L'Oréal - 2018 Registration Document

3 L’Oréal’s corporate social, environmental and societal responsibility NON-FINANCIAL RISKS

Main Human Rights risks In 2017, L’Oréal conducted analysis to identify the risks of non-compliance with the Human Rights and Fundamental Freedoms that have the greatest exposure to the most serious negative consequences potentially resulting from the Company’s business activities and relationships. The risks were identified via a broad consultation at the Group’s most directly concerned entities (over 300 employees consulted around the world). The Human Rights risk assessment is also based on the Verisk Maplecroft indicators (1) . The findings of this risk analysis have been included in the Human Rights policy. They cover the following issues: consumer health (product quality and safety, promotion of healthy behaviour and in particular the fight against eating disorders) and respect for privacy s (protection of personal data); the Human Rights of L’Oréal employees and employees of the Group’s suppliers in their working conditions (absence of child labour, forced labour, s discrimination and sexual or moral harassment, respect for their freedom of association and the right to collective bargaining, their privacy and their health); the Human Rights of communities potentially impacted by the Group’s activities (respect for the environment, right of access to water, consideration of s Human Rights in the choice of raw materials and in particular the right of access of local populations to their land and respect for their traditional knowledge under the Nagoya Protocol); the rights of women insofar as they may face a greater risk of negative Human Rights impact. s Locally, a tool enables Country Managers to assess any local ethical risks (including with regard to Human Rights). Since 2013, 92% of Countries (2) have conducted an ethics self-assessment. Main corruption risks L’Oréal operates in many countries where the risk of corruption can be significant and could lead L’Oréal employees, as well as third parties acting in its name or on its behalf, directly or indirectly, voluntarily or involuntarily, to adopt practices contrary to the Group’s ethical principles and the prevailing regulations. Corruption takes a variety of forms that are not necessarily easy for employees to identify. For instance, the exchange of gifts or invitations of excessive value could be perceived as corruption. The assessment of corruption risk is materialised by specific mapping, carried out at Group level and by each country in its local context. The Group’s activities involve relations with: public authorities and their representatives, either directly or via intermediaries or professional bodies, to obtain the authorisations necessary for the s Group’s activities, for instance. The countries in which the Group operates must be given support in the fight against public corruption; the Group’s customers and suppliers; s journalists, doctors, etc., to whom products can be given so that they can recommend them. Relationships are also maintained with third parties that, s beyond the Group’s products themselves, issue various or general opinions on the Company. Any action potentially deemed as being intended to cause the persons in question to breach their obligation of loyalty must be avoided. Any breach of the Group’s anti-corruption principles may be prejudicial to L’Oréal and its partners. Equally, any failure of a partner may be detrimental to L’Oréal. The analysis of supplier and subcontractor risks is carried out by the Purchasing Department.

Verisk Maplecroft is an internationally renowned risk analysis and strategy consultancy that provides a wide spectrum of risk analyses, including risks (1) related to Human Rights. Excluding L'Oréal Caribe and L'Oréal entities in France. (2)

REGISTRATION DOCUMENT / L'ORÉAL 2018

152