The Chief Ethics, Risk and Compliance Officer regularly visits the Group’s entities all over the world (head offices, factories, distribution centres and research centres) to meet employees at all levels of the Company and visit the various sites.
The Chief Corporate Responsibility Officer, a member of the Executive Committee, is responsible for overseeing the respect of Human Rights and fundamental freedoms in the Group.
The ethical and Human Rights risks are mapped and regularly updated, which also includes suppliers and subcontractors(see section 3.4.3. “General framework of risk analysis” of this document). A practical tool has been created to enable Country Managers to assess and analyse possible local ethical risks and to take the necessary prevention measures. An annual reporting system is used to monitor the implementation of the Ethics and Human Rights programme. The subsidiaries are informed of their potential areas for improvement by the Department of Ethics, Risk and Compliance. Ethics risks are systematically reviewed during audit assignments, through individual interviews. These interviews are conducted separately with the Country Manager and the Administrative and Financial Director.
For prospective acquisitions, the responses to the Ethics and Human Rights questionnaire submitted to target companies serve to identify whether such companies take account of the risks related to business ethics, among others.
A specific and compulsory e-learning course on ethics is available in all subsidiaries. As of 31 December 2021, 76% of employees with access to the online module had completed this course. The Ethics, Risk and Compliance Department also provides face-to-face training as part of the ongoing training of managers and certain business functions (Country Managers, Buyers, Human Resources).
Compliance with the Ethical Principles is integrated in the annual appraisal system for all employees through three ethical competences: “Takes initiatives with courage and transparency”, “Achieves results with integrity” and “Acts with integrity and respects others”.
Regular communication with stakeholders and establishment of internal working groups facilitate the inclusion of Ethics in the Group’s new policies and strategic decisions (for example, the Ethical and Responsible Sponsorship Policy in 2021).
Regular audits of the Group’s sites and those of its suppliers and subcontractors, the Group’s secure whistle blowing line (www.lorealspeakup.com) accessible to all Group stakeholders, as well as a procedure to collect and process reports to manage any violations.
In 2021, 379 possible ethical violations were identified either via the secure website, the Ethics Correspondents, or local or international management. The cases reported are thoroughly examined and appropriate measures are taken, where applicable. Employees are regularly informed of the number of reports discrimination, sexual and other types of harassment at Group level worldwide, the number of fully or partially substantiated cases and the corrective measures taken.
Ethics Day has been held since 2009: a live stream with the Chief Executive Officer enables all of the Group’s employees to ask questions and discuss the day-to-day application of L’Oréal’s Ethical Principles. Each member of the Executive Committee and each Country Manager also organises local ethics discussions. In 2021, close to 40,000 connections were made across all sessions. Employees were heavily involved in this dialogue on Ethics, asking more than 8,000 questions.
In addition to the Ethics Day, employees receive regular information about the Group’s Ethical policy and have access to a dedicated Intranet site.
For many years, L’Oréal has begun a profound transformation of its model, in all areas, in order to adapt to the great changes in the world. In the firm belief that sustainable development is an essential factor for success and durability, L’Oréal is deploying an ambitious corporate social responsibility policy, which is shared by its management and teams (see section 4.3. “Policies, performance indicators and results” of this document).
In June 2020, L’Oréal initiated the second generation of its commitments to sustainable development, under the umbrella of a programme called L’Oréal for the Future, with a new set of particularly ambitious targets for 2030, in order to cover all the impacts associated with the Group’s value chain: its production and distribution sites as well as its supply chains and the impacts associated with the use of products by consumers. L’Oréal for the Future thus marks a new ambition for the sustainable development of L’Oréal with the intention to capitalise on previous achievements: the commitment from 2009 to reduce the environmental footprint of factories and distribution centres by 50% compared to 2005, then the Sharing Beauty With All programme launched in 2013 with sustainable production, sustainable innovation, sustainable consumption and shared growth targets for 2020, which has made sustainable development one of the Group’s key strategic pillars.
In 2015, L’Oréal also undertook to define Science-Based Targets (SBT) to reduce its greenhouse gas emissions across its entire value chain over the long term, in accordance with the Paris Climate Change Agreements. In December 2017, the SBT initiative validated the Group’s proposal: L’Oréal is committed to reducing greenhouse gas emissions on its Scopes 1, 2 and 3 by 25% in absolute value by 2030, compared with the 2016 baseline.
The sustainable development Coordinators worldwide are tasked with helping the Country Managers/Area Managers/Division Managers/Brand Managers in the implementation of the programme within their entity. The progress in local implementation of the Group’s commitments is monitored by means of an annual reporting system.
The Corporate Social Responsibility risks, and the progress of the policies put in place to deal with these risks, are reviewed regularly as part of the Internal Audit process and reported to the Audit Committee.
Since 2019, in collaboration with the Ethics, Risk and Compliance Department, L’Oréal’s Corporate Social Responsibility Department has conducted a deeper assessment of the risks related to climate change on the Group’s operations, using in particular the scenario analysis method, in order to improve its ability to anticipate and mitigate the impact of these risks.
It should be noted that the financial risks related to the effects of climate change and the measures taken by the Group to reduce them are described in Chapter 4 “L’Oréal’s Social, Environmental and Societal Responsibility”.
The Chief Corporate Responsibility Officer is L’Oréal’s representative for the United Nations Global Compact and the NGOs linked to its activity.
