2021 UNIVERSAL REGISTRATION DOCUMENT

Respecting biodiversity - Traceable biobased ingredients from a sustainable source

The calculation of the percentage of biobased ingredients for traced formulas from a sustainable source is based on the following definitions:

• a raw material is considered to be biobased when more than 50% of the carbons it contains are of plant origin (according to ISO 16 128);
• an ingredient is considered traced when the following three pieces of information are available: the botanical species, the country in which it grows or is collected, the growing or collection method;
• an ingredient is considered to be sustainably sourced when, on the basis of the elements of traceability, it has been analysed for environmental and social risk (SCAN Index);
  • either no risk has been identified and the raw material is considered to be sustainably sourced,
  • or risks have been identified and an adapted action plan must have been put in place with this supplier. This action plan must have been verified by an independent third party (e.g., audit, certification, land project established with the support of an NGO) that verifies compliance with the basic and progressive criteria of sustainable sourcing of the Group’s raw materials.

This indicator is calculated on the basis of actual purchases between January and November 2021.

Reduction of the water consumption related to the use of the products

Scope of consolidation refers to the data on the products sold over a period of 12 months from 1 January to 31 December of 2021.

The calculation of this indicator is based on the evaluation of the volume of water necessary-in other words, the value calculated on the basis of an average water volume necessary per usage dose-for the use of the Group’s products by consumers. These data are provided by the IDG management software, which is the source of the data used for the economic results and which contains all the figures for worldwide sales of finished products, both rinse-off and leave-in. The only exception is samples, which are not products sold and are therefore not taken into account.

Eco-designed products – SPOT

Eco-designed products are new or renovated products that have an improved environmental or social profile. The indicator covers the Group’s scope and concerns new or renovated products by production centres that were manufactured by the Group’s factories or subcontractors and that had an availability date at the distribution centres cheduled for between 1 January 2021 and 31 December 2021. The analysis concerns all international brands that were in the Group before 2013. The following are excluded from the scope: all products that were designed or renovated but not yet produced, full-buy products (i.e. products not packaged at L’Oréal but purchased as FP from a supplier), products not for sale (i.e. samples, testers and one shots), promo products and any brand acquisition made after 2013 that had not yet fully integrated the product design ecosystem (e.g. LOGOCOS, THAYERS, TAKAMI, etc.) or new creation. The indicator covers products with formulas /packaging that have been developed and produced for the first time, products with formulas/packaging that were renovated in 2021 or products that have been improved in terms of the social component.

Ingredients in formulas are from biobased sources, derived from abundant materials or from circular processes

Scope of consolidation

The scope of consolidation corresponds to the twelve months of 2021. The scope corresponds to the cosmetic products manufactured in the L’Oréal factories and the purchases of finished products from subcontractors. The scope of the L’Oréal factories covers only the factories operating under the SAP WISE system, which permits the feedback of information via the IDG information system. To date, there are only four Group factories that are outside the scope (India: factories in Pune and Badi), the Magdal factory in Israel and the Nairobi factory in Kenya). Thus, reporting covers 99.4% of production from our factories. This indicator is evaluated for all the Group’s active formulas and is calculated on the basis of the data on production volume. The data are processed, including consistency checks and correction of anomalies if necessary.

Data

Calculation of this indicator relies solely on the dry material, excluding the “water” used in certain formulations.

There are three elements that are calculated independently:

• The biobased portion: this represents the percentage of raw materials of renewable origin in our portfolio according to the definition of ISO 16 128.
• The abundant mineral portion: this refers to the percentage of ingredients of mineral origin, the abundance of which allows sustainable use and the inorganic ingredients (non-mineral and not containing any carbon atoms, oxygenated water for example) obtained by green processes. The definition of abundant minerals is established by the Raw Materials Department (DIMP) with the assistance of an expert consultant from the French Bureau of Geological and Mining Research (Bureau de recherches géologiques et minières - BRGM). An initial list was available at the start of 2022 that covers 40% in volume of the minerals used by the Group (characterising 463 raw materials). This list will be updated during the coming years (updateable list)
• The circular process portion: the definition of this sub-element is still being established by the Raw Materials Department (DIMP) with the assistance of experts and will be available in the near future.

Resources – Data on packaging indicators

Scope of consolidation

The packaging data cover all the finished products leaving the factories, with the exception of certain finished products for which the data are not yet linked to the central information systems, such as MINDS. This is the case for the products from the factories in Migdal, Nairobi, Funza or Salzhelmmendorf, for certain subcontracted products from recent acquisitions, and packaging specific to Travel Retail. These packaging data exclude POS /PLV materials.