sbwa progress report 2015.doc

8/17/2019 Sbwa Progress Report 2015.Doc

1/28

THE L’ORÉAL SUSTAINABILITY COMMITMENT

2015PROGRESSREPORT


2/28

FIND OUT MORE ON THE WEBLearn about L’Oréal’s sustainabledevelopment strategy, commitmentsand initiatives in greater detail atwww.sharingbeautywithall.com

DISCOVER THE MOBILE VERSION

OF THE SITE

The PDF version of this document complies with ISO 14289-1 standards on online content

accessibility; it has been adapted for visually impaired users and people with motor disabilities.

http://www.sharingbeautywithall.com/http://www.e-accessibility.info/en/homehttp://www.sharingbeautywithall.com/


3/28

3

26 STAKEHOLDERS DIALOGUE

27 REPORTING: PROVEN PERFORMANCE

Contents 04 FROM JEAN-PAUL AGON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER06 CARBON-BALANCED AMBITION: TOWARDS A LOW-CARBON BUSINESS MODEL

08 2020 COMMITMENTS, 2015 RESULTS

InnovatingSUSTAINABLY

11 REDUCING THE ENVIRONMENTAL FOOTPRINT OF FORMULAS

12 RESPECTING BIODIVERSITY

13 OPTIMISING PACKAGING

14 ACHIEVING ZERO DEFORESTATION

Living SUSTAINABLY

20 ASSESSING THE FOOTPRINT OF PRODUCTS

21 RAISING CONSUMER AWARENESS ABOUT LIVING SUSTAINABLY

ProducingSUSTAINABLY

16 REDUCING CO2 EMISSIONS

17 REDUCING WATER CONSUMPTION

18 REDUCING WASTE

Developing SUSTAINABLY

23 PROMOTING ACCESS TO EMPLOYMENT AND SOCIAL INCLUSION

24 JOINING FORCES WITH SUPPLIERS TO MEET THE GROUP’S COMMITMENTS

25 UNIVERSALISING L’ORÉAL’S SOCIAL MODEL

1015

19

22


4/28

4

We aredeterminedto drivechange. Jean-Paul AgonChairman and Chief Executive Officer

E D I T O R I A L

It has now been two yearssince we introduced theSharing Beauty With All

programme to set out our2020 targets, in line withour long-standing traditionof responsibility. An ambitiousprogramme to ensure ourGroup continues to havea positive impact on societyand the environment.

We have made real progresssince then, at times even moreswiftly than expected. Oneexample is our goal of reducingCO2 emissions from our plantsand distribution centresby 60%: by 2015, a reductionof 56% had already beenachieved, despite a productionincrease of 26%. We havecontinued to dissociate ourgrowth from our environmentalimpact, proving that economic

performance is clearlycompatible with a commitmentto protecting the climate.

Despite these advances,we have not lost sight of thefact that there are still a numberof challenges to overcome.One such task is sustainableinnovation in packaging,which we aim to step up.Another is responsibleconsumption: encouraging

consumers to adopt moresustainable practices is achallenge as vital as it iscomplex, requiring a realparadigm shift. It representsa cultural revolution formarketing teams, who mustnow incorporate social andenvironmental criteria alongsidethose governing product designand launch.


5/28

2015 PROGRESS REPORT

5

Watch Jean-Paul Agon’s video: www.sharingbeauty.com/vision

As we pursue this programme,we can clearly see how thesesocial and environmentalcommitments also provideour laboratories and plantswith a source of creativity,innovation and performance.They encourage us to push theboundaries of technology andexpertise. They urge us to beinventive.

Our progress proves that weare capable of doing moreand raising the bar even higher.In the fight against climatechange, 2015 was a milestoneyear, marked by the signingof a historic agreement atthe COP 21. Just before theconference, L’Oréal madea commitment to become acarbon-balanced companyby 2020 by capturing as manyemissions as we produce. This

new ambition reflects our desireto develop an innovative low-carbon business model andto do our utmost to support thecollective campaign to reduceglobal warming.

As expected, implementingthis programme has requireda great deal of effort andenergy. Everyone has tackledthe challenge head on.In 2015, I also decided to have

the Sustainable DevelopmentDepartment report directly tome, since our commitment iscross-functional and strategicfor all L’Oréal functions, brands,divisions and countries.

In this respect, Sharing BeautyWith All is an incredibly unifyingprogramme. It symbolisesthe cooperative, collective

We have continuedto dissociate our growth from ourenvironmental impact.

spirit that is so indicative ofthe 21st century and so vital

in overcoming the immensechallenges of our time.And because sustainabledevelopment affects us all,we also plan, as of 2016, tointegrate performance targetsrelated to the programme intothe bonus systems for all L’Oréalexecutives. This will allow theirindividual contributions to beacknowledged and will makethe success of the programmea new key performance

indicator.

There can no longer be anydoubt: companies haveto change. They can nolonger see their success andlong-term outlook in terms ofeconomic performance alone.Sustainability has become thenew norm, the new licenceto do business and eventhe key to survival. It also givescompanies an outstanding

opportunity to foster innovation,value creation, and loyalty,both internally and externally.

For over a decade, we havesupported and implementedthe Principles of the UnitedNations Global Compact—a commitment we reiteratedin 2015. L’Oréal is increasinglyrecognised for its sustainability

achievements around theworld. The Group has received

recognition from NGOs like theCDP (former Carbon DisclosureProject) for its efforts in fightingclimate change. It has beenpraised by institutions such as theInternational Labour Organization(ILO) for its work in protectingemployees through the L’OréalShare & Care programme andits commitment to disability.It has also been acknowledgedby external bodies such asEthisphere, which has named

L’Oréal “one of the world’s mostethical companies” for the sixthyear in a row.Our sustainability policy isbased on the L’Oréal Codeof Ethics and our strong ethicalprinciples: respect, courageand transparency. We striveto implement initiatives in linewith the latest United NationsSustainable Development Goals.

These various acknowledgements

are a real source of pridefor everyone at the company.They have spurred us to stepup our efforts even further.Working alongside governments,institutions and other companies,hand in hand with citizens, weare more determined than everbefore to be agents for changeand to make a real difference.

http://www.sharingbeauty.com/visionhttp://www.sharingbeauty.com/vision


6/28

6

LOréal will balance itsCO2 emissions by 2020

and shape an innovativelow-carbon businessmodel through its newcarbon-balanced initiative,announced by Jean-PaulAgon three months beforeCOP21.

In late 2014, L’Oréal reacheda key milestone in its drive topursue a complete transformationtowards a low-carbon businessmodel: the Group successfully

reduced CO2 emissions fromits industrial activities by 50%

in absolute terms, from a 2005baseline, while increasingproduction by 22% over the sameperiod. One year later, L’Oréalconfirmed this positive trend:by the end of 2015, it hadreduced its emissions by 56% andincreased production by 26% overa 10-year period. This is incrediblysymbolic.The Group has proven that it ispossible to dissociate carbonemissions from economic growth.

A twofold approachGiven the pressing need to address

climate change, and against thebackdrop of the 21st United NationsConference of the Parties (COP21)held in France in December 2015,Jean-Paul Agon, L’Oréal Chairmanand Chief Executive Officer, choseto take things a step further.On September 3rd, he announcedthe Group would completelybalance its CO2 emissions fromproduction by 2020 to becomea carbon-balanced company. Thisnew ambition strengthens. L’Oréal’s

Carbon-balanced ambition:towards a low-carbonbusiness model

Find out more about the carbon balanced ambition at: www.sharingbeauty.com/carbon-balanced

http://www.sharingbeauty.com/carbon-balancedhttp://www.sharingbeauty.com/carbon-balanced


7/28


7

low carbon strategy. The Groupnow pursues a twofold approach

to reducing its carbon footprint:

1. Reducing emissions linkedto its industrial activities by 60%by 2020, from a 2005 baseline,through the increasing useof renewable energy andimprovements in the energyefficiency of its industrial sites(see page 16);

2. Counterbalancing by 2020the rest of its emissions by

Projects are now beingrolled out. Initial resultswill be available for 2016.

TONNES OF GENERATEDCARBON GAINS

MONITORING INDICATOR UP TO 2020

generating carbon gains throughthe sustainable sourcing of rawmaterials in partnership withits suppliers. With this newambition, L’Oréal aims to balanceits incompressible CO2

emissions(around 400,000 tonnes per year).

This innovative approach willbe rolled out through a rangeof projects with three focalpoints, in line with the methodsdeveloped by internationalstandards and the Kyoto Protocol:

• improving energy efficiency;• promoting productive, low-carbon agricultural practices;• developing forest-managementprojects.

