Since 2002, the Group’s suppliers have had to sign the Mutual Ethical Commitment Letter. This letter, reviewed in 2021, sets out the requirements and commitments that L’Oréal imposes on its suppliers in accordance with the Group’s programmes and policies concerning ethics, corporate responsibility, human rights, working conditions and compliance. Now entitled the “Mutual Ethical Commitment Letter”, it has been rolled out gradually to all suppliers worldwide (see section 3.4).
The Group’s subcontractors and its suppliers of raw materials, packaging, production equipment and POS/promotional advertising items located in countries identified as being at risk according to Verisk Maplecroft are subject to a mandatory social audit (and prior to any inclusion on the supplier panel). These audits, performed by independent service providers, aim in particular to:
The Group finances the initial audits as well as the re-audits that take place three years later. The follow-up audits to verify the effectiveness of the corrective actions are paid for by the suppliers.
Ten areas are audited: child labour; forced labour; the environment, health and safety; compliance with the laws relating to trade unions; non-discrimination; disciplinary practices; harassment or a hostile work environment;due payment of remuneration and benefits; working time;and relations with subcontractors.
L’Oréal’s social audit is mainly based on the internationally recognised SA 8000 standard. However, the Group has also imposed more stringent criteria, particularly in terms of the minimum age for child labour. This is set at 16 years of age for all employees of suppliers, a higher age limit than that required by the International Labour Organisation (ILO).
A tool to manage social audits is used to plan the audits with the external service provider’s system and manages the results and action plans for all suppliers concerned. An online training programme that supplements the Sourcing Discovery training module is available to all purchasers. This explains to every new purchaser the importance of the social audit programme and how purchasers must make it part of their daily process. The Group’s purchasers accordingly promote the continuous improvement of their suppliers in line with the Group’s standards.
Since 2019, over 3,359 supplier sites have been audited in accordance with the L’Oréal standard (see section 3.4.7.3.):
In 2014, L’Oréal launched a programme for assessing strategic suppliers(2) and their sustainable development policy. The EcoVadis assessment is helping to refine the analysis of suppliers’performance and identify areas for improvement in terms of human rights protection, business ethics, environmental preservation and diversity, equity and inclusion.
In 2022, 859 suppliers were subjected to an EcoVadis assessment of their social, environmental and ethical policies, as well as the implementation of those policies by their own suppliers. 306 of them, representing 94% of the Group’s strategic suppliers, obtained an average score of 61/100.
Since 2007, L’Oréal has involved its suppliers in the process of measuring and reducing its greenhouse gas emissions by encouraging them to participate in the CDP Supply Chain programme. In 2022, 652 suppliers participated in the CDP Supply Chain, representing 80% of the 814 suppliers invited. Both large industrial groups and small and medium businesses were selected from all purchasing areas, everywhere in the world. The average supplier result in 2022 was “B-”.
In the direct purchases category, the suppliers participating int he CDP Supply Chain account for 89% of expenditure in 2022. The average mark for the direct suppliers was “B-”.
In December 2015 at the time of COP21, L’Oréal strengthened its objectives and accelerated the implementation of its efforts to combat climate change. Since then, suppliers have been encouraged, via the CDP Supply Chain, to report their carbon emissions, set targets for reducing greenhouse gas emissions and communicate their action plans to achieve this.
☑ The Statutory Auditors have expressed reasonable assurance about this indicator.
(1) Audits where the auditor was unable to access the site or sufficient data are included in this number. They represent 2% of the total number of audits. However, these cases are excluded from the analysis of non-conformity by area, as described in the Vigilance Plan.
(2) Strategic suppliers are those whose added value is significant for the Group and who, through their weight, their innovations, their strategic alignment and their geographical deployment, provide long-term support for L’Oréal’s strategy.
