The systems are reviewed each year, taking into account the Statutory Auditors’ recommendations and monitoring objectives for subsequent years (updating the indicators to be monitored; improving their definition; and enhancing the communication, monitoring and control process).
In rare cases, certain data already published for the preceding year may be modified when inaccuracies or errors are discovered after the end of the financial year. These data are monitored and included in the annual consistency review, before being included in the reported figures.
Scope of consolidation: environmental indicators cover 95% of the factories and distribution centres, as well as administrative sites and research centres with more than 50 people due to the acquisition of Aēsop. 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 2023, 167 sites participated in the reporting and 164 were still consolidated at the end of the year, including 37 factories, 43 distribution centres, eight research centres and 77 administrative sites. If some sites are unable to obtain certain information (e.g. water withdrawal, waste generation etc.) they may temporarily use estimates, which must be validated by the Operations Department. In addition, 100% of these operated sites provided information on energy consumption and CO2 emissions, 100% of the operated sites reported their water consumption and 100% of the operated 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. It should be noted that the number of sites varies little from one year to the next.
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.
Operated sites: the Group’s operated sites are all its sites, irrespective of their purpose, with the exception of sites normally accommodating fewer than 50 employees.
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 for operated sites are related to natural gas, for which consumption data is 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 French Agency for the Environment and Energy Management (Agence de l’Environnement et de la Maîtrise de l’Énergie – ADEME) Base Carbone database for fossil fuels, such as natural gas, fuel oil etc. and the 6th report of the IPCC (IPCC AR6) for cooling gas. All data are incorporated into the internal reporting software on a monthly basis.
Scope 2: the main emissions for operated sites are related to electricity, for which consumption data is 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 of operated sites, thelevel 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.