To ensure its approach is effective,L’Oréal has put together an

expert committee of independentcarbon specialists chaired byChristian de Perthuis, Professorat Paris Dauphine University andfounder of the Climate EconomicsChair.

BURKINA FASO

IMPROVING ENERGY EFFICIENCYAND FIGHTING DEFORESTATION

In Burkina Faso, 30,000 women harvestthe nuts used to produce shea butter.

In 2015, L’Oréal partnered with its supplierOlvéa on a project to install better stovesto reducing the amount of wood usedto boil the nuts. This initiative will soonbe followed with a campaign to fightdeforestation. The project will help toreduce the carbon footprint of sheabutter production and result in savingsfor producers.

INDONESIA

SUSTAINABLE AGRICULTURALPRACTICES

L’Oréal uses patchouli in its fragrances.On the Indonesian island of Sumatra,the Group has partnered with its supplierFirmenich to develop an unprecedented,certified sustainable co-cropping model forgrowing patchouli and cinnamon plantstogether. The aim is to optimise the useof agricultural land and provide the300 producers involved with an additionalsource of regular income. The initiative alsohelps to avoid the extension of farmland,thereby limiting deforestation.


8/28

8

Innovating sustainably2020 TARGETS 2015 RESULTS

2014RESULTS

100% of L’Oréal products will have a positiveenvironmental or social impact.

Every time a product is created or updated, the Groupwill improve its environmental or social profile againstat least one of the following four criteria:

74% of new or renovated products have an improvedenvironmental or social profile.

These indicators reflect marketed products that are new or renovated in terms offormula or packaging and made for the first time in 2015. The calculation is basedon a scope, which, at the end of 2015, corresponds to 85% of volumes producedby the Group and which includes all product categories, excluding rangeextensions.

67%

• the new formula reduces the environmentalfootprint, particularly with regard to water use;

22% of new or renovated products have an improvedenvironmental profile thanks to a new formula that reduces theirenvironmental footprint.

• the new formula uses renewable raw materialsthat are sustainably sourced or derived from greenchemistry;

22% of new or renovated products have an improved environmentalprofile thanks to a new formula that uses renewable raw materials thatare sustainably sourced or derived from green chemistry.

• the new product has a positive social impact; 14% of new or renovated products have an improved social profilebecause they incorporate raw materials from Solidarity Sourcingprogrammes.

• the new packaging has an improved

environmental profile.

43% of new or renovated products have an improved environmental

profile, thanks to a reduction in the environmental footprintof packaging

Producing sustainably2020 TARGETS 2015 RESULTS

2014RESULTS

L’Oréal will have reduced CO2 emissions from plantsand distribution centres by 60% in absolute terms,from a 2005 baseline.

56% reduction in CO2 emissions from plants and distribution

centres since 2005.The percentage reduction is calculated in absolute terms for scopes 1 and 2in line with the GHG Protocol standard.

- 50.2%

L’Oréal will have reduced a 20% reduction in CO2 emissionsfrom the transportation of products (in grams of CO2 persales unit per km), from a 2011 baseline.

289,244 tonnes of CO2 resulting from the transportation ofproducts in 2015, representing 0.021 grams of CO2 per sales unit per km.Emissions are stated in absolute terms for 2015. Comparison with a 2011 baseline

is pending. This calculation is based on Group scope excluding The Body Shop,Nyx Professional Makeup and Niely.

Indicator notavailable for 2014.

L’Oréal will have reduced water consumption by 60%per unit of finished product, from a 2005 baseline. 45% reduction in water consumption in plants and distributioncentres since 2005 (calculated in litre/finished product). - 36%

L’Oréal will have reduced waste generation by 60%per unit of finished product, from a 2005 baseline. 31% reduction in waste from plants and distributioncentres since 2005 (in grams/finished product).

Excluding returnable packaging rotation with returnable packagingaccounted for at source.

- 23.1%

L’Oréal will send zero waste to landfill.Only2,2% of industrial wastesent to landfill in 2015 (from plants anddistribution centres).

0 waste sent to landfill, plants met their goal in December 2015.The percentage of waste sent to landfill is calculated for the given year — exclusiveof local regulatory limitations — by dividing the amount of waste sent to landfill(2,891 tonnes) by the amount of transportable waste, excluding reusable packaging(90,066 tonnes) and reusable packaging rotation (41,878 tonnes).

3.8%

2020 commitments, 2015 resultsEvery year since the launch of the Sharing Beauty with All programme in 2013, L’Oréal haspublished its progress towards meeting the targets set for 2020. The following dashboardshows the Group’s sustainability progress in each of the four key areas of the programme,based on strategic indicators, including those reviewed by L’Oréal’s statutory auditors.

Corporate, social, environmental, health & safety data verified by Deloitte & Associésand PricewaterhouseCoopers Audit are indicated throughout this report by symbolsindicating the level of audit assurance: (moderate) and (reasonable). Please refer tothe methodological note and assurance report published in the Publications available at:www.sharingbeauty.com/resources.

http://www.sharingbeauty.com/resourceshttp://www.sharingbeauty.com/resourceshttp://www.sharingbeauty.com/resources


9/28

9

Living sustainably2020 TARGETS 2015 RESULTS

2014RESULTS

L’Oréal will use a product assessment tool to evaluate theenvironmental and social profile of all products. All brandswill make this information available to allow consumers tomake sustainable choices.

Tool development is nearing completion. These two indicators will beavailable in 2017. Indicator not

available for2014.

All brands will assess their environmental and socialimpact and make commitments to improve their footprint. 66.6% of brands have evaluated their environmental or socialimpact.* 22%

Every brand will report on its progress and raise consumerawareness of its commitments. 34.4% of brands conducted a consumer awareness initiative.* 25.4%

Consumers will be able to influence L’Oréal’s sustainabilityactions through a consumer advisory committee.

Indicator not available for 2015. The consumer advisory committee willbe introduced in 2016.

Indicator notavailable for

2014.

Developing sustainably…2020 TARGETS 2015 RESULTS

2014RESULTS

... with communities

By 2020, L’Oréal will enable more than 100,000 people fromunderprivileged communities to access work through thefollowing programmes:

More than 60,600 people from underprivileged communitieswere provided access to work.

More than 54,000

• Solidarity Sourcing; 57,200 people accessed work through the SolidaritySourcing programme, including 22,400 through The Body Shop’sCommunity Trade initiative.

52,000including 25,000

via Community FairTrade

• vocational training in the beauty sector; 2,700 people in very difficult social or economic situationreceived free vocational training in the beauty sector as partof the Beauty for a Better Life programme, supported by theL’Oréal Foundation.

1,400

• employment of disabled people. 773 people with disabilities work for L’Oréal.This figure only includes those employees wishing to self-declare as havinga disability.

815

... with suppliersAll strategic** suppliers will be evaluated and selectedbased on their environmental and social (CSR)performance.

51% of the Group’s strategic suppliers have been evaluatedand selected based on their CSR performance.They represent more than 70% of total direct purchases (raw materials, packagingand contract manufacturing).

43%

All strategic suppliers will have completed a self-assessment of their sustainability policy with L’Oréal’ssupport.

74% of strategic suppliers have completed a self-assessment oftheir sustainability policy with L’Oréal’s support.The percentage is based on the calculation of the number of suppliers who wereassessed on their environmental, social and ethical policies in 2015, includingassessments of their suppliers by Ecovadis.

50%

All suppliers will have access to L’Oréal training toolsto improve their sustainability policies.

Indicator

not available

for 2015.

Indicator notavailable for

2014.

20% of strategic suppliers will be associated with theSolidarity Sourcing programme. 4% of strategic suppliers are involved in the Solidarity Sourcingprogramme. 4%

… with employeesL’Oréal will provide healthcare coverage for employeesreflecting best practices in their country of residence. 86.6% of the Group’s permanent employees have healthcarecoverage that reflects best practices in their country of residence***. 85.3%

L’Oréal will provide financial protection for all employeesin the event of non-work-related accidents. 78.4% of the Group’s permanent employees benefit fromfinancial protection in the event of a non-work-related accident leading

to personal injury, including death or permanent disability***.70.1%

Every L’Oréal employee worldwide will have accessto at least one training session per year. 72.6% of the Group’s employees attended at least onetraining session in 2015****. 81.7%


* This percentage is calculated based on their contribution to the Group’s consolidated sales in 2014. ** Strategic suppliers are suppliers whose added value is significant in terms of their long-termcontribution to L’Oréal’s strategy through their influence, innovations, strategic alignment and geographic deployment. *** This indicator is calculated according to the Group’s overall scope(Cosmetics and The Body Shop), representing 100% of employees for the scope of the L’Oréal Share & Care programme. **** This indicator is calculated according to the Group’s overall scope(Cosmetics and The Body Shop).


