| Industrial and environmental risks/Environment and safety | |
|---|---|
| Risk identification | Risk management |
| The L’Oréal Group, with its 88 industrial sites (owned factories and distribution centres), including 4 classified as “Seveso high threshold”, is exposed to various industrial risks related to the environment and safety(fires, explosions, failure of installations or safety systems, or even human failure in the operation of the existing facilities or management of the work, etc.), which can result in human injuries, accidental pollution at Group sites, or outside those sites, particularly when they are located in a populated area, and/or the temporary unavailability of an industrial site. If such events should occur, their impact could be of a financial, operational and/or reputational nature. |
The Group’s Environment, Health and Safety (EHS) policy aims to minimise the impact on the environment and guarantee the health and safety of employees, customers and the communities in which L’Oréal carries out its activities. As a result of this policy, the risks inherent in our business activities are systematically identified and brought under control. The Operations Department issues Internal Rules that set out the principles of L’Oréal’s EHS policy. Each site is covered by an EHS officer.EHS risk management programmes, methods and tools are implemented, and the corresponding training is being rolled out systematically. EHS performance indicators are collected monthly from all factories, distribution centres, and administrative and research sites with over 50 people. Specific audits are conducted by internal EHS teams, and external independent experts. Fire risk is dealt with in the framework of very strict fire prevention standards (National Fire Protection Association standards or equivalent). Industrial sites classified as “Seveso” are subject to specific procedures adapted to the nature of the risks related to storage of chemicals or flammable materials and are in compliance with the regulations. Since2020, the Group has extended compliance with the main requirements of the European Seveso Directive beyond the European Union to all sites it operates worldwide. Across all its sites, the Group strives to reduce its greenhouse gas emissions, its water consumption and its waste generation and to limit the impact of its activity on biodiversity. It also pledges to reduce the footprint from transportation of its products and to no longer send waste to landfill. Details of how the risk relating to the temporary unavailability of an industrial site is managed are given in the section relating to “Product availability”. |
| Legal and regulatory risks/Non-conformity | |
|---|---|
| Risk identification | Risk management |
| Many general and specific laws and regulations apply to the L’Oréal Group, such as the European REACH and CLP (Classification, Labelling, Packaging) regulations intended to strengthen the human and environmental safety of chemical products, the European Cosmetics Directive governing animal testing of ingredients, legislation on competition law, the control of international flows and corruption. The diversity and constant reinforcement of the regulatory environment expose the Group to a risk of non-conformity or increased compliance costs. L’Oréal could be exposed to a failure or an act of fraud (particularly payment methods), which could have an impact on the reputation, operations and results of the Group. Finally, in the ordinary course of its business, the Group will potentially be involved in all types of legal actions and may be subject to tax, customs and administrative audits. |
The Group’s Legal Charter reaffirms the obligation to comply with local legislation and, in particular, sets out the internal principles for signatures, the general and specific rules relating to contracts, trademark law, intellectual property law, company law, competition law, embargoes and economic sanctions and the protection of personal data. The Group has put in place rules on the terms of delivery and transport of its goods, with the aim of ensuring the control and compliance of formalities in terms of customs imports and exports. In addition, training on customs fundamentals is provided to all employees concerned. Furthermore, the Group’s Legal Department has set up a training programme on competition law for the employees concerned. L’Oréal is involved in an ongoing dialogue with national or regional authorities in charge of specifically regulating products in its sector through the professional associations to which it belongs. With regard to the REACH and CLP regulations, L’Oréal communicates proactively with its European suppliers in order to ensure a continuing supply of compliant raw materials. An action plan has been drawn up at L’Oréal in order to improve the design and methods used to assess the safety of raw materials. It led to the end of testing finished products on animals in 1989 (14 years before it became a legal obligation in Europe) and the development of predictive evaluation strategies to meet European regulations. The components of the Internal Control and Risk Management system implemented are detailed in this chapter. In the areas of fraud and corruption, the deployment to all Group subsidiaries of programmes to prevent corruption and raise awareness of the fraud risk (see section 4.3.4. “Policy to prevent corruption” of this document) contribute to the management of these risks. The Company has no knowledge of any governmental procedures, legal or arbitration proceedings, which are pending or threatened, that may have, or have had over the last 12 months, material effects on the financial position or profitability of the Company and/or the Group, other than those described in note 12.2. to the Consolidated Financial Statements appendix. The main legal risks are reported to the General Management and presented to the Audit Committee. |
