The CSR strategy and action plans of the suppliers are fully integrated into their relationship with L’Oréal. They are also discussed during strategic meetings(1)Annual review of the supplier’s business activity, its performance over the past year and its objectives for the following year.. The evaluation of suppliers on the CSR standard is based, in particular, on their social audit compliance, the implementation of the Inclusive Sourcing programme, their results in the “CDP Supply Chain” programmes for the reduction of CO2 emissions and their EcoVadis assessment.
The suppliers evaluated represent more than 83% of total direct purchases(2)Direct purchases comprise Packaging, Raw materials, Subcontracting and Electronic Devices. and 21% of indirect purchases(3)Indirect purchases comprise Marketing, Media & CMI, Beauty Tech & IT Digital, Retail & Promotion, Business Services, Logistics, Industrials & Supply, Properties – Rents and Scientific Services..
Suppliers can train by self-study via a website made available to them by the Group. These learning courses aim to optimise their sustainability policies. Videos, articles and presentations are available, covering a variety of topics, such as decarbonisation, the living wage, social audits etc. This content is currently available to all the Group’s strategic suppliers.
Since 2002, the Group’s suppliers have had to sign the Mutual Ethical Commitment Letter. This document, reviewed in 2021, sets out the requirements and commitments that L’Oréal imposes on its suppliers according to the Group’s programmes and policies concerning ethics, corporate responsibility, human rights, working conditions and compliance. The “Mutual Ethical Commitment Letter” has been rolled out gradually to all suppliers worldwide (see section 3.4).
The Group’s subcontractors and its suppliers of raw materials, packaging, production equipment and POS/ promotional advertising items located in countries identified as being at risk according to Verisk Maplecroft are subject to a mandatory social audit (and prior to any inclusion on the supplier panel). These audits, performed by independent service providers, aim in particular to:
The Group finances the initial audits as well as the re-audits that take place three years later. The follow-up audits to verify the effectiveness of the corrective actions are paid for by the suppliers.
Ten areas are audited: child labour; forced labour; the environment, health and safety; compliance with the laws relating to trade unions; non-discrimination; disciplinary practices; harassment or a hostile work environment; due payment of remuneration and benefits; working time; and relations with subcontractors.
L’Oréal’s social audit is mainly based on the internationally recognised SA 8000 standard. However, the Group has also imposed more stringent criteria, particularly in terms of the minimum age for employment. This is set at 16 years of age for all employees of suppliers, a higher age limit than that required by the International Labour Organisation (ILO) for non-hazardous work.
A tool for social audits is used to plan the audits with the external service provider’s system and to manage the results and action plans for all suppliers concerned. An online learning programme that supplements the Sourcing Discovery learning module is available to all purchasers. This explains to every new purchaser the importance of the social audit programme and how purchasers must make it part of their daily process. The Group’s purchasers accordingly promote the continuous improvement of their suppliers in line with the Group’s standards.
Since 2020, 3,212 supplier sites have been audited according to the L’Oréal standard (see paragraph 3.4.7.3):
In 2014, L’Oréal launched a programme for assessing strategic suppliers(5)Strategic suppliers are those whose added value is significant for the Group and who, through their weight, their innovations, their strategic alignment and their geographical deployment, provide long-term support for L’Oréal’s strategy. and their sustainability policy. The EcoVadis assessment is helping to refine the analysis of suppliers’ performance and identify areas for improvement in terms of human rights protection, business ethics, environmental preservation and diversity, equity and inclusion.
In 2023, 965 suppliers were subjected to an EcoVadis assessment of their social, environmental and ethical policies, as well as the implementation of those policies by their own suppliers. 301 of them, representing 95% of the Group’s strategic suppliers(6)Direct and indirect., obtained an average score of 63/100.