10/28

By 2020, 100% of L’Oréal products will have a positiveenvironmental or social profile. The Group seeks to innovatesustainably through various initiatives that include reducing

the environmental footprint of formulas, respecting biodiversitythrough a sustainable sourcing policy for raw materials,

committing to zero deforestation and usingeco-designed packaging.

Reducing the environmental footprint of formulas11

Respecting biodiversity12

Optimising packaging13

Achieving zero deforestation 14

INNOVATINGSUSTAINABLY


11/28


11

Find out more at www.sharingbeauty.com/formulas-footprint

By 2020, 100% of L’Oréal products willhave a positive environmental or socialprofile. The Group’s researchers have anumber of levers that they can use to helpthem achieve this goal, including improvingthe environmental profile of formulas.

Measuring and improving theenvironmental impact of formulasTo reduce the environmental footprint of productsand preserve biodiversity, L’Oréal Research &Innovation teams seek to improve the environmental

profile of formulas by focusing on two key areas:• improving their biodegradability, i.e. their abilityto be broken down by microorganisms foundin the natural environment;• reducing their water footprint, which representsthe impact of products on the aquatic environment.

When conducting analyses, they compare theenvironmental profiles of formulas that offer exactlythe same benefits to consumers. For example,a conventional shampoo cannot be comparedwith an anti-dandruff shampoo.

The improved environmental profile of new formulasproduced in 2015 was therefore assessed against abenchmark of average values for formulas marketed

in 2013 offering the same cosmetic benefits. Theformula being replaced was used as a benchmarkfor products renovated in 2015.

More than 40,000 formulas analysedTo determine product categories based on thebenefits offered to consumers, all 19 types ofproduct made by the Group were analysed:shampoos, conditioners, shower gels, skincareproducts, cleansers, hair colouring, styling products,perms, deodorants, suncare products, make-up and fragrances. More than 40,000 formulaswere screened in 2014 and 2015, leading to the

definition of 143 product categories. For each ofthese 143 categories, a baseline was determined,corresponding to the weighted average of 2013 salesvolume (or 2014 if the product type was not availablein 2013) for the two indicators (biodegradability andwater footprint).

By the end of 2015, all values for these two indicatorswere made available to L’Oréal formula developers,with an eco-design tool developed to ensure thatall new formulas deliver an improved environmentalprofile while offering the same benefits to the

consumer.New launches in 2015 include products fromdifferent L’Oréal Group brands that offer a level ofbiodegradability of between 97% and 99%, includingArmani Men Master Cleanser, Ushuaïa Hibiscus Biodeodorant, Garnier Ultra Doux Mythical Olive bodylotion, Kérastase Fusio-Dose Booster Discipline,The Body Shop Cranberry Body Scrub, SanofloreNuit des Reines, and Vichy After-Sun Shower Oil.

Reducing the environmentalfootprint of formulas

CHINA

ENHANCED PERFORMANCE

AND REDUCED ENVIRONMENTALIMPACT

In 2015, L’Oréal Paris launchedtwo silicone-free anti-dandruffshampoos in China: AD SH-ExtraFresh and AD SH-Extra Moist.Their special formula provides

a pioneering breakthrough by offering outstandingperformance while achieving a water-footprint reductionof more than 80% compared with the average for othershampoos in the same category.

74%of new or renovated products havean improved environmental or socialprofile in 2015*.

22%of new or renovated products havean improved environmental profile thanksto a new formula that reduces the environmentalfootprint.

PRODUCTIMPROVEMENTS

ENVIRONMENTAL FOOTPRINTOF FORMULAS

MONITORING INDICATORS UP TO 2020

* These indicators reflect marketed products that are new or renovated in terms of formula or packaging and made for the first time in 2015. The calculationis based on a scope, which, at the end of 2015, corresponds to 85% of volumes produced by the Group and which includes all product categories, excludingrange extensions.

http://www.sharingbeauty.com/formulas-footprinthttp://www.sharingbeauty.com/formulas-footprint


12/28

12

Find out more at www.sharingbeauty.com/biodiversity

By 2020, 100% of L’Oréal products will havea positive environmental or social profile.The Group therefore favours the use ofrenewable raw materials that are sustainablysourced or derived from green chemistry torespect biodiversity.

Sourcing renewable raw materialsMore than 50% of raw materials used by L’Oréal arerenewable. This represents around 1,400 ingredientsfrom nearly 300 plant species sourced in over80 countries.

Sustainable sourcing L’Oréal has developed a sustainable sourcing policyfor renewable raw materials based on four principles:1. Ensuring the traceability of raw materials, whichmeans knowing the plant’s source and the countryin which it is grown;2. Ensuring that all stakeholders comply with socialand environmental regulations;3. Checking that the supply of these raw materialsrespects biodiversity and addresses sustainabilityissues in relevant areas, which includes producinga positive social impact on the lives of local people;4. Having the entire approach verified by anindependent third party.

In 2015, L’Oréal finalised the implementation oftraceability campaigns for all suppliers, even thoughthe significant number of steps involved in processingsome materials can make supply chains highlycomplex and require a whole series of intermediaries.100% of plant-sourced ingredients are currentlytracked from their country of origin, or even the siteof biomass production.

Defining projects2015 was marked by the joint creation of action plansdesigned to improve conditions of supply for strategicingredients as part of the campaign to respect

biodiversity. Examples include the project launchedin India with more than 1,500 guar growers, the SPOTSproject in Malaysia to ensure a sustainable supply ofpalm oil and palm kernel oil derivatives (see page 14),and the agreements with communities in the Amazonforest for the production of murmuru, pracaxi andcupuaçu.

Tools for formulatorsIn late 2015, L’Oréal made the status of all renewableraw materials available to the Group’s formulatorsdesigners and created an eco-design tool. This tool

will help to promote renewable raw materials that aresustainably sourced or derived from green chemistry,encouraging formulators to use them in thedevelopment of new formulas.

RAW MATERIALS AND BIODIVERSITY

22%of new or renovated products have an improvedenvironmental profile thanks to a new formula usingrenewable raw materials that are sustainably sourcedor derived from green chemistry.

SOCIAL IMPACTOF PRODUCTS

14%of new or renovated products have animproved social profile because theyincorporate raw materials from SolidaritySourcing programmes.


Respectingbiodiversity

BOLIVIA

BIODIVERSITY AS A SOURCE

OF INNOVATION

Quinoa husk (the shell thatprotects the seed) was previouslyconsidered as waste and was

therefore not used. However,L’Oréal researchers have nowshown that the saponins and

polyphenols contained in the husk boast effectiveexfoliating properties. In 2015, the Group developeda partnership in Bolivia for the sustainable sourcingof quinoa husk, creating a new market for growersand providing long-term benefits to 250 families.L’Oréal works with its local partners to train growersin low-carbon farming practices. Renewable,biodegradable, sustainably sourced and derived fromgreen chemistry, quinoa husk is a shining exampleof L’Oréal’s sustainable innovation programme.

74%of new orrenovated productshave an improvedenvironmentalor social profilein 2015.

PRODUCTIMPROVEMENTS

http://www.sharingbeauty.com/biodiversityhttp://www.sharingbeauty.com/biodiversity


13/28


13

Find out more at www.sharingbeauty.com/packaging

43%of new or renovatedproducts have an improvedenvironmental or socialprofile thanks to packagingwith a smaller environmentalfootprint.


Optimising packaging

74%of new orrenovated productshave an improvedenvironmentalor social profilein 2015.

PRODUCTIMPROVEMENTS

PACKAGING MATERIALS CERTIFIED PAPERAND CARDBOARD

More than 4,900 tonnesof recycled materialsused in 2015.

4,200 tonnes of materialssaved since 2008 thanksto weight-reductioninitiatives.

100%of paper usedfor the instructionsincluded withproducts iscertified.

99. 8%of cardboard usedfor product boxesis certified.

By 2020, 100% of L’Oréal products will havea positive environmental or social profilewhile providing equal or greater benefitsto the consumer. Improving packaging isa key driver in achieving this goal.

Promoting more sustainable packaging Since 2007, L’Oréal has implemented a responsiblepackaging policy based on three pillars, known asthe three “Rs”: Respect, Reduce and Replace. Thesefocal points form the framework of a comprehensive

and systematic eco-design process for finished-product packaging and transport packaging usedin the manufacturing of products. This approach wasextended to Point of Sale (POS) displays in 2015.

