2022 Universal Registration Document

4.5. Methodological notes

4.5.1. Social and health and safety data

4.5.1.1. Social data

Scope of consolidation: the employees indicated and their breakdown correspond to the total headcount⁽¹⁾. The 371 employees in the Retail Excellence 4, Thermes de La Roche Posay, Saint Gervais Mont Blanc, École OA and Mugler Fashion entities are included in the total workforce. The distributions of these employees are calculated in proportion to the distribution of France employees. They are excluded from the indicators on diversity, training, minimum salaries and the number of collective agreements.

Indicators: the indicators chosen are those used in the management of employees and of the social aspects of the Company. They reflect the results of the HR policy.

Data: four methods are used to collect data for the defined scope. Most of the data are collected using the dedicated“Country Reporting” Intranet, available in all countries in which there is a L’Oréal “subsidiary”. In the context of this “Country Reporting”, a subsidiary is a structural HR concept: each subsidiary comprises one or more legal entities, and covers one country. By way of exception, Korea, the United States and Hong Kong each have two subsidiaries, while some subsidiaries cover several countries: the Baltic States (Lithuania, Latvia, Estonia), Croatia (Croatia, Slovenia), UAE. (UAE, Saudi Arabia). The system covers several topics: employees; training;absenteeism; labour relations; the L’Oréal Share & Care programme; remuneration; diversity; recruitment; freedom of association; and profit sharing. At the beginning of the financial year, the local HR Directors provide the required data for the previous year. Other data are collected by the Training and Recruitment Departments using dedicated systems which follow the same operational and dissemination approach. If information is not consolidated for the entire scope of the Group, it can be extrapolated from the available results for the entities connected to the local Information Systems (IS), provided that the scope covered by such entities is representative. The data relating to specific populations, such as expatriates or key positions, for example, are gathered from the “CAROL” online career monitoring system, deployed in all subsidiaries of the Group. Trained employees include the total number of employees, including those who left the Group during the year, who completed at least one training course during the year, regardless of the format (in-person, virtual classroom, digital) and length of the training course. Hours spent in a training course that straddles two years are recorded in the second year. Training hours may include lunch breaks for all-day training. Concerning the L’Oréal Share & Care indicator relating to healthcare coverage, the best practices in the countries are regularly evaluated in each country in which the Group is present.

A process of continuous improvement of these systems has been put in place. They are reviewed each year, taking into account the Statutory Auditors’ recommendations and the monitoring objectives for subsequent years (updating the indicators to be monitored; improving their definition and their communication, monitoring and control process).

4.5.1.2. Health and safety data

Scope of consolidation: safety indicators relate to 99.2% of the sites, such as factories, distribution centres, administrative sites, research centres with more than 50 employees, stores, and sales forces. At year-end 2022, 172 administrative sites and research centres, sales forces and stores participated in the reporting. To achieve better monitoring of accident history by type of site, safety reporting from administrative sites has been refined and split into three categories: administrative sites with only administrative staff, sales forces for travelling staff and stores for in-store beauty consultants managed by L’Oréal. The safety indicators of the factories, distribution centres, administrative sites or research centres sold or closed during the financial year are reported in full up to the date they exit the scope. The factories, distribution centres, administrative sites or research centres that join the Group have a maximum period of two years to integrate the environmental and safety reporting systems.

Indicators: the indicators applied are those used in the management of the Group’s sites. They reflect the results of the Group’s Environment, Health and Safety (EHS) policy. Hours worked report the time during which the staff is exposed to professional risks, including remote work or the equivalent. They include overtime hours. However, they do not include public holidays or days of absence, such as sick days and paid holidays.

Data: the health and safety data are collected using the dedicated Intranet-based site reporting system. This is available in all countries in which there is a L’Oréal subsidiary. The required data are reported every month by the local managers. When the data are compiled, each site or zone must validate the accuracy of all the data provided.A process of continuous improvement of these systems has been put in place.

The systems are reviewed each year, taking into account the Statutory Auditors’ recommendations and monitoring objectives for subsequent years (updating the indicators to be monitored; improving their definition; and enhancing the communication, monitoring and control process).

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,before being included in the reported figures.