The financial and technical information used for this analysis has been the subject of additional reporting and of joint analysis and checking by the local and central teams for the 2023 financial year.
Process for identifying and assessing eligible investments for 2023:
The vast majority of the Group’s eligible investments (94%) correspond to data relating to leases that have been capitalised in accordance with IFRS 16. The Group’s other eligible investments (6%) correspond to other activities, as described in the regulation tables. Solar panels are generally owned by the providers and rarely the subject of investments by the Group. They are therefore not included in the eligibility analysis for CapEx. Eligible investments include leases that have been capitalised in accordance with IFRS 16, which relate to Aēsop, a company that entered the Group’s scope of consolidation at the beginning of September 2023.
For individually identified and reported CapEx, the Financial Directors of each Zone have identified significant eligible projects. The Group’s financial tools are not, to date, capable of tracking investments according to the nomenclature of the activities that are eligible under the Taxonomy. The analysis was conducted using a threshold of work, so as to focus the analysis on the most significant projects linked to real investment amounts committed.
Individually identified CapEx of the Operations Department was subject to self-assessment by the Finance and Operations Departments. The Group’s financial tools are not, to date, capable of tracking investments according to the nomenclature of the activities that are eligible under the Taxonomy. The projects were identified on the basis of the climate monitoring of the L’Oréal for the Future programme, using a threshold of work, so as to focus the analysis on the most significant projects.
CapEx linked to the circular economy objective have been deemed not significant with the aid of interviews with subject experts, projects identified on the basis of the monitoring of the L’Oréal for the Future programme and by management control tools used by the Operations Finance Department.
Group consolidated OpEx with the Taxonomy Regulation denominator are defined as the set of expenses included in operational profit.
Checks are conducted centrally to ensure each project is eligible and to ensure that the same project is not counted twice when assessing Taxonomy indicators.
Process for qualifying aligned investments for 2023:
The alignment of capitalised leases under IFRS 16 relating to Aēsop has not been tested in view of the entity’s recent integration.
In accordance with the instructions of the Delegated Acts, an investment is qualified as “aligned” to the Taxonomy, if it meets the three criteria below.
The alignment criteria for construction and renovation projects undertaken by the Group are analysed solely in the year of final delivery in order to be able to assess the energy performance of the project with greater certainty.
In terms of the climate change mitigation objective:
In terms of the acquisition of buildings constructed before 31 December 2020 for which experts appointed by the Group do not have the buildings’ EPC(1) Energy Performance Certificate (EPC)or are not aware of the threshold relating to the top 15% of the best performing buildings in terms of primary energy consumption at national or regional level, the labels for which energy performance is a certification criterion and for which the maximum level of certification has been reached, the buildings in question have been considered, in the context of this transition exercise, as making a substantial contribution to climate change mitigation with regard to the Taxonomy. The buildings are then considered highly likely to be among the best performing buildings in the country and the label should place the building in the top 15% of the country or region. If the label’s best score is not achieved, a case-by-case analysis is conducted.
In terms of the acquisition of buildings constructed after 2020 and for which experts appointed by the Group do not have the buildings’ EPC, buildings with labels for which energy performance is a certification criterion and for which the maximum level of certification has been reached, have been considered, in the context of this transition exercise, as making a substantial contribution to climate change mitigation with regard to the Taxonomy. The experts also ensure that the other technical criteria set out in the Delegated Acts for building acquisitions are met in order to qualify the alignment with the Taxonomy.
Where renovation or repairs that improve energy efficiency or equipment for renewable energy are concerned, the Group ensures that the work complies strictly with the respective criteria laid down in the Delegated Acts for each activity.
(1) Energy Performance Certificate (EPC)