Packaging teams also work with Group brands toanalyse the environmental profile of their packagingand identify ways to improve their ranges and products.

Respecting the environment Another L’Oréal target is to use only paper,cardboard and wood packaging that is sourcedfrom forests that are sustainably managed andpreserve biodiversity. In 2015, 100% of paper usedfor instructions and 99.8% of the cardboard usedfor boxes were certified.

In 2015, PVC represented 0.3% of plastic used bythe Group. L’Oréal aims to completely eliminatePVC from its packaging by 2016.

Reducing and optimising resourcesThe goal is to design packaging and finishedproducts that are optimised in terms of weight andvolume. Design optimisation reduced the amountof materials used by 130 tonnes in 2015, bringingthe total amount of materials saved since 2008 to4,200 tonnes. Special efforts have also been madeto reduce packaging in plants, such as removing

the cardboard boxes used to transport mascarasfrom the Yichang plant in China, which saved17 tonnes of cardboard.

Replacing materials with betteralternativesReplacing conventional materials with renewablysourced alternatives, such as recycled or biosourcedmaterials. reduces the environmental footprint ofproducts. More than 4,900 tonnes of post-consumerrecycled (PCR) materials were used instead of virginmaterials in 2015 (an increase of 20% from 2014).

The new L’Oréal Professionnel Profiber bottlelaunched in mid-2015 features 25% recycled plastic.New bottles in the Spa of the World range fromThe Body Shop now contain 30% recycled plastic(saving 144 tonnes of virgin plast ic per year).Another example: Vichy also incorporated 25%recycled glass in its 50ml jars, saving 295 tonnesof virgin glass in 2015).

BRAZIL

BIOLAGE:100% BIOPLASTIC BOTTLES

In late 2015, Matrix in Brazil

revamped Biolage, its rangeof shampoos and conditioners.These products are nowpackaged in bottles 100%made from plastic biosourcedin Brazil using a local sugarcanederivative, bio-PE, a renewableraw material that reduces thecarbon footprint of the product.This is the L’Oréal Group’s firstbioplastic bottle.

http://www.sharingbeauty.com/packaginghttp://www.sharingbeauty.com/packaging


14/28

14

Find out more at www.sharingbeauty.com/zero-deforestation

As part of its commitment to zerodeforestation, L’Oréal implements actionplans to ensure a sustainable supply of soyaoil, palm oil and wood-fibre based products(cardboard and paper for packaging) sothat none of its products is associated withdeforestation.On the specific issue of palm oil, L’Oréalpursues an innovative strategy to tracethe source of palm oil and palm kernel oilderivatives back to the mill, in partnershipwith all stakeholders: small growers, NGOs

and suppliers. L’Oréal: a responsible, innovative player L’Oréal uses fewer than 1,000 tonnes of palm oil eachyear, along with 60,000 tonnes of palm oil derivatives(from the pulp of the palm fruit) and palm kerneloil derivatives (extracted from the kernel of the samefruit). Both types of oi l are used to make glycerol,fatty acids and fatty alcohols used in products.

Continuing certification effortsL’Oréal’s entire palm oil supply has met the standardsand procedures of the Roundtable on SustainablePalm Oil (RSPO) since 2010, complying with one of itsmost exacting traceability models, the Segregated(SG) system. All palm oil derivatives used by the

Group are also certified. L’Oréal increased the shareof its Mass Balance certified purchases to 26% by theend of 2015, up from 11% in 2014 (with the remaindercovered by RSPO’s Book & Claim model).

Going one step further: tracingderivatives back to the mill As part of its commitment to zero deforestationin 2014, L’Oréal undertook to trace the main palm oiland palm kernel oil derivatives back to the mill by theend of 2015. This was a complex task, since derivativeprocessing involves a wide range of stakeholdersand has a significant impact on supply chains.

An initial review was conducted in 2014 by anindependent special ist. It involved strategic L’Oréalsuppliers, who provide more than half of all palm oiland palm kernel oil derivatives.

In 2015, to identify the origin of all palm oil and palmkernel oil derivatives, L’Oréal extended the scope ofits research to include all relevant suppliers. Resultsanalysed in 2015 have shown that Malaysia andIndonesia are the main supplier countries and that:• almost 80% of palm oil and palm kernel oilderivatives used by L’Oréal come from identified

refineries (nearly 30);• almost 50% of these supplies come from identifiedmills (nearly 600).

PALM OIL

100%of supplies of palm oil, palm oilderivatives and palm kernel oilderivatives have been certifiedsustainable as per RSPO criteriasince 2012.


Achievingzero deforestation

50%of palm oilderivatives comefrom known mills.

DERIVATIVES

MALAYSIA

SUPPORTING SMALL PALM OIL

PRODUCERS

Small independent growersrepresent around 40% of the world’spalm oil production. However,because their lack of accessto efficient agricultural practicesresults in low profits, they are

sometimes tempted to illegally increase the size of their

plantations. In Malaysia, L’Oréal has commit tedto support SPOTS (Sustainable Palm Oil & Traceability withSabah small producers), an unprecedented project in themarket for palm derivatives, which previously did not traceproduction back to the plantation. L’Oréal has committedto purchasing RSPO-certified production from 500smallholders over five years, through a partnership withNGO Wild Asia and its suppliers Clariant, Global Aminesand Wilmar, all of which are committed to the project forthe long term. The initiative gives these small growersfairer, long-term access to the international market,allowing them to improve their agricultural practices andliving conditions while preventing deforestation.

CERTIFIED PAPER AND CARDBOARD

99. 8%of cardboardused in productpackaging iscertified.

100%of paper usedfor instructionsincluded in productpackaging iscertified.

http://www.sharingbeauty.com/zero-deforestationhttp://www.sharingbeauty.com/zero-deforestation


15/28

PRODUCINGSUSTAINABLYBy 2020, L’Oréal will have reduced the

environmental footprint of its plants and distributioncentres by 60%, from a 2005 baseline. The Group’s key

criteria for industrial performance include reducingCO2 emissions in absolute terms, cutting water

consumption, reducing waste per unit of finishedproduct, and shrinking the transport footprint.

Reducing CO2 emissions16

Reducing water consumption17

Reducing waste18


16/28

16


Find out more at www.sharingbeauty.com/CO2-emissions

L’Oréal has set a goal of reducing CO2 emissions

in absolute terms at its plants and distributioncentres by 60%, from a 2005 baseline, by 2020while cutting emissions from transportationof its products by 20%, from a 2011 baseline.

Promoting low-carbon growthBy 2014, L’Oréal had already reached its initial objectivefor cutting CO2 emissions from its industrial activities(achieving a 50% reduction in absolute terms, basedon GHG Protocol methodology scopes 1 and 2), oneyear ahead of schedule. The Group is now targeting

a 60% reduction by 2020 (from a 2005 baseline).In 2015, L’Oréal also proved that a commitment totackling climate change is indeed compatible witha successful business model by achieving a 56%reduction in its emissions, in absolute terms, from a2005 baseline while increasing its production by 26%over the same period—a performance praised by CDPfor the third year running (see page 27).

Cutting energy consumptionThrough improvements in building designand insulation, along with the optimisation ofmanufacturing processes and the use of moreenergy-efficient technology, L’Oréal reduced thekWh consumption per finished product at plants anddistribution centres by 33% between 2005 and 2015.

L’Oréal continues to implement the ISO 50 001 standardcertification programme at all plants. The programmewas first introduced in 2014 and led to certification ofL’Oréal plant in Caudry (France), that same year. It isdue for completion by 2020. Four more plants werecertified in 2015: Vichy and Lassigny (France), Karlsruhe(Germany) and Pune (India).

Expanding the use of renewable energy Renewables represented 42% of energy used atL’Oréal plants and distribution centres in 2015, thanksto the implementation of major projects using varioustechnologies adapted to the geographical location

of our sites (biomethanisation, biomass, hydropowerand solar panels), and the purchase of greenelectricity. Nine Group sites reached carbon neutralityby the end of the year: they include five plants (Burgos,Spain; Libramont, Belgium; Rambouillet, France;Settimo, Italy; Yichang, China) and four distributioncentres (Victoria, Australia; Mexico City, Mexico; SouthBrunswick and Cranbury in the United States).

