Scope of consolidation: environmental indicators cover 98.8%of the factories and distribution centres, as well as administrative sites and research centres with more than 50 people. Environmental indicators for sites sold or closed during the financial year are reported in full up to the date they exit the scope. Sites joining the Group have a maximum period of two years to integrate the environmental and safety reporting systems. The indicators do not take into account the impacts of exceptional external incidents or events, such as construction or extension works. Similarly, in the special case where a subcontractor is located geographically on the sites, its impacts are not taken into account In 2022, 85 administrative sites and research centres participated in the reporting. Some sites are unable to obtain certain information(e.g. water withdrawal, waste generation etc.) and may temporarily use estimates, which must be validated by the Operations Department. In addition, 100% of these sites provided information on energy consumption and CO2 emissions, 100% of the sites reported their water consumption and 100% of the sites reported their quantity of waste. The sites of Vichy and La Roche Posay are part of a single company (Cosmétique Active Production) but are accounted for as two Group factories. Four Group factories contain a logistics centre in their building. These four logistics centres are not included in the count of the total number of Group logistics centres.
Indicators: the indicators chosen are those used in the management of the Company’s sites. They reflect the results of the Group’s Environment, Health and Safety (EHS) policy.
Activity: the activity of L’Oréal sites is measured on the basis of finished goods for industrial sites and hours worked for administrative sites and research centres. The production units included are the equivalent units produced on-site or affected by occasional subcontracting. Hours worked are the hours performed on-site, thus excluding remote working hours.
Greenhouse gases: the Group’s CO2 emissions are calculated in accordance with the concepts defined by the GHG Protocol, and monitored according to the Market-Based CO2 indicator.
Management of the reference year: in accordance with the methodology of the GHG Protocol relating to the management of reference years, CO2 emissions data are reviewed, if necessary, in accordance with the rules defined by the Group using a like-for-like recalculation. In this way, base years take into account investments and divestments (brands, sites), changes in methodologies, significant errors and changes in scope. Any changes in base years are validated by the Statutory Auditors.
Scope 1: the main emissions are related to natural gas; the consumption data are taken from supplier invoices. Potential leaks of cooling gas from refrigeration units are also included in the calculations. The emission factors used come from the ADEME Base Carbone database (Agence de l’Environnement et de la Maîtrise de l’Énergie, the French Agency for the Environment and Energy Management) for fossil fuels, such as natural gas, fuel oil, etc. and the 6th report of the IPCC (IPCCAR6) for cooling gas. All data are incorporated into the internal reporting software on a monthly basis.
Scope 2: the main emissions are related to electricity; the consumption data are taken from supplier invoices. The emission factors used come directly from the sites’ electricity suppliers, using the Market-Based approach, or from the International Energy Agency (IEA) if the data are not available. The emission factors used for emissions related to heat, cooling and steam networks come from local suppliers. All data are incorporated into the internal reporting software on a monthly basis.
Scope 3: Scope 3 emissions, linked to the L’Oréal value chain, are calculated annually using emission factors from various databases, specific to each Scope 3 category, including, among others, the ADEME Base Carbone database, EcoInvent, the DBEIS and the IEA.
Level of uncertainty: for Scopes 1 and 2, the level of uncertainty at the Group level is approximately 1% for factories and distribution centres, and 5% for administrative sites and research centres. For Scope 3, the level of uncertainty is higher given the volume of data required for calculation, such as the emission factors of the energy used to heat the water necessary for the usage phase of our rinse-off products all over the world, the quantity of water necessary for rinsing, CO2 emissions of raw materials and packaging suppliers, distances travelled for transportation etc.
Measurement of the global CO2 impact of the Group’s business activities is essential information. In light of the commitments made to combating climate change, L’Oréal strives year after year to increase the reliability of this data. The level of uncertainty of the Group’s Scope 3 emissions is estimated to be between 20% and 30%. Unlike Scopes 1 and 2,changes in Scope 3 emissions may relate more to the quality of the data collected and the calculation methods used, rather than to a real change in performance. This margin of uncertainty with regard to Scope 3 is a reality for all companies and does not make it possible to consider this data as an adequate benchmark or method of performance assessment.
“Carbon neutral”(1): see section 4.3.1.1.3. The Vichy and La Roche Posay sites are part of a unique company (CAP), but are recognised as two Group factories, including in the recognition of sites that have achieved “carbon neutral” status. The diesel-powered handling equipment operated by one of the Group’s sites (Libramont plant) is not included in the“carbon neutral” calculation. It represented 3 tonnes of CO2eq in 2022. A study will be launched in 2023 to assess the overall impact in terms of tonnes of CO2eq of this use on all the sites. The aim is to remove these uses or find alternatives(e.g. electric motor)
Wastewater: for industrial sites, the Chemical Oxygen Demand (COD) covers the volumes of wastewater leaving the plant, whether or not they have been treated on the site.
(1) A site can claim “carbon neutral” status if it meets the following requirements: •
Direct CO2 (Scope 1) = 0, with the exception of: the gas used for catering, the fuel oil used for sprinkler tests, fossil energy consumptions during maintenance of on-site renewable facilities, cooling gas leaks if they are lower than 130 tonnes CO2eq./year; and •
Indirect CO2 Market Based (Scope 2) = 0. The renewable energy sources must be located on site or less than 500 kilometres from the site, and be connected to the same distribution network. The “carbon neutral” status, as defined above, is achieved without carbon offsetting. See section 4.3.1.1.3. B/.
