RATING

Neutral

SECTOR

Cosmetics

Chief Sustainability Officer

Alexandra Palt

Contact Details:

Alexandra Palt – Chief Corporate Responsibility Officer and CEO of the Fondation L’Oréal

Stock Exchange and Ticker

OTC: LRLCY

Website

L’oreal

Contact

T: +33 1 47 56 70 00

E.mail: corporateaffairsuk@loreal.com

Listing

#69 World’s Top Female-Friendly Companies (2022)
#1 Mexico’s Best Employers (2022)
#63 World’s Best Employers (2022)
#202 Global 2000 (2022)
#279 Canada’s Best Employers (2022)

Awards

CDP: AAA for six years in a row
S&P Global Ratings: 85/100
Global Compact LEAD for the seventh consecutive year
Ethisphere: 12th year
Bloomberg Gender-Equality Index
Universum: No.5
#4 Equileap Global Gender Equality ranking

Revenue

€27.94B

Market Capitalisation

€194.30B

Employees

85,252

Content source

L'oreal Sustainability Report

Evaluation of L'oreal

Every new and redesigned product is subject to improvements by L’Oréal Paris in terms of its social and environmental impact. Agronomy, biotechnology, and biofermentation are just a few of the cutting-edge fields being researched by 21 Research and Innovation centres of the largest personal haircare products and cosmetics corporation in the world. The corporation is also concentrating on designing more recyclable, more compact packaging. Unfortunately, the group´s sustainability report lacks a clear way to track its progress over time. Also, they aim to become carbon neutral rather than directly reducing its product and processes´ GHG emissions. Despite this, it has some excellent rankings and indexes. Regrettably no relevant certifications were achieved in the field of sustainability and emission reduction. Finally, it generally enjoys a positive reputation among reviewers and writers from independent sources. The final grade is a C.

Sustainability Scorecard

L'oreal Company Activity

L’Oréal SA engages in the manufacture and sale of beauty and hair products. It operates in four different segments. The Professional Products segment manufactures products which are used and sold in hair salons. The Consumer Products segment offers beauty and care products for men and women which are sold in mass market retail channels. The L’Oréal Luxe segment markets high-end skin care and beauty products in selective retail outlets such as department stores, perfumeries, and travel retail. The Active Cosmetics segment offers dermocosmetic skincare products which are sold in pharmacies and specialist sections of drugstores. L’Oreal also claims to fulfil the beauty desires ethically and responsibly.

L'oreal Sustainability Activity - As per company declarations

L’Oreal’s commitments focus on three key areas – the planet, the people, and products. L’Oréal has decided to take its efforts even further through a program called “L’Oréal for the Future”. This program provides an insight into L’Oreal’s commitments towards 2030 and marks the beginning of a more radical transformation and embodies their view as to what a company’s vision, purpose and responsibilities should be to meet the challenges facing the world. Loreal has invested largely in a greener, more responsible image in the last 3-4 years, launching several lines of products that are, or claim to be, healthier and mostly constituted by natural ingredients. However, there have been a few calls for greenwashing in regard to their claims of recycling packaging and some of the ingredients they use.

Certificate & Labels, Standards and Frameworks

COSMOS Organic standard
COSMOS Natural
ISO 16128
Fair For Life

L'oreal in the news: Press Reviews and Social Media

L’Oréal lifts the lid on sustainability strategy | Vogue Business

aThe “Green Sciences” strategy of L’Oréal for sustainability focuses on biotechnology, low-impact methods of extracting ingredients from plants, and eco-extraction. According to Paul Anastas, a co-author of green chemistry, 29% of the company’s ingredients were created using green chemistry. Consumer education and a specific website for product transparency are both part of the plan. Despite a 37% increase in production volume during the same period, L’Oréal has reduced the CO2 emissions of its factories and distribution centers by 78% since 2005. According to the report, by 2030, no ingredients will be connected to deforestation, with 68% coming from verified sustainable sources. In order to restore one million hectares of degraded ecosystems and absorb 15-20 million tons of CO2, the company is establishing a €50 million Fund for Nature Regeneration.