Reducing emissions linked to thetransportation of productsL’Oréal is aiming to reduce CO2 emissions generated

by the transportation of products from its plantsto its distributors. The goal is to decrease emissionsper sales unit by 20% between 2011 and 2020. In linewith this campaign, L’Oréal’s European ConsumerProducts Division boosted multimodal freight from 3%to 16% between 2009 and 2015, partially replacingroad transport with rail solutions. Another initiativeinvolves ensuring an extremely high load factor fordelivery vehicles, which the European ConsumerProducts Division successfully increased to morethan 95% in 2015.

ReducingCO

2 emissions

CHINA

YICHANG: A PLANT WITH

CARBON NEUTRALITYFor the past few years, the Yichangplant in China, which specialisesin make-up production, has beenpursuing innovation to improveits energy performance and cutits CO

2 emissions. This ambitious

strategy has reduced the site’s energy consumption by33% in 10 years, empowering it to achieve LEED Goldcertification. Through the use of hydropower, the leadingsource of renewable energy in the region, the Yichangplant has been 100% electric since September 2015,reaching carbon neutrality.

CO2 EMISSIONS FROM PLANTS AND DISTRIBUTION CENTRES SINCE 2005

(kilotonnes in absolute terms, based on GHG Protocol methodology, scopes 1 and 2)CO

2 EMISSIONS FROM

THE TRANSPORTATION

OF SALES UNITS*

-56%289,244 tonnes

145.5238.6 135.3 118.9 105

2005 2012 2013 2014 2015

* Emissions are stated in absolute terms for 2015. Comparison with a 2011 baseline is pending. This calculation is based on Group scope excluding The Body Shop, Nyx Professional Make-up and Niely.

http://www.sharingbeauty.com/CO2-emissionshttp://www.sharingbeauty.com/CO2-emissions


17/28


17

Find out more at www.sharingbeauty.com/water

L’Oréal has committed to a 60% reductionin water consumption per finished productby 2020, from a 2005 baseline. To achievethis, Group teams are working on two frontsto optimise water use while developingprojects to reuse and recycle water atproduction sites.

Optimising consumptionL’Oréal’s industrial projects are carefullyimplemented to ensure responsible use of water,with consumption kept to a minimum, in line with

the local availability of this vital resource.The reduction of 45% in water consumption between2005 and 2015 was reached by introducinghundreds of initiatives at all production sites.

Creating a dedicated internalmanagement tool Optimised water consumption is, internally, a keyperformance indicator for L’Oréal plants andis monitored using Waterscan, a tool speciallydeveloped by the Group. Waterscan categoriseswater consumption at each stage of the processand can identify the potential to reduce wateruse at each site.

Annual water consumption at L’Oréal plants hasdropped by 1,000,000 cubic metres as a result,representing a reduction of 30% in absolute termssince 2005. L’Oréal has saved the equivalent ofone and a half years’ water use linked to industrialactivities in the space of 10 years.

Recycling water on siteL’Oréal is developing a number of wastewater recyclingprojects. By the end of 2015, 10 facilities were in placeat sites in Karlsruhe (Germany), Rambouillet (France,see inset), Aulnay (France), Libramont (Belgium),Burgos (Spain), Settimo (Italy), Istanbul (Turkey), Pune

(India), Suzhou (China) and Montreal (Canada).The approach involves retreating the wastewaterdischarged from the water treatment facilities of theplants in order to bring it up to the Group’s qualitystandards. It is then reused by the plants to washmanufacturing tools and cooling processes.

The goal is to recycle and reuse all types of water,with the exception of the water used to makeproducts. The introduction of these installationsreflects L’Oréal’s ambition to promote waterrecycling. The Group has already begun a

campaign to achieve a neutral water footprintat its plants. Plans are now underway to implementsimilar measures at a number of other sites and toinclude them in the Group’s industrial standards.

The full range of recycling initiatives up and runningin 2015 saved L’Oréal nearly 100,000 cubic metresof water over the course of the year.


Reducing waterconsumption

WATER CONSUMPTION IN PLANTS AND DISTRIBUTION CENTRES SINCE 2005 (in litres per finished product)

-45%

0.723

2005

0.559

2012

0.530

2013

0.462 0.395

2014 2015

FRANCE

RAMBOUILLET HALVES WATERCONSUMPTION IN JUST10 YEARS

The Rambouillet plant in France,which specialises in shampoosand conditioners, is one of theGroup’s largest and has gone togreat lengths to reduce its water

demand. As a result, between 2005 and 2014, the sitehad already reduced its water consumption by 38%.In 2014, it introduced a wastewater recycling project:the new system, which came on st ream in 2015, treats anaverage of nearly 1,300 cubic metres of water every monthentirely covering the plant’s washing-water requirements.It has led to an overall reduction in water consumption of47% compared with the 2005 baseline.

http://www.sharingbeauty.com/waterhttp://www.sharingbeauty.com/water


18/28

18

Find out more at www.sharingbeauty.com/waste

L’Oréal has committed to a 60% reduction inwaste from its plants and distribution centresby 2020 and aims to send zero waste to landfillfrom any of its industrial sites by 2016 (plantsmet this target end 2015). This is an ambitiouschallenge for the Group, which defines “waste”as any solid substance that is not marketedas a finished product.

Reducing waste at the sourceIn 2015, L’Oréal reached a new milestoneby reducing industrial waste from its plants

and distribution centres by more than 30%.L’Oréal’s commitment to reduce its industrialwaste involves decreasing the use of materialsin all areas of i ts industrial activity.This approach is underpinned by a numberof wide-ranging initiatives involving the Packagingand Sourcing teams, working directly with the Group’sraw-material and packaging-component suppliersand all manufacturing teams to target three keyareas:

• reducing waste related to transport packagingthrough measures such as eco-design, weightsavings, reuse and standardisation: L’Oréal reducedthis category of waste by 13% in 2015;

• continuous improvement in manufacturingand packaging to boost the efficiency of productionprocesses and cut waste from such processes:the Libramont plant in Belgium reduced wastefrom production by 30% in 2015;

• installing on-site sludge-drying systems at plantswith in-house wastewater treatment facilities toreduce the volume of waste from sites and decreasethe environmental impact of their downstreamtransport and treatment operations.

Achieving the goal of “zeroindustrial waste to landfill” L’Oréal reached another important milestone inDecember 2015: all of its plants met the targetof sending “zero waste to landfill”. All distributioncentres are expected to achieve this objective in2016.

Recovering any remaining wasteThe L’Oréal Group aims to take things a step furtherby recovering any waste that cannot be prevented.In 2015, 93% of the Group’s industrial waste was

recovered, i.e. reused, recycled or used as an energysource. 67% of this waste was used as a material(reused or recycled).

L’Oréal seeks to promote local recoverysolutions wherever possible, both to reduce theenvironmental impact of waste management andto promote the circular economy while creatingindustrial synergies with other regional stakeholders.

Reducingwaste

FRANCE

PLANTS THAT TURN SLUDGEINTO COMPOST

The Ormes plant in Francespecialises in make-upproduction. The site introduced aninnovative project in 2015 toprocess sludge at its treatmentplant. The initiative involves

spreading the sludge onto a garden dubbed “theplanted filter”, where the plants break down the organicmatter in the waste to produce humus that can be usedas compost. Once up and running at full capacity, the1,000 sqm garden will be able to process all of thesludge from the treatment plant.

WASTE GENERATION IN PLANTSAND DISTRIBUTION CENTRES SINCE 2005(in grams per finished product; excluding returnable packagingrotation, with returnable packaging accounted at source).

-31% 93%of waste recovered.


18.123.6 18.9 18.1 16.2

20122005 2013 2014 2015

WASTE RECOVERED WASTE SENT TO LANDFILL*

Only 2.2% of industrial waste sent tolandfill in 2015 (from plantsand distribution centres).

0% of waste sent to landfillfrom plants in December 2015.

*Excluding local regulatory limitations.

http://www.sharingbeauty.com/wastehttp://www.sharingbeauty.com/waste


19/28

LIVINGSUSTAINABLYL’Oréal aims to empower its consumers to make

sustainable choices. The Group is pursuing a numberof initiatives to achieve this goal: transparently sharing

information on the environmental and social impact of itsproducts, assessing the footprint of every brand, raising

consumer awareness, and making sustainabledevelopment more desirable.

Assessing the footprint of products 20

Raising consumer awarenessabout sustainable consumption

21


20/28

20

In 2020, L’Oréal will provide consumers withinformation on the environmental and socialprofile of each of its products to help them makeinformed, sustainable consumption choices.

