| Business risks/Business ethics | |
|---|---|
| Risk identification | Risk management |
| As L’Oréal is an international group of over 85,000 employees, which operates in 80 countries at more than 400 sites (excluding stores and point-of-sales outlets of distributor customers), it cannot exclude potential violations of its ethical commitments (Code of Ethics based on the four Ethical Principles – Integrity, Respect, Courage and Transparency –, its Human Rights policy, support of the United Nations Global Compact and the United Nations Sustainable Development Goals, etc.), whether directly by its employees, or indirectly because of the activities of its partners, particularly its suppliers and subcontractors. In addition, civil society is expressing higher expectations with regard companies’ integrity and transparency and the way in which they manage scientific and technological innovations. Such non-compliance with its commitments or the lack of a response to new ethical questions could have an adverse impact on the Group’s reputation and expose it to criminal or administrative sanctions. |
The Group’s policies on sustainable development, social and societal responsibility, compliance and philanthropy are based on the Ethical Principles. The role and the resources granted to the Chief Ethics Officer allow him to succeed in his mission by relying on all the teams and resources of the Group (see section 3.2.1. “Organisation and environment” of this document). Specific training of management teams, regular dialogue with stakeholders and the establishment of internal working groups facilitate the inclusion of Ethics in the Group’s new policies and strategic decisions. The ethical risks are mapped and regularly updated, including for suppliers and subcontractors (see section 3.4.5.2. “Monitoring compliance with the Plan” of this document). The deployment of the Code of Ethics throughout the Group, mandatory e-learning training and ongoing communication campaigns via an Ethics Day, ensure that employees are aware of the ethical standards. A network of 77 Ethics Correspondents around the world and regular meetings of the Chief Ethics Officer with the Countries ensures close contact with these employees. Regular audits of the Group’s sites and those of its suppliers and subcontractors (see section3.4. “Vigilance Plan” of this document), the Group’s whistleblowing line (www.lorealspeakup.com) opened in 2018 accessible to all Group stakeholders, as well as a procedure to collect and process reports to manage any violations. |
| Business risks/Sales distribution networks | |
|---|---|
| Risk identification | Risk management |
| To sell its products, L’Oréal uses independent distribution channels, and may develop direct distribution to the consumer for certain brands (branded retail and e-commerce). The concentration of the Group’s large customers, the restructuring, disappearance or temporary closure of physical supply chains, and changes in selective distribution could impact the development of the Group’s brands in the country or countries involved. | The presence of the Group’s brands in all types of distribution channels allows the Group to offer its products and services, whatever the consumer practices. The departments concerned anticipate trends to adapt to these changes and, in particular, have steadily developed online sales with diversified partners (e-distributors, pure players, and marketplaces). |
| Business risks/Risks related to Human Resources | |
|---|---|
| Risk identification | Risk management |
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One of the keys to L’Oréal’s success lies in the talent of its employees to ensure its growth. This is all the more true as L’Oréal is changing within a complex, highly competitive and rapidly changing environment (globalisation, diversity and inclusion challenges, sustainable development issues, acceleration of the digital transformation, etc.) that requires specific expertise. The labour market is marked by major changes related to the COVID-19 pandemic, particularly the hybrid organisation mode with both in-person and remote. If L’Oréal fails to identify, attract, retain and train competent and engaged employees who behave responsibly, the development of its activities and its results could be affected. Moreover, given L’Oréal’s activities, particularly its industrial operations, the risk of occupational injuries or illnesses could become a reality. |
The Group is developing a motivating, professional environment with respect for its ethical values, particularly diversity. The recruitment and development of employees occurs within along‑term perspective, also to ensure the continuity of key functions within the Group, in which training plays a core role throughout an employee’s career. The remuneration policy combines external competitiveness and internal fairness. It recognises both individual and collective performance. The global Share & Care programme meets the essential needs of each of the Group’s employees in terms of benefits, healthcare, parenthood, flexibility and quality of life at work. Actions for stress prevention and workstation ergonomics are organised. In order to meet employees’ expectations in this new hybrid working environment, L’Oréal has developed a balanced Group policy to ensure that opportunities for cooperation, discussion and creativity are always prioritised. The Group has set ambitious goals for the health and safety of its employees, defining high standards that often exceed legal obligations and involve personnel at all levels. Prevention is based on the GHAP (Global Hazard Assessment Procedure) and SHAP (Safety Hazard Assessment Procedure) programmes, which identify the dangers, generally and for each workstation, assess the risks and allow the implementation of the necessary means of control (see section 4.3.2.1“Preserving employee health and safety” of this document). |
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