2022 Universal Registration Document

L’Oréal’s Sense of Purpose (raison d’être) is a core principle for the Group, to see ourselves as a high-performing, committed, responsible, inclusive company showing solidarity in decades to come. L’Oréal’s raison d’être is included in the strategies defined by its Board of Directors and its business model.

L’Oréal’s sense of purpose was developed following the work implemented over almost two years, initiated and driven at the highest level by Mr Jean-Paul Agon and Mr Nicolas Hieronimus, as well as several members of the Executive Committee. L’Oréal’s raison d’être was the result of dialogues with the Group's employees in three of its key countries (France, the United States and China) and many external stakeholders, including consumers. The progress made was discussed several times in the Executive Committee. For L’Oréal, the aim was to collect and formalise its contribution to the world as a company, its values and its commitments in one document.

This raison d’être was approved on 6 February 2020 by the Board of Directors, who incorporated it into their Management Report published in the 2019 Universal Registration Document and presented to the Annual General Meeting of Shareholders on 30 June 2020.

In 2022, L’Oréal received the Award for ESG Purpose and Commitments at the 2022 General Meeting and Gender Balance Awards ceremony, organised by the Institut du Capitalisme Responsable.

A single sentence epitomises L’Oréal’s Sense of Purpose: “Create the beauty that moves the world.” It is defined in concrete actions made to consumers, employees, clients, suppliers, shareholders, service providers and communities. L’Oréal is committed to fighting climate change, by respecting biodiversity and preserving natural resources, and to championing the cause of women. The majority of the

Group’s brands have supported their cause since 2018,in fields such as combating violence against women with the“Abuse is Not Love” programme from Yves Saint Laurent Beauty, with L’Oréal Paris backing the Stand Up campaign against street harassment and Lancôme helping women get access to reading with the Write her Future programme or in the environmental field with Biotherm’s⁽¹⁾ Water Lovers programme.

In its Management Report, dislosed in the present document, L’Oréal’s Board of Directors reports on the implementation of the commitments included in its raison d’être, and on the progress towards the goals set:

• economic performance is inseparable from corporate social responsibility performance. The results of the Group’s non-financial performance, which are reviewed by external auditors along with its financial performance, reflect the achievements of L’Oréal arising from its sense of purpose. Chapter 4 reports on the social, environmental and societal policies and progress, inclusion and ethics within the L’Oréal for the Future programme covering the Group’s commitments to sustainable development;
• L’Oréal also presents its progress and achievements in non‑financial areas through its annual reporting made to the United Nations Global Compact;
• this chapter also reports on the Group’s financial performance, particularly through its business model (see section 1.2.); and
• the Group’s CSR performance is one of the factors considered in determining the variable portion of the remuneration of L’Oréal’s executive corporate officers (see section 2.4.) and the Group’s principal executives (see section 4.1.).

1.1.2. The strategy and fundamentals of L’Oréal

1. A clear vision and strategy

L’Oréal has defined a clear vision that is broken down into two points: its Sense of Purpose (raison d’être), which is detailed above, and Beauty for All. L’Oréal aims to offer women and men around the world the best in cosmetics in terms of quality, effectiveness, safety, sincerity and responsibility in order to meet all their needs and all their beauty wishes in their infinite diversity. More than ever, L’Oréal’s vision takes on its full meaning and represents a strong anchor in this increasingly unpredictable and complex environment.

L’Oréal’s strategy is Glocalisation, meaning the globalisation of its brands with a detailed understanding and respect for local differences, with the aim of winning and satisfying 1.5 billion consumers. The goal is to offer beauty by responding to the specific aspirations of consumers in every region of the world. In contrast to standardisation, it is based on careful attention to consumers and a deep respect for their differences.

2. One single business: beauty, nothing but beauty and all beauty

For over a century, L’Oréal has carried out a single business: creating beauty. Cosmetics are rich in meaning. They allow each person to boost their self-confidence, express their personality and open up to others.

Focusing on a single business represents a major competitive advantage for L’Oréal. The Group boasts more than one hundred years of cosmetic expertise, talented specialists and an in-depth knowledge of consumers. This is built on a detailed knowledge of beauty cultures, needs, desires and aspirations. L’Oréal covers all continents across more than 150 countries, all product categories⁽²⁾, all distribution channels includinge‑commerce and Travel Retail, and all price segments.

By focusing its energy on a single business, along with an obsession for seizing “what is new and fresh” (“Saisir ce quicommence”), L’Oréal is able to identify new consumer trends and respond rapidly. The digital revolution in particular, in perfect alignment with “social beauty”, connected and shared, acts to speed up the development of the beauty market driven by economic, technological, demographic and sociological developments.