Product assessment toolnears completionBy 2020, 100% of L’Oréal products will have animproved environmental or social profile. A vital steptowards achieving this goal is the Group’s projectto develop a product assessment tool providingan index to evaluate social criteria alongside

environmental indicators, which began in 2014.Four brands—Biotherm, La Roche-Posay, Garnierand Redken (in the United States)—implementeda simplified version in early 2015, which gavemarketing teams greater insight into the potential foreco-design and led to the first tangible results.A second roll-out phase began in October 2015to capitalise on the experience from the pilotinitiative and build on work carried out to improvethe Product Environmental Footpr int. Teams arenow developing a more elaborate version of theassessment tool, which is easier to use and offersa wider range of functions. The system will make itpossible to simulate different designs, gauge theirenvironmental and social impact and provide moreinformation to consumers.

A robust system co-developed withstakeholdersL’Oréal consults a panel of 10 international experts,who met for the first time in December 2015. Their roleis to challenge L’Oréal’s choice of methods, criteriaand indicators to develop the most appropriatesystem possible.

An unprecedented method for calculating social impact Although there are already methods availableto measure the environmental impact of products,

no such methodology is available to gaugetheir social impact. L’Oréal is a memberof the Roundtable for Product Social Metrics,an initiative that brings together 12 internationalcompanies that have chosen to pool their effortsto tackle the issue. In 2015, L’Oréal developed anunprecedented method for calculating the socialimpact of cosmetics.

Designed to be included in in the productassessment tool, this new approach can measurethe social impact of products on employees

(covering L’Oréal, partners and suppliers),consumers and the communities with which theGroup interacts. L’Oréal has also set up a panelof seven established experts in analysing lifecyclesocial impact to support this approach and ensurethat it meets the highest standards.

% of brands that share informationwith consumers from the productassessment tool to help them makeinformed, sustainable consumptionchoices.

% of new products that are evaluatedthrough the product assessment tool.


Assessing the footprintof products

Find out more at www.sharingbeauty.com/products-footprint

CONSUMER INFORMATION EVALUATED PRODUCTS

Tool development is nearing completion; these two indicators will be available in 2017.

BIOTHERM

BIOSOURCE: MORE

SUSTAINABLE AFTER FACELIFT

In 2015, Biotherm used a pilot version

of the product assessment tool torevamp its Biosource range. Thenew bottle now boasts an optimiseddesign and a new pump to make lifeeasier for consumers, along with threemajor environmental improvements:• incorporation of 25% recycledplastic for 100 ml and 200 ml bottles;• lighter packaging components(saving 10 tonnes of plastic per year);• denser packaging of productsduring transport (saving 480 palletsa year).

Before

After

http://www.sharingbeauty.com/products-footprinthttp://www.sharingbeauty.com/products-footprint


21/28


21

Find out more at www.sharingbeauty.com/consumer-awareness

By 2020, L’Oréal will have improved theenvironmental and social impact of its newproducts and will share information withconsumers on product performance, allowingthem to make sustainable consumption choicesand helping them to adopt more sustainablepractices.

Understanding consumer expectationsSince 2013, L’Oréal has been conducting qualitativeand quantitative research to improve its understandingof the expectations of consumers and determine the

best way to engage them in tackling sustainabilitychallenges in the cosmetics industry. In 2015,a quantitative survey was conducted among12,000 women in four countries: France, the UnitedStates, Brazil and China. The findings were widelyshared within the Group and incorporated intothe vocational training plan for employees.

Continuous improvement plans for brandsAll of L’Oréal’s brands have committed to assessingtheir environmental footprints. L’Oréal laboratories workalongside packaging development and CSR teams toanalyse their range of formulas and the environmentalfootprint of their packaging in conjunction with theexecutive management of international brands.

The goal is to draw up a sustainable innovation planto identify ways of improving individual ranges andproducts and implement an action plan. In 2015,these efforts involved 66.6% of the Group’s brands.

Using brand influenceL’Oréal is well aware of its brands’ ability to galvanisetheir stakeholders—partners, clients, media figures,consumers and the general public—to take up thekey environmental and social causes of our time.The Group works diligently to ensure that each brandtargets its own cause and conducts awareness-raising campaigns. 34.4% of brands conducted an

awareness initiative in 2015. For the fifth year in arow, Armani continued to develop Acqua for Life, aninitiative implemented in partnership with Green CrossInternational, providing access to clean water to morethan 80 communities around the world. Acqua for Lifebegan its first initiative in Argentina in 2015. On WorldWater Day, March 22nd 2015, the brand launched a funnew awareness campaign involving influential bloggers,media, beauty ambassadors and fashion icons.The #1DayOn10Liters Challenge threw down the gauntletto people not exposed to water shortage to get by fora day on 10 litres of water. People in some countries use

an average of 100 litres of water in a single day, yet just10 litres is a luxury in many parts of the world.

Raising consumer awarenessabout sustainable consumption

MUSCULOSKELETAL DISORDERS

L’ORÉAL PROFESSIONNELTACKLES MSD

L’Oréal Professionnel, leaderin the professional haircaremarket, works in partnershipwith one million hairdressersaround the world. In conjunctionwith The Bone and Joint Decade,

a global alliance of doctors and researchers, the brandhas introduced an ambitious programme to prevent

musculoskeletal disorders (MSD), commonly referredto as Repetitive Strain Injuries (RSI), which represent 75%of occupational injuries suffered by hairdressers. L’OréalProfessionnel has developed tailored training programmesthat include three sets of five-minute exercises hairdresserscan use daily to prevent such problems, along withposters to encourage good practices in salons. More than65,000 hairdressers had already benefited from theseprogrammes by the end of 2015. The brand is aiming totrain all professional hairdressers with whom it works withinthree years and is targeting an estimated seven millionhairdressers worldwide with the 2016 launch of a freesmartphone app.


RAISING CONSUMER AWARENESS

34.4%of brands conducted a consumerawareness initiative.

ASSESSMENT AND REPORTING

66.6%of brands have evaluated theirenvironmental or social impact andhave pledged to reduce it and to reporton their progress.

http://www.sharingbeauty.com/consumer-awarenesshttp://www.sharingbeauty.com/consumer-awareness


22/28

DEVELOPINGSUSTAINABLY

Promoting access to employment and social inclusion 23

Joining forces with suppliers to meet the Group’s

commitments 24

Universalising L’Oréal’s social model 25

Sharing growth with its internal and external

stakeholders is a priority for L’Oréal. The Group fosters

access to work through a range of programmes,

includes suppliers in its sustainable development

commitments, and ensures that its employees around

the world benefit from the best social practices.


23/28


23

Find out more at www.sharingbeauty.com/employment-inclusion

By 2020, L’Oréal will have enabled 100,000people from underprivileged communitiesto access work. To achieve this goal, the Grouprelies on a number of inclusive businessmodels, such as providing vocational training,hiring people with disabilities and rolling outprogrammes such as Solidarity Sourcing.

Beauty for a Better Life: trainingas a catalyst for inclusionIn 2009, the L’Oréal Foundation launched thephilanthropic training programme known as Beauty

for a Better Life, which helps people in very difficult socialor economic situations to achieve social inclusion.The programme is now active in more than 20 countries.In 2015, it provided free, high-quality training in beautyprofessions to promote access to employment for 2,700people—twice as many as in 2014.

Promoting the inclusion of peoplewith disabilitiesSince 2008, L’Oréal has been working closely withlocal and international experts—including associationsand NGOs—to develop a global policy to promote theemployment of people with disabilities. In 2015, L’Oréal’sworkforce included 773 people with disabilities. Morethan half of L’Oréal’s subsidiaries organised a DisabilityAwareness Day/Week. L’Oréal received the Disability

Matters Award both in Europe and in the United Statesin 2015 for its Disability Initiatives Trophies, an internalcompetition that promotes the efforts of subsidiaries to hire people with disabilities. In November,L’Oréal was one of the first companies to sign theInternational Labor Organization’s new Global Businessand Disability Network Charter, which seeks to promotethe inclusion of people with disabilities in theworkplace. Every five years, since 2005, L’Oréalhas also published a Diversity Report to shareachievements linked to its efforts to promote diversity.L’Oréal published its first international Diversity Reportin 2015 (www.diversityreport.loreal.com).

Using sourcing as a catalyst for social inclusionIn 2010, L’Oréal created Solidarity Sourcing, a globalpurchasing programme designed to allow even thesmallest companies to bid on Group contracts andhelp people from underprivileged communities findlasting employment and an income. 25 new projectswere introduced in 2015, bringing the total numberof Solidarity Sourcing initiatives to 208, benefiting34,800 people around the world. Meanwhile, TheBody Shop’s Community Fair Trade programme hasprovided access to employment for 22,400 people—

meaning a total of 57,200 people now benefit fromthese two inclusive sourcing programmes. L’Oréalhas pledged to associate 20% of its strategic supplierswith the programme, by 2020 (see page 24). By theclose of 2015, 4% of these suppliers had implementeda Solidarity Sourcing initiative.