Sustainable beauty: L’Oréal successfully launches inaugural €3 billion bond with sustainability-linked tranche – BNP Paribas CIB

Three tranches make up L’Oréal’s €3 billion initial public bond offering, one of which is sustainability-related. Strong investor demand resulted in an oversubscription of more than 3.5 times the total offering for the issue. The €1,250 million, 4.25-year sustainability-linked bond (SLB) targets, among other things, packaging improvements and emissions reductions. The target is to reduce GHG emissions by 14% per sold product unit from a base year of 2021 by 2025.

L’Oréal aims 95% sustainable ingredients in its products by 2030 – Premium Beauty News

By 2030, L’Oréal wants 100% of its formulas to be aquatic environment-friendly and 95% of its ingredients to come from renewable plant sources. The organization is mobilizing all of its capabilities in the field of green sciences, including developments in agronomics, biotechnology, and green chemistry.

Beauty brands exposed for ‘misleading and mendacious’ packaging claims, https://cosmeticsbusiness.com/news/article_page/LOreal_P_and_G_and_LOccitane_accused_of_greenwashing_in_new_findings/201904

Unilever, P&G, L’Oreal, and L’Occitane are accused of greenwashing. Usage of recyclable and ocean-bound plastic is a common claim. The Changing Markets Foundation has identified several businesses that have made “misleading and mendacious” claims.

Highlights from L'oreal Sustainability Report

Achievements

By the end of 2021, six of L’Oréal’s 39 plants worldwide had earned Waterloop status, and 100 of its sites were “carbon neutral”
Women hold 55% of the Group’s key positions

Weaknesses and Setbacks

- Aim to achieve carbon neutrality instead of aiming reduction in direct GHG emissions
- Lack of KPIs
- Lack of measurable progress, hard to find evidence for change toward their goals

Targets vs Progress Reported

Target	Results reported
By 2025, all its sites will achieve carbon neutrality by improving energy efficiency and using 100% renewable energy	58% of its sites achieved carbon neutrality by improving energy efficiency and using 100% renewable energy
By 2030, we will innovate to enable our consumers to reduce their greenhouse gas emissions resulting from the use of our products by 25% compared to 2016, on average and per finished product (tCO2eq/kg of formulas sold)	12% reduction in their greenhouse gas emissions resulting from the use of its products by 25% compared to 2016, on average and per finished product (tCO2eq/kg of formulas sold)
In 2030, 100% of the water used in its industrial processes will be recycled and reused in a loop (L/kg of formulas sold)	15% of the water used in its industrial processes recycled and reused in a loop (L/kg of formulas sold)/td>
By 2030, 100% of biobased ingredients for formulas will be traceable and will come from sustainable sources. None of them will be linked to deforestation	94% of biobased ingredients for formulas are traceable and come from sustainable sources
By 2030, 95% of its ingredients in formula will be biobased, derived from abundant minerals or from circular processes	60% of its ingredients in formula are biobased, derived from abundant minerals or from circular processes
By 2030, 100% of the plastic used in its packaging will be either from recycled or biobased sources 5	21% of the plastic used in its packaging is either from recycled or biobased sources
By 2030, 100% of the waste generated in its industrial sites will be recycled or reused	59% of the waste generated in its industrial sites is recycled or reused
By 2030, it will help a further 100,000 people from disadvantaged communities gain access to employment	13,946 people from disadvantaged communities gained access to employment
By 2023, it will have invested 50 million euros to support highly vulnerable woment	12M euro investment to support highly vulnerable women

