L'Oréal - 2018 Registration Document

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

Using the Group’s purchasing power to serve social inclusion The objectives of the Sharing Beauty With All programme express L’Oréal’s conviction that the reduction of the environmental footprint of its products has to be accompanied by an improvement in their social and societal benefit. Due to its many industrial and administrative sites all over the world, L’Oréal is strongly involved, in the vicinity of its sites, in the life of the surrounding local communities. A company committed to demonstrating strong corporate citizenship, L’Oréal makes a contribution to many local projects. As a general rule, the Group’s establishments and its subsidiaries build good relations with the communities in the areas in which they operate, and make every effort to share their growth with them. As part of the Sharing Beauty With All programme, this aim has resulted in a commitment to enabling more than 100,000 people from communities experiencing social or financial difficulties to access jobs by the end of 2020. This means that

L’Oréal will support as many people outside the Company as there are employees in the Group. Created in 2010, Solidarity Sourcing is L’Oréal’s global responsible purchasing programme. In 2018, 56,842 economically or socially vulnerable people accordingly benefited from decent and lasting employment under this programme (see section 3.3.3.4. “Solidarity Sourcing”) Its aim is to use the Group’s purchasing power to serve social inclusion. It consists in dedicating part of its purchases to suppliers giving people who are generally excluded from the labour market durable access to work and income. The Group is therefore continuing to open up its procurement process to companies who employ people from economically vulnerable communities, including small companies and those who have more difficulty in having access to multinational companies. Fair trade practices and equal opportunities have gradually become major pillars of the Group’s Solidarity Sourcing programme.

2018 RESULTS:

31 % of new or updated products have an improved social profile thanks, in particular, to the Solidarity Sourcing programme. (see section 3.3.1.3.3 Assesing the footprint of the products using the SPOT tool)

2020 TARGET

100%

In the particular case of raw material purchases, a prerequisite for Solidarity Sourcing projects is that they combine responsible agricultural practices, environmental protection and biodiversity, and that they generate a positive societal impact, notably through the implementation of fair trade principles. Examples include: Sourcing of shea butter: s Since 2014, 100% of our shea butter volumes have been • sourced from Burkina Faso. The Group’s purchasing contracts ensure prefinancing of crops, respect of a fair price, access to training and establishment of community projects to 37,000 women working together within groupings of women producers; In Burkina Faso, less than 3% of families have access to • electricity and 87% of households use wood for cooking. Energy expenditure represents almost one quarter of household budgets and 105,000 hectares of forest disappear every year. Since its introduction in 2016, the sustainable and fair sourcing system has striven to combat energy poverty and deforestation by facilitating

the distribution of so-called improved stoves to women. The project’s impacts are increasing: household wood consumption has reduced by half - and significant savings are being achieved, thousands of hours of unpaid work are avoided - (collecting wood, cooking), working conditions are improved (60% less smoke - in rooms), CO 2 emissions are reduced; - Sourcing of essential oils: s the Group sources essential oils from the SICA Bio-plantes • cooperative, an organisation of local producers in the Drôme provençale area, who cultivate 35 species of aromatic plants on almost 300 hectares; in addition to the organic farming certification covering • 100% of the surface area under cultivation by the producers, the cooperative also has a “bio-solidarity” certification, a label given to products arising from the North/North fair trade movement. In 2018, 29 farmers directly benefited from purchases of these raw materials.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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