Promoting access toemployment and social inclusion

SOLIDARITY SOURCING

FAIRTRADE COTTON FOR L’ORÉALPROFESSIONNEL HAIRDRESSERS

In late 2014, the Group’s buyers

began rolling out a project to ensurethe responsible sourcing of cotton.The initiative is being developedin partnership with FairtradeInternational and the Kédougou

cooperative in southeast Senegal. The region grows high-quality cotton through an environmentally friendly processthat uses only rainwater. L’Oréal buys the cotton at a pricethat ensures additional income for growers. In 2015, L’OréalProfessionnel—the first brand to join the partnership—bought 62 tonnes of this cotton to make bath towels that thebrand gives to its hairdresser clients. More than 500 cottonfarmers in Kédougou benefited from this programme.


SOLIDARITY

SOURCING

HIRINGPEOPLE WITHDISABILITIES*

MORE THAN

60,600 PEOPLEfrom underprivilegedcommunities have gainedaccess to employment.

57,200 PEOPLE accessed work through theSolidarity Sourcing programme,including 22,400 through The BodyShop’s Community Trade initiative.

773 PEOPLE with disabilities workfor L’Oréal.

* This includes the total number of declared disabled employees on permanent and fixed-term contracts as of December 31st 2015. This figure only includes those employeeswishing to self-declare as having a disability. Employees affected by disabilities are sometimes reluctant to self-declare.

TOTALBENEFICIARIES

VOCATIONAL TRAININGIN THE BEAUTY SECTOR

2,700 PEOPLE in very difficult social or economicsituation received free vocationaltraining in the beauty sector throughthe Beauty for a Better Life pro-gramme, supported by the L’OréalFoundation.

http://www.sharingbeauty.com/employment-inclusionhttp://www.diversityreport.loreal.com/http://www.diversityreport.loreal.com/http://www.sharingbeauty.com/employment-inclusion


24/28

24

Find out more at www.sharingbeauty.com/suppliers


By 2020, 100% of L’Oréal’s strategic supplierswill be involved in its sustainabilityprogramme. The Group’s objective is twofold:to select its suppliers based on theirenvironmental and social performance, andto provide them with the tools needed to ensurecontinuous improvement.

Supplier involvement: a cornerstoneof the CSR strategy Suppliers are an integral part of the environmental,social and ethical commitments made by the

L’Oréal Group. Since 2002, all buyers have beenimplementing the responsible sourcing policy knownas the L’Oréal Buy & Care programme, which makessuppliers an integral part of the Group’s CSR initiatives.First and foremost, its strategic suppliers are regularlyassessed. These are suppliers who provide theGroup with significant added value by contributingtheir influence, innovation, strategic alignment andgeographic positioning in long-term support ofL’Oréal’s strategy.

Assessing suppliers’ CSR performanceSourcing teams forge their supplier relationshipsaround five performance pillars: quality, supply chain& service, CSR, innovation and competitiveness. Theapproach is underpinned by a standard assessment

used worldwide and harmonised across all sourcingdomains. The CSR pillar represents 20% of the totalassessment. It covers both environmental and socialconsiderations through a set of criteria including:• the results of social audits: 951 social audits werecarried out in 2015, for a total of 7,080 social auditssince 2006;• an Ecovadis assessment of suppliers’ CSR policies: bythe end of 2015, more than 400 suppliers—137 of themstrategic (up from 130 suppliers in 2014, of which 92were strategic)—had been assessed, representing atotal of more than 74% of the Group’s strategic suppliers;• capacity to offer responsible products and services

(green chemistry, eco-design packaging and POSdisplay design, etc.);• CDP Supply Chain score (see inset).

Providing access to training toolsRegarding good practices’ sharing, the first two trainingtoolboxes were made available to suppliers in 2015.All suppliers invited to take part in the CDP SupplyChain and the Ecovadis assessment have been givenaccess to online resources that allow them to gain abetter understanding of L’Oréal’s expectations in termsof CSR, calculate their CO

2 emissions and interpret

their results. E-learning programmes, videos and otherresources will expand this range of solutions, which willbe hosted on an online platform exclusively for L’Oréalsuppliers from early 2016.

Joining forces with suppliers tomeet the Group’s commitments

CLIMATE

THE CDP SUPPLY CHAINSince its suppliers’ activitiesrepresent more than 20% ofits carbon emissions, L’Oréalconsiders such activity to bepart of its broader environmentalfootprint. In 2009, the Group beganinvolving suppliers in measuring

and reducing its carbon footprint by asking them to workwith CDP through the CDP Supply Chain programme.CDP is an NGO that encourages companies to publishtheir environmental impact data and provides tools formeasuring, evaluating and communicating this data.237 out of 253 suppliers (94%) took part in 2015, comparedwith 192 out of 215 (89%) in 2014. L’Oréal also made a newcommitment in 2015: by 2020, suppliers accounting for 80%of the Group’s purchases of raw materials, packaging andcontract manufacturing will have set and communicatedtheir targets for reducing carbon emissions through CDP.Suppliers who have already met this commitment nowrepresent 40% of the purchasing amount.

SELECTION

51%of the Group’s strategic suppliers have beenevaluated and selected based on theirenvironmental and social performance. Theyrepresent more than 70% of direct purchases(raw materials, packaging and contractmanufacturing).

SELF-ASSESSMENT

74%of strategic suppliers have completeda self-assessment of their sustainabilitypolicy with L’Oréal’s support.

http://www.sharingbeauty.com/suppliershttp://www.sharingbeauty.com/suppliers


25/28


25


Find out more at www.sharingbeauty.com/social-model

By the end of 2015, all essential componentsof the L’Oréal Share & Care programme—which embodies the Group’s drive touniversalise its social model—were inplace in all countries in which L’Oréal hassubsidiaries. And by 2020, 100% of L’Oréalemployees will have access to training.

The L’Oréal Share & Care programme:a catalyst for social progressL’Oréal has always sought to ensure that all of itsemployees enjoy the same level of safety and

protection, driven by the belief that one cannotdeliver sustainable growth without social performance.The L’Oréal Share & Care programme, unveiled in late2013, set out to provide minimal, universal guaranteesof social protection in all countries and to be in linewith the best practices in each local market by the endof 2015. By the end of 2015, all essential componentsof the L’Oréal Share & Care programme had beenimplemented in all countries in which L’Oréal hassubsidiaries. The programme covers four key areas:

• Care: healthcare, providing healthcare coverin line with the best practices available in the countryof residence and fast access to quality healthcare foremployees and their families;• Protect: social welfare, to provide employees with

financial support in the event of a non-work-relatedaccident;• Balance: parenting, to allow employees to makethe most of being a mother or father while continuingto pursue their career;• Enjoy: quality of working life.

The L’Oréal Share & Care programme also aims toturn each country into a social-innovation laboratory,which means encouraging all countries to implementinitiatives tailored to employee expectations. Theprogramme has also received the support of theInternational Labour Organization, which launched

the “Global Business Network for Social ProtectionFloors” in October 2015 to support the developmentof social protection systems around the world.L’Oréal is a founding member.

Learning for All: making stafftraining a priority L’Oréal believes that the development of its employees,whatever their function, country or position, is both akey performance driver and a question of responsibilityand universal knowledge sharing. The Group hascommitted to ensuring that all employees benefit from

at least one training session per year by 2020. 72.6% ofemployees attended at least one training session in2015. My Learning, an online training portal rolled outin 2013, has helped achieve this goal more rapidly.My Learning offers more than 4,000 teaching resourcesand is available in 11 languages and in all countries inwhich L’Oréal is present. By the end of 2015, the portalhad provided more than 70,000 hours of training, witha total of 33,000 regular users.

Universalising L’Oréal’s social model

HEALTHCARE FINANCIAL SECURITY TRAINING

86.6%of the Group’s permanent employeeshave healthcare coverage reflecting bestpractices in their country of residence.

72.6%of the Group’s employees attended at leastone training session in 2015.

78.4%of the Group’s permanent employeesreceive financial protection in the event ofnon-work-related personal injury, includingdeath or permanent disability.

Calculated according to the Group’s overall scope (Cosmetics and The Body Shop),representing 100% of the employees for the scope of the L’Oréal Share& Care programme.