UN SDGs Compliance Analysis

Progress made toward SDG targets
As reported by L’oreal

SDG 2

Biotherm has committed to using more renewable ingredients, creating formulas that are increasingly respectful of the oceans, developing more sustainable packaging and designs, and raising awareness worldwide about the environmental challenges facing the planet’s oceans

SDG 5

In 2021, the Group continued efforts to combat violence against women with the global rollout of its #StOpE initiative
55% of the Group’s key positions are held by women

L’Oréal partnered with Swiss startup Gjosa to develop a practical solution for hair salons: the Water Saver showerhead. This innovation can rinse out shampoo with just 2.4 litres of water, compared with the usual 7 litres

SDG 10

A new initiative to promote inclusion was launched in 2021: the first Beauty of Inclusion Awards. The competition, open to all employees worldwide, recognises and celebrates the most noteworthy initiatives supporting employees, consumers or communities. These initiatives cover all four aspects of the Group’s Diversity, Equity and inclusion programme: gender and LGBTQIA+, disability, socio-economic and multicultural origins, age and generations
L’Oréal’s engagement on these topics received further recognition in 2021, with the Group featured in the Refinitiv Diversity & Inclusion Top 100 and listed fourth in the Equileap Global Gender Equality ranking

In the premium skincare category, Absolue by Lancôme’s bottle is made of 40% recycled glass and can be purchased with an easy-to-use refill, reducing plastic use by 63% and cardboard by 37% compared with a full set
Biotherm was the first cosmetics brand to create a fully recycled bottle using Carbios technology in 2021
L’Oréal collaborated with Carbios to develop the first cosmetics bottle made entirely of recycled plastic using enzymatic technology
In all categories—fragrance, skincare and makeup—the brands have stepped up innovation and creativity to develop bottles that are appealing, high-quality and more sustainable. Mugler, which is a pioneer in the field, has been following this approach since 1992 with its Fountains: Alien, Angel and Angel Nova bottles can be refilled at any of the 10,000 points of sale equipped with the system worldwide. The initiative saves 4,000 bottles every day—the equivalent of 383 tonnes of waste per year
To reduce the amount of plastic used in packaging, Kiehl’s now offers pouch refillables and reusable aluminium bottles for several body and haircare products. The serums in the Yves Saint Laurent Pure Shots range also come in refillable packaging

L’Oréal is developing solutions like dry shampoos, leave-in conditioners, solid shampoos and quick-rinse products that require less—or no—water to rinse out, in order to reduce CO2 emissions from the energy required to heat the water
Between 2005 and 2020, the Group reduced CO2 emissions at its plants and distribution centres by 81%, all while increasing production volume by 29%
In 2017 it became the Group’s first Waterloop plant, meaning it only uses city mains water for human consumption and as a raw material in product manufacturing. All other uses—cleaning equipment, producing steam, etc.—are covered by water which is recycled and reused in a closed loop. The site also includes a biomass power plant which enabled it to achieve carbon neutrality in 2015, a 1,500 square-metre solar farm and a biozone to promote biodiversity. This year, the plant added a greenhouse to dry sludge and reduce the waste it produces
L’Oréal USA—the Group’s largest subsidiary—achieved carbon neutrality in 2021 for direct and indirect emissions (scopes 1 and 2) at all 25 of its sites, including manufacturing plants, distribution centres, administrative sites and research centres
Installing high-output air compressors, vacuum pumps, and solar panels, and using locally produced renewable energy or renewable natural gas provided by the methane produced from the natural decomposition of organic materials

SDG 16

The Group rolled out its Human Relations policy on intimate partner violence in 2021 as part of its social innovation programme, Share & Care. This policy follows on from discussions with the International Labour Organization and the adoption of the first international convention on violence and harassment in the workplace

SDG 17

L’Oréal was the official sponsor of the opening ceremony for Climate Week NYC 2021, a major annual event in New York devoted to accelerating climate action by bringing together companies, governments and organisations

Sustainability Certificates, Awards and Listings

L´Oreal Sustainability Report