retention capacities must be implemented for any retention and operating area where accidental spills are liable to occur. This retention capacity must allow for fire extinguishing water to be kept at each site.

Industrial wastewater

At the end of 2022, 31 L’Oréal factories had their own wastewater treatment plant. These plants use a range of technologies, including physical, chemical and biological processes, depending on the characteristics of the wastewater and local discharge conditions. In 2022, L’Oréal continued to install wastewater treatment plants for its wastewater, particularly in France.

The sites are responsible for equipment operation and wastewater management, which are subject to specific procedures and instructions. At least once a year, an internal audit or self-assessment of the corresponding facility is organised and documented.

A self-monitoring system representative of wastewater discharges is in place in each factory. It serves to monitor regulated and contractual parameters such as chemical oxygen demand (COD), biochemical oxygen demand (BOD), pH, the temperature of wastewater and substances that could disturb the operation of an internal or external wastewater management facility. This self-monitoring is a tool for detecting the risk of overshooting, which helps anticipate any non‑conformities and initiate corrective actions.

In 2022, the total COD of wastewater leaving the Group’s factories was 0.34 g☑ per finished product, a decrease of 41% in absolute terms and of 44% per finished product compared to 2019, and of 71% and 80%, respectively, compared to 2005. These reductions are related to the operational start-ups of new wastewater treatment plants and the optimisation of existing treatment plants at several Group factories.