TURKEY

COACHING FOR YOUNG MOTHERS

“This programme made me realise

how much L’Oréal was looking out

for me and supporting me at a

difficult time when I had to restorethe balance between my personal

and professional life,” says AysegulAkay, a senior accounting specialist

and one of the young mothers who have benefited from theseries of six personal coaching sessions offered by L’OréalTurkey to employees returning to work after maternity leave.These sessions are led by a professional coach and takeplace every two weeks, either in the workplace or outsidethe company. The national press has broadly covered theinitiative, which has been praised as an innovative measureto encourage working women and allow them to enjoymotherhood to the full while pursuing their careers.

http://www.sharingbeauty.com/social-modelhttp://www.sharingbeauty.com/social-model


26/28

26

Every year, L’Oréalcontinues to builddialogue with its

stakeholders and sets upad hoc committees to shareits sustainable developmentstrategy and co-createstrategic projects.

L’Oréal attaches greatimportance to stakeholdersdialogue, i.e. all players withwhom the Group interactsinternally or externally:associations and non-governmental organisations(NGOs), academics and thescientific community, consumers,customers, suppliers, employees,shareholders, extra-financialrating agencies and investors.Informing and consulting thesestakeholders is essential forsharing and strengthening

L’Oréal’s sustainable developmentstrategy, objectives andachievements.

A fluid approachto dialogueTo work jointly towards the SharingBeauty with All commitments for2020, L’Oréal established dialoguewith 754 organisations through forumsorganised by the Group in eightcountries between 2011 and 2013.

These discussions were continuedonline via a dedicated stakeholderplatform hosted on the www.loreal.

com website. Dialogue has beenongoing since 2013 throughpanels and consultationsorganised to target specificprojects. 58 NGOs, associationsand academic experts wereconsulted in 2015.

An external governance body The Panel of Critical Friends is anexternal committee set up as partof the Sharing Beauty With All

programme. The panel comprisesleading international expertson environmental and socialissues. It meets once a year,

joined by Jean-Paul Agon,to review progress, criticallyevaluate any action taken,suggest improvements andchallenge L’Oréal’s sustainabilitygoals. The Panel of CriticalFriends held its second meetingin Rio de Janeiro, Brazil, in

September 2015.

Chaired by José María Figueres,former President of Costa Ricaand Chairman of the CarbonWar Room, the panel comprisesHRH Celenhle Dlamini, MehjabeenAbidi-Habib, Analisa Balares,Lo Sze Ping, Christian deBoisredon, David Jones andKhalid AlKhudair, along withHelio Mattar, invited to jointhe panel from Brazil in 2015.

Stakeholders dialogue:a cornerstone of the L’Oréal

approach

A WORD FROM ALEXANDRA PALTCHIEF SUSTAINABILITY OFFICER

“Independent input fromexperts and associationsis vital. They push us togo even further and helpus create projects thatare both ambitious andeffective. In creating ournew carbon-balancedambition (see page 6),

we talked to more than 20 local associationsin India, Burkina Faso and Indonesia to definethe most relevant projects to develop on theground. We have set up a committee of carbonexperts tasked with reviewing the strengthof our approach. We have pursued ongoingdialogue with local and international NGOsin rolling out our “zero deforestation” policy inIndonesia and Malaysia (see page 14). And weare also involved in a campaign to better takeinto account local issues with regard to micasourcing in India through a collective approachwith our partners and associations.”

Left to right: Khalid AlKhudair, Helio Mattar, Lo Sze Ping, Mehjabeen Abidi-Habib,Alexandra Palt, Jean-Paul Agon, Analisa Balares, David Jones, José María Figueres,HRH Celenhle Dlamini.

Find out more about L’Oréal’s dialogue with stakeholders at: www.sharingbeauty.com/stakeholders

http://www.loreal.com/http://www.loreal.com/http://www.loreal.com/http://www.sharingbeauty.com/stakeholdershttp://www.loreal.com/http://www.sharingbeauty.com/stakeholders


27/28

Conceived and edited by the Sustainable Development Department and the Image and Corporate Communication Department.

Photograph credits: ©L’Oréal (cover), ©Getty Images (p. 2), ©Thomas Gogny (p. 4), ©AvBergerem for L’Oréal Research & Innovation (p.6-7), ©L’Oréal (p.7),©DR (p.7), ©Getty Images (p.10), ©L’Oréal (p.11), ©AvBergerem for L’Oréal Research & Innovation (p.12), ©L’Oréal Brazil (p.13 top), ©Fotolia (p.13 below),©L’Oréal (p.14), ©Alain Buu (p.15), ©L’Oréal China (p.16), ©Alain Buu (p.17), ©Léa GRIFFON &Tony CHEVALIER (p.18), ©Alain Buu (p.19), ©Bernard JASPAR(p.20 top), ©François KALIFE (p.20 below), ©Konstantinos MOUSTAKAS (p.21), ©L’Oréal (p.22), ©Max Havelaar France (p.23), ©Zeynep Yazgonul (p.25),©Aline Massuca (p.26 top), ©Thomas Gogny (p.26 below), X. Designed and produced by (RALO015).

The Lys Altitude paper on which the 2015 Progress Report is printed comes from sustainably managed forests and is 100% recyclable. It carries the FSC(Forest Stewardship Council) label. The purpose of this eco-certification is to promote responsible management of forests worldwide, management whichis environmentally-appropriate, socially-beneficial and economically-viable in order to meet the needs of present and future generations.

Reporting:proven performance

Climate change & energy transition

Sustainable packaging

Animal testing

Preservatives/parabensEndocrine disruptors

Waste management

Responsible advertising & marketing

Transparency

Ethics

Human rights

Water

Biodiversity

Responsible purchasing

Governance

Health & safety

Consumer awareness

Resource consumption

Palm oil

GMO

Efficient transport

Nanotechnologies

Community involvement

Stem cells

Employee well-being Diversity

Staff development & training

Product quality and safety Innovating sustainably

Producing sustainably

Living sustainably

Developing sustainably

I M

P O

R T A N C E

T O

S T A K E H O

L D E R S

I M P O R T A N C E T O L ’ O R É A L

• In 2015, the extra-financial rating agency Vigeoranked the Group number one in its sector. L’Oréal’sscore of 68/100 was the highest score across all sectors.• Another extra-financial rating agency, OekomResearch AG, ranked L’Oréal number two in theHousehold & Personal Products sector, and, for thefourth year in a row, awarded the Group “Prime” status,a distinction given to top-performing companies.• For the third consecutive year, L’Oréal has beenacknowledged as a leader by CDP, an independentinternational NGO that evaluates companies’ effortsto measure, declare and reduce their CO

2 emissions.

In 2015, L’Oréal achieved an “A” rating—reflecting thehighest level of performance—in the Climate DisclosureLeadership Index (CDLI) for its carbon-footprintmanagement policy and its strategy to combatclimate change, along with a score of 99/100 for the transparency of its policy.• For the sixth consecutive year, the Ethisphere Instituteranked L’Oréal as one of the “world’s most ethicalcompanies” in 2015.

Every year, L’Oréal publishesthree reports providing a detailed,transparent breakdown of its strategy,its challenges and its results withregard to social and environmentalresponsibility: the RegistrationDocument, the CommunicationOn Progress in line with theUnited Nations Global Compact,and the Sharing Beauty with AllProgress Report, which is releasedat the Group’s shareholdermeeting in April and publishedon the dedicated website

www.sharingbeautywithall.com.

In 2012, L’Oréal conducteda “materiality analysis” in whichthe Group compared the expecta-tions of its internal and externalstakeholders with its own prioritiesto identify 29 “material” issues. This toolallows L’Oréal to revise its targets,evaluate the relevance of its indica-tors and adapt reporting accordingly.

Find out more about reporting at:www.sharingbeauty.com/reporting

Improvements in L’Oréal’s CSR performance over time and its reporting throughthe use of reliable, robust indicators reviewed by statutory auditors (including

some indicators with a reasonable level of assurance) have made the Group anindustry leader in CSR.

http://www.sharingbeautywithall.com/http://www.sharingbeauty.com/reportinghttp://www.sharingbeautywithall.com/http://www.sharingbeauty.com/reporting


28/28

Incorporated in Franceas a “Société Anonyme”with a registered capital

of € 112,596,669.60632 012 100 R.C.S. Paris

Headquarters:41, rue Martre

92117 Clichy Cedex, FranceTel: +33 (0)1 47 56 70 00Fax: +33 (0)1 47 56 86 42

Registered office:14, rue Royale

75008 Paris, France

sbwa progress report 2015.doc

Documents