2022 Universal Registration Document

4.3.1.4. Meeting the most demanding climate standards

4.3.1.4.1.GHG assessment: an annual exercise

L’Oréal carries out an annual Greenhouse Gas assessment(GHG assessment or balance) for all the Group’s activities, in order to measure its CO₂ emissions and identify the action plans that will enable to reduce its impact. Performed since2007, this assessment is conducted in accordance with the Greenhouse Gas Protocol (GHG Protocol) rules, the international reference method for recording GHG emissions. It makes it possible to determine the Group’s total carbon footprint in three categories – Scopes – defined above in section 4.3.1.1.3.

In 2022, the GHG assessment of the L’Oréal Group was estimated at 11,270 thousand tonnes of CO₂equivalent.

Scopes 1 and 2 – emissions measured and reported on a monthly basis

Scopes 1 and 2 correspond to those for which the Group takes direct action:

By implementing energy sobriety approaches and significantly improving the energy efficiency approaches of buildings, equipment and industrial processes;
by making local contributions to the transition to renewable energies in the countries or sites where the Group operates. L’Oréal has implemented an ambitious renewable energy policy that prioritises on-site production and consumption(self-consumption); long-term Power Purchase Agreements(PPA); and finally the purchase of locally produced renewable energy.

These CO₂ emissions are measured by all the Group’s site sand reported monthly.

	2025 TARGETS	2020	2021	2022
Industrial sites	Industrial sites 2025 TARGETS - 100% (vs. 2005)	Industrial sites 2020 -81%	Industrial sites 2021-87%	Industrial sites 2022-91%
Administrative sites and research centres	Administrative sites and research centres 2025 TARGETS - 100% (vs. 2016)	Administrative sites and research centres 2020 -76%	Administrative sites and research centres 2021-83%	Administrative sites and research centres 2022-91%

Changes in the published figures for Scopes 1 and 2 since 2016 (in thousands of tonnes of CO₂ equivalent)⁽¹⁾

		2016	2017	2018	2019	2020	2021	2022
Scope 1	Scope 1 Industrial sites	Scope 12016 55.5	Scope 12017 49.7	Scope 12018 46.6	Scope 12019 43.6	Scope 12020 39.0	Scope 12021 25.9	Scope 12022 18.9☑
	Administrative sites and research centres	6.5	2016 8.0	2017 7.7	2018 6.4	2019 4.1	2020 1.8	2021 0.9
	Group	62.0	201657.7	201754.3	201850.0	201943.1	202027.7	202119.7
Scope 2	Scope 2 Industrial sites	Scope 22016 25.7	Scope 22017 15.9	Scope 22018 8.9	Scope 22019 8.2	Scope 22020 7.0	Scope 22021 5.7	Scope 22022 2.5☑
	Administrative sites and research centres	26.5	2016 25.3	2017 25.7	2018 22.1	2019 5.7	2020 4.9	2021 2.9
	Group	52.2	201641.2	201734.6	2018 30.3	201912.6	202010.6	20215.4
Scopes 1 + 2	Scopes 1 + 2 Industrial sites	Scopes 1 + 22016 81.2	Scopes 1 + 22017 65.7	Scopes 1 + 22018 55.5	Scopes 1 + 22019 51.8	Scopes 1 + 22020 46.0	Scopes 1 + 22021 31.6	Scopes 1 + 22022 21.3☑
	Administrative sites and research centres	32.9	2016 33.2	2017 33.4	2018 28.5	2019 9.8	2020 6.7	2021 3.8
	Group	114.2	201698.9	201788.9	201880.3	201955.8	202038.3	202125.1

(1)These data present the reported figures each year in the different management reports. In rare cases, certain data already published for the preceding year may be modified when inaccuracies or errors are discovered after the end of the financial year. These data are monitored and included in the annual consistency review. They are included in the reported figures each year.

(2)In 2017 only, the published Scopes 1 and 2 had been expanded with emissions estimated annually for vehicles operated under long-term leases and for branded retail stores. These emissions are not included in the data for 2017 published in this table.

(3)The Scope 1 and 2 emissions published since 2016 do not include emissions related to the energy consumption of operated stores (branded retail stores) and vehicles operated under long-term leases (car fleet), as the majority of these emissions are estimated. These emissions amount to approximately 66 thousand tonnes of CO2 equivalent. Work will be carried out in early 2023 to reintegrate these emissions into Scopes 1 and 2 and to publish a complete scope for the next financial year.

Scope 3 – emissions estimated annually

Scope 3 covers all other greenhouse gas emissions not directly related to the sites operated by the Group or to the processing of products in the factories but to other stages in its life cycle(procurement, transportation, use, end of life, etc.) and other impacts related to the Group’s activities (business travel, etc.).These emissions are the subject of an annual estimate according to the GHG Protocol methodology.

In 2022, work was carried out on Scope 3 of the GHG Assessment in order to improve its input data, limits and emission factors. For 2022, L’Oréal Group’s Scope 3 is estimated at 11,245 thousand tonnes, an increase of around0.7 million tonnes compared to 2021, primarily due to direct and indirect purchases.

☑The Statutory Auditors have expressed reasonable assurance about this indicator.