Corruption prevention measures implemented within the Group
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Group-level risk assessment
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The risk of corruption is included in the Group risk assessment. Following the update conducted in 2020, which used a more robust methodology, the Group has produced 93 corruption risk maps in 75 countries. A tool also enables Country Managers to assess and analyse possible local ethical risks (including corruption) and to take the necessary prevention measures. |
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| Specific Human Resources procedures | An ethical competency “Delivers both sustainable and short-term results with integrity” is included in the annual appraisal system for all employees. |
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L’Oréal’s “Speak Up” policy
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This enables employees to express any concerns they may have, including with regard to corruption, namely directly via a secure website to the Group’s Chief Ethics, Risk and Compliance Officer. Any allegation raised in good faith is examined in detail and appropriate measures are taken, where necessary, in the event of non-compliance with the corruption prevention policy. The whistle-blowing line was opened to employees in 2008, and then to stakeholders in 2018. |
| Training | A compulsory online training programme (e-learning) on the prevention of corruption, available in 18 languages, has been rolled out in all countries; it had been taken by 85% of the employees concerned as at 31 December 2021. |
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Control and assessment of measures and procedures dedicated to the prevention of corruption
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The Group’s Internal Control process provides for control procedures on operational activities, in particular for the separation of tasks. Moreover, accounting controls for the prevention of corruption are performed periodically. The implementation of the corruption prevention programme is part of the Internal Control self-assessment process rolled out in operational entities. L’Oréal’s Internal Audit teams are particularly vigilant in this respect. Corruption risks are systematically reviewed during audit assignments, through individual interviews and specific checks. These interviews are conducted separately with the Country Manager and the Administrative and Financial Director. They give rise to an individual report reviewed and signed by these latter persons. |
| Due diligences prior to proposed acquisitions | A procedure specific to corruption risks integrates appropriate and proportionate verifications at the different steps of the acquisition process. Responses to the ethics questionnaire submitted to target companies are intended to identify whether corruption risk prevention has been taken into account by the companies. |
| Third-party due diligences |
The third-party management process (customers/suppliers) includes corruption risk. An assessment of corruption risks is conducted on our third parties, and appropriate verifications are implemented, which rely primarily on a dedicated tool. For intermediaries with public authorities, a specific guide has been made available to employees. |
A commitment shared with the Group’s partners
L’Oréal wants to share its commitment to fight against corruption with its business partners and as such, compliance with the law is included in the Group’s general terms of purchase and the new version of the Mutual Ethical Commitment Letter. It moreover reserves the right to put an end to any relationships with business partners who fail to comply with anti-corruption laws.
A recognised approach
L’Oréal was recognised for the twelfth time as one of the“World’s Most Ethical Companies” by the Ethisphere Institute.
4.3.5. Tax policy
L’Oréal considers that the contribution of taxation is an integral part of its social, environmental and societal responsibility and constitute a way to participate positively to the development of the countries in which the Group operates.
The L’Oréal Group’s tax policy forms part of the sustainable development of its business and is based on three pillars: Compliance, Transparency and Legitimacy, as defined in the internal Tax Charter prepared and distributed around the world.
Compliance
L’Oréal completes its tax declarations and pays its taxes by the deadlines in compliance with the laws and regulations in the countries in which the Group operates. Special vigilance is required on compliance with the rules related to the fight against tax fraud and tax evasion.
L’Oréal is located in countries where it conducts a real operational and commercial activity. If applicable, the Group’s presence in certain so-called “tax haven” countries is justified for operational reasons and the development of its activity, and not for tax purposes.
L’Oréal ensures that transactions between Group companies are carried out in compliance with arm's length principle as defined by the OECD and satisfies increasingly digitalized reporting obligations (transfer pricing documentation, country-by-country reporting, etc.).
L’Oréal aims for excellence in tax compliance.