2022 Universal Registration Document

Chapter 1 : Presentation of the Group – Integrated Report

Research with commitment, in full transparency
Beauty without animal testing

In the 1980s, Group committed to developing alternatives to animal testing to assess the safety of its ingredients and its products. Today, none of the Group’s products or ingredients are tested on animals by L’Oréal. L’Oréal definitively stopped the safety testing of its products on animals in 1989. The Group believes that there are other effective ways of ensuring that cosmetic products are safe. Over 40 years ago, L’Oréal was the first company to develop reconstructed skin, which is a more accurate way to test the effects of ingredients and cosmetic products on human skin than any other method;this is currently the case in the laboratories of L’Oréal’s subsidiary, Episkin, in France, China and Brazil. It is available to governments, organisations and other companies so they do not have to resort to animal testing.

L’Oréal contributed to the approval of dozens of alternative methods of testing the safety of its products and has also been active in advocating for alternative methods in China. L’Oréal has been working with the Chinese authorities for over10 years on introducing methods that are free from animal testing for all cosmetic products. Over the last few years, China abolished the requirement to carry out animal testing that applies to most cosmetics sold in the country. Since 2014,the Chinese authorities no longer test non‑functional cosmetics (such as shampoo or make-up) that are manufactured locally. Since 2021, these same cosmetics imported into China no longer need to be tested on animals, subject to a certificate of compliance with manufacturing best practices.

In 2022, Episkin launched a new innovative reconstructed cornea model (HCE SkinEthic™), which is already available in Brazil, Argentina, Colombia and Chile. Based on this new model, the Time-To-Toxicity (TTT) evaluation method was included in the OECD(1) test guidelines in 2022. Approval of this method has made it possible to predict eye irritation with a single in vitro test. This is a major step in the fight against animal testing.

Transparency: a key challenge in recent years and for the future

L’Oréal continues to strengthen its commitment to transparency in order to meet growing consumer demand for information about the composition of products. Launched in 2019, the “Inside our Products” website is available in45 countries and in 8 languages, and references more than1,300 ingredients. This content is gradually being added to the websites of the Group’s major brands. At the same time, the expansion of the Product Impact Labelling (PIL) system provides consumers with information on the environmental and social impact of certain products in the Garnier, La Roche-Posay, L’Oréal Paris, Vichy and Biotherm brands in France. The latest transparency initiative is the In Fragrance scheme: based on an analysis of 20,000 perfume formulas and thanks to the collaboration of our main fragrance suppliers (Firmenich, Givaudan, IFF and Mane), this approach allows consumers to understand the natural or synthetic origin of ingredients, their olfactory properties and the way in which they are combined to create the fragrance of products. As are sponsible leader in the beauty industry, L’Oréal would like this model to be open to other players in the sector, both manufacturers and retailers, so as to provide more transparency to consumers.

1.2.9. Operations, specialised expertise and core values to contribute to growth

L’Oréal’s Operations Division creates innovative, inclusive and sustainable beauty in collaboration with its partners. They harness the power of technology and strive for excellence to design, develop, supply, produce and distribute products and services worldwide. Consumers are at the heart of the decisions made by the Operations Division, which seeks the most agile and effective solutions, and guarantees compliance with strict standards of quality, safety and CSR at the global level.

Resilience and transformation for growth

Relying on an approach of operational excellence conducted for years, the expertise and commitment of the Operations teams have boosted the Group’s growth. In a challenging global context, they have demonstrated their agility and resilience, while pursuing their digital, sustainable and innovative transformation. The high–technology industry is at the heart of the Operations Division, and this enhances its agility across the entire value chain, enabling it to meet market challenges.

Thanks to science and new technologies, the Operations Division can be innovative and is able provide a specific response to the new challenges posed by consumer expectations for personalisation, agility and traceability, on the one hand, and to the employee experience on the other, such as simplification, ergonomics and real-time access to information.

In production, the combination of new technologies and the deployment of additional capacity worldwide provide flexible and agile production solutions. The omnichannel transformation of the supply chain continues, providing an optimised customer experience and increased interaction with consumers, and responsibly promoting the use of new technologies (IoT(2), connected products, big data).

(1) Organisation for Economic Co-operation and Development.

(2) Internet of Things.