2023 universal registration document

At the end of 2023, the Group had reached 90% renewable energy ⁽²⁾On the Group’s operated sites, excluding safety and security installations as defined in paragraph 4.5.1.3. “Environmental data”. for its operated sites (see subparagraph 4.3.1.1.3) and five plants were “Waterloop” factories: all the water required for utilities (equipment cleaning, steam production etc.) is of recycled origin and reused on site (see subparagraph 4.3.1.1.4).

L’Oréal’s commitment for over 25 years to environmental leadership has been recognised since 2016 with the best possible rating by CDP⁽³⁾CDP is an independent NGO which offers a global system for the measurement and publication of environmental information and which assesses the strategy, close involvement and results obtained by companies in the fight against climate change, sustainable water management and forest protection.: a triple “A”. L’Oréal is thus the only company in the world, out of more than 21,000 companies assessed, to receive a triple “A” ranking for the eighth consecutive year, for its commitment and results in the three key areas: addressing climate change, protecting forests and ensuring water security.

A responsible, omnichannel supply chain strategy

The Group’s Supply Chain Department organises and optimises the delivery of every one of the over 7 billion L’Oréal products to all customers, as well as directly to consumers. It is responsible for making sure that the products are delivered under optimum conditions, at the right time and at the best cost. The Supply Chain Department and its distribution centres were particularly strategic and responsive in 2023 in order to support L’Oréal’s growth in an extremely volatile market

L’Oréal’s unique features in a global market are its diverse range of distribution channels and its portfolio of many different cosmetic beauty products categories. L’Oréal continuously optimises all information flows and physical flows from suppliers to customers.

The goal is to increase responsiveness to handle market variations on all distribution channels and to adapt to market expectations in real time. Digitalisation of the supply chain and data management are critical challenges, and represent a real opportunity, especially in the retail sector and in stores managed directly by L’Oréal. It can provide a comprehensive view of business in a store, as well as improve understanding of the consumer purchase journey.

The supply chain network composed of over 150 distribution centres is a strategic lever to ensure agile coverage of market challenges and expand our service offer. To create a more responsive supply chain, L’Oréal is investing in its distribution centres to gradually transform its fulfilment centres⁽⁴⁾Distribution centres specially adapted for e-commerce distribution, where packages sent directly to consumers are prepared. : powered by automation and data, they manage a range of services to consumers such as personalisation, box preparation and tailor‑made delivery. They facilitate inventory interoperability for omnichannel management and allow enhanced product traceability. In Suzhou in China, for example, L’Oréal began constructing a fulfilment centre to enhance its offering of personalised beauty services and experiences.

In order to reduce its environmental footprint, L’Oréal is co‑creating with carriers low-carbon multimodal solutions adapted to the specific features of each geographic zone (green delivery, reduced air freight, hydrogen engines etc.).

In 2023, the Group inaugurated the new Vennecy distribution centre in France for Consumer Products. Exemplary in terms of environmental performance (enhanced insulation, optimised mix of natural/LED lighting, passive air conditioning, roof-top photovoltaic power system and biomass-boilers), this centre uses data and automation to optimise flows and accentuate its ability to adapt to the markets.

Global economic performance at the service of the brands and the commercial entities

In a climate of short and long-terms global tension, the Operations Division plays a key economic role for all brands and markets, which has an impact on the overall cost of products and their distribution.

Economic optimisation efforts led by Operations involve tracking the total landed cost, i.e. the final full cost of a product, which includes the cost of packaging and raw materials, the value added by the plants and all supply chain costs.