L’Oréal is built on strong Ethical Principles that guide its development. These Principles – Integrity, Respect, Courage and Transparency – form the foundation of its policies on sustainable development, corporate social responsibility, and philanthropy. L’Oréal promotes respect for all internationally recognised Human Rights and Fundamental Freedoms.
In line with the United Nations Guiding Principles on Business and Human Rights, L’Oréal’s particular point of reference is the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural rights, and the Fundamental Conventions of the International Labour Organisation.
L’Oréal’s Vigilance Plan meets the obligations of the French law of 27 March 2017 on the duty of vigilance for French parent companies and order-givers companies.
It contains reasonable due diligence measures intended to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, health, as well as safety and the environment within the framework of a best efforts obligation.
It applies to L’Oréal S.A., the parent company of the Group, and to the subsidiaries controlled directly or indirectly by L’Oréal (the “Subsidiaries”), as defined by Article L. 233-16 of the French Commercial Code, and to suppliers and subcontractors with which the companies of the Group have an “permanent commercial relationship”, that is, a direct, ongoing and stable commercial relationship (based on the definition in French case law), hereinafter the “Suppliers”, depending on the risk level as identified in this Vigilance Plan. It is understood that in its own activities, L’Oréal complies with the rules and diligences contained in this Vigilance Plan, even when L’Oréal is not expressly mentioned therein.
The Vigilance Plan contains the rules applied to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, the health and safety of people and the environment resulting from the activities of L’Oréal, its Subsidiaries and Suppliers (see section 3.4.4. “Applicable rules resulting from the risk analysis”). It also includes reasonable measures for the effective application of these rules by L’Oréal, its Subsidiaries and Suppliers as well as regular assessment procedures to evaluate their compliance (see section 3.4.5. “Effective application and compliance with the Vigilance Plan”). It includes a whistleblowing mechanism and reporting system (see section 3.4.6. “Whistleblowing mechanism and reporting system”) and presents a report on the plan’s implementation (see section 3.4.7. “Reporting on the effective implementation of the Vigilance Plan”).
The actions to support, encourage and prevent serious adverse Human Rights, Fundamental Freedoms, health, safety and the environment contained in this Vigilance Plan constitute reasonable efforts to be implemented by Suppliers and Subsidiaries. Given the diversity of the businesses of the Subsidiaries and Suppliers, the Vigilance Plan contains common measures intended for them on these issues.
In addition to these common measures, L’Oréal and its Subsidiaries voluntarily conduct additional actions on these same issues. These actions are described in other chapters of this document, particularly Chapter 4 “L’Oréal’s Social, Environmental and Societal Responsibility”. Suppliers voluntarily conduct additional actions on these issues and L’Oréal encourages them to do so.
As part of a continuous improvement process, this Plan is regularly reviewed by a committee composed of representatives of the Ethics, Risk and Compliance Department, the Operations Division (EHS, Purchasing), the Human Resources Department, the Corporate Social Responsibility Department and the Legal Department. It meets three times a year. Each of these representatives leads a local network (Ethics Correspondents, Environmental, Health and Safety, Purchasing, and Human Resource teams, managers from Internal Control, Sustainability Leaders) around the world, which also means that feedback from the field can be considered in improving the Plan.
The Plan was presented to internal stakeholders (such as the employee representatives in the context of the European Works Council, “EWC”, of the Group) and qualified outside stakeholders. Its updated contents are presented every year to the Audit Committee and to the Board of Directors.
The risks of serious impacts on Human Rights, the environment, health and safety, have been analysed on the basis of the business of L’Oréal, its Subsidiaries and its Suppliers. The risk analysis was used, first, in the definition of the applicable Rules and, second, to the measures for effective application and monitoring of these Rules.
L’Oréal’s activity consists of production of cosmetic products and distribution of these products to the Group’s clients.
L’Oréal manufactures the vast majority of the finished products that it sells in its own factories, with a presence in the major growth markets through its network of 39 factories equipped with the very latest technologies and advances in automation. This network of plants adapts constantly with agility to incorporate acquisitions and embrace external innovations.
This network is completed by production subcontracting, to meet temporary demand peaks in the case of specific technologies (make-up pencils, soaps, etc.). L’Oréal’s contracts prohibit cascade subcontracting. If, due to manufacturing constraints, some subcontractors must subcontract a portion of the production intended for L’Oréal, they must obtain authorisation from L’Oréal. When, in certain cases, the subcontractor is authorised to subcontract a portion of its production, the same rules as those defined in this Plan are applied to the subcontractors of the subcontractors, and the same types of controls and sanctions in the event of non-compliance are in place.
In order to execute their production, L’Oréal’s factories purchase different raw materials, filling and packing components and equipment from third-party suppliers. These suppliers have specific expertise, develop their products and have the infrastructures necessary for their production. They act with complete independence from L’Oréal, without depending on L’Oréal’s instructions or expertise.
The manufacture of filling and packing components is not part of L’Oréal’s activity(1). The filling and packing components used are purchased from companies specialising in this area. The same is true for the production equipment.
