L'Oréal - 2018 Registration Document

3 L’Oréal’s corporate social, environmental and societal responsibility PERFOR MANCE INDICATORS AND RESULTS

ASSOCIATING THE GROUP’S SUPPLIERS WITH THE CDP WATER DISCLOSURE PROJECT As part of the Sharing Beauty With All programme, L’Oréal has undertaken to reduce its water footprint, joining the Water Disclosure Project, an initiative aimed at measuring and reducing suppliers’ water footprints, as soon as it was launched in 2013. In 2018, for the sixth edition of the Carbon Disclosure Project Supply Chain programme, L’Oréal selected 103 of its suppliers, mainly of raw materials, packaging and subcontracting products on the following three criteria: technology consuming particularly large amounts of water, location of at least one production site in a water-stressed area and the size of L’Oréal’s purchase volumes. 91 of them agreed to take part in the programme and will be given an individual result sheet showing the comments of the Group’s environmental experts, which will enable them to identify the key points for progress. L’Oréal also encourages these suppliers to measure, report and set themselves water consumption reduction targets for each of their production sites and to deploy a water-related risk assessment and management system. At the end of 2018, suppliers fulfilling this commitment represented 63% of costs in relation to all suppliers selected (raw materials, packaging items and subcontracting). Their average score is: B-.

ASSOCIATING THE GROUP’S SUPPLIERS WITH THE CDP FOREST DISCLOSURE PROJECT L’Oréal is committed to a target of Zero Deforestation, traceability of products with an impact on deforestation (palm oil and derivatives, paper, soybean, replanting projects, etc.) and has also been a participant in CDP Forest since 2012. In 2018, for the third consecutive time, L’Oréal received an A score for this CDP Forest element. With the new CDP Forest programme devoted to the supply chain, which was launched in 2018, L’Oréal has been encouraging its 38 main suppliers of paper, palm oil and soya to take part. As of the end of 2018, 84% of the selected suppliers had taken part in this second year. Reporting suppliers that have implemented a zero deforestation policy and related initiatives represent 34% of expenditure in respect of all selected suppliers (raw material, packaging items and subcontracting). Their average score is B-.

Encouraging strategic suppliers to self-assess their Sustainable Development policy In 2014, L’Oréal initiated a programme for assessment of strategic suppliers and their Sustainability policy. In addition to its own assessment, L’Oréal has mandated Ecovadis evaluate its suppliers’ Sustainable Development policies with the aim of fine-tuning supplier performance analysis and helping suppliers improve their performance by identifying areas for improvement. The Ecovadis evaluation enables L’Oréal not only to involve its suppliers in sustainable development, but also to encourage them to develop their ethics policies with a focus on combating corruption, monitoring the health and safety of their employees and the application of their sustainable purchasing policies (see 3.3.3.2. and also the following paragraphs “A commitment of the entire organisation”, and 3.3.4. “A commitment shared with the Group’s partners”). Results in 2018 In 2018, more than 620 suppliers undertook an Ecovadis assessment of their social, environmental and ethical policies, as well as their adoption by their own suppliers in 2018 (an increase of 139 suppliers compared with 2017). 161 of them represent 93% of the Group’s strategic suppliers.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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