2023 universal registration document

3. Risk factors and risk management

Monitoring and control system in respect of Human Rights

A total of 13 audits have been carried out at the Group’s factories and distribution centres, covering all Human Rights Rules with the exception of those relating to health and safety, which are subject to specific audits and organised separately.

  • With regard to L’Oréal employees, an audit revealed that the weekly working hours of two employees on the same site were not in line with the Group’s policy. The policy defines a remediation plan that includes changing the working hours.
  • The other non conformities flagged during these 13 audits concerned employees of external companies (temporary workers or subcontractors) working at Group-owned sites. These non conformities can be broken down as follows:
  1. Child labour: it is reported that, in 2023, 19 employees were aged 16 to 18The scope of consolidation of human rights data arising from ethics reporting is identical to that of social data. ; there were no employees under the age of 16 working at the Subsidiaries;
  2. Forced labour: an audit found that three employees of a temporary work company did not have copies of their employment contracts; to remediate this, the site quickly ensured that these individual non conformities were resolved by the company concerned and defined a procedure to systematically verify that external workers have copies of their employment contracts;
  3. Freedom of association: the audits revealed no non conformity;
  4. Non-discrimination: the audits revealed no non conformity;
  5. Working hours: an audit revealed that the hours worked by three employees of a temporary work company had not been recorded; to remediate this, the site expanded its system for recording hours worked by using electronic tags already used for L’Oréal site employees to include external workers;
  6. Wages and charges: an audit was unable to verify the compliance of salaries paid to employees as owed in the absence of a record of the hours worked by the three employees of a temporary work company cited in (v); moving forwards, conformity verifications will be made possible by the aforementioned expansion of the tag system to include external workers. This audit also flagged that five employees from external companies did not have national social insurance because their respective employers had not organised the required medical visits prior to hiring them; upon receipt of the audit report, the site required the external companies concerned to resolve individual non compliant situations within three months and to allow the site to systematically check compliance with their requirements in this matter;
  7. Sexual harassment and bullying: the audits revealed no non conformity;
  8. Disciplinary practices: the audits revealed no non conformity; and
  9. Subcontracting: the audits revealed no non conformity.
Monitoring and control system in respect of Health, Safety and the Environment

In 2023, 119 “Top managers” (managers of factories or distribution centres, Management Committee members etc.) attended the Leadership & Safety Culture seminar, held at the CEDEP, The European Centre for Executive Development, at the INSEAD campus in France. The seminar aims to raise awareness with top managers about safety issues, increase their leadership ability and see these behaviours adopted and maintained over the long term.

35 factories are certified ISO 45001, representing 95% of the Group’s factories.

In 2023, the following EHS audits were conducted:

  • 22 risk audits;
  • 8 combined EHS culture and risk audits;
  • 8 combined Quality, Environment, Health, Safety and Performance audits and 1 combined Quality, Environment, Health and Safety audit; and
  • 49 additional EHS audits of subcontracting sites in factories, and 18 in external distribution centres.

The most frequently identified risks during EHS risk audits are related to fire protection, procedure safety, hazardous energy, containment of fire water runoff and wastewater management. The cases of non conformity and formal notice were systematically subject to corrective actions.

In 2023, regulatory non conformities were found at nine factories with regard to the quality of their wastewater. Two factories were fined a total of $1,500 for these non- conformities. In addition, two factories received neigh bourhood complaints that did not result in a fine.

3.4.7.3. Results of the application of the Plan to Suppliers
Adoption of the Applicable Rules by Suppliers

100% of strategic Suppliers in the direct purchases category and 94.4% of strategic Suppliers in the indirect purchases category have made a contractual commitment to comply with the Applicable Rules.

All purchasers know the Applicable Rules and know which people to contact in the event of doubts.

In 2023, 143 newly recruited purchasers in the Group completed an in depth learning programme on responsible purchases.