L'Oréal - 2018 Registration Document

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

Throughout the product life cycle 3.3.1.3.3 For L’Oréal, the preservation of resources covers the entire product life cycle, from research to use. Through its brands, the Group involves the consumer in a responsible consumption approach. The Packaging & Development teams, the CSR team and the laboratories conduct, together with the Management Committees of the international brands, analyses of their portfolios of formulas and their packaging. The aim is to define sustainable innovation plans in order to systematically identify the possible improvement drivers for each range and each product in order to activate them.

As part of the "Innovating sustainably" pillar of the Sharing Beauty with All programme, the Group has made the commitment that all L’Oréal products will have an improved environmental or social profile by the end of 2020. Whenever a product is created or updated, its environmental or social profile is improved. The Group is promoting sustainable innovation by reducing the environmental footprint of its product formulas by respecting biodiversity through a raw material sustainable sourcing policy, packaging eco-design and committing to "zero deforestation”.

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In 2018, 79% of new or updated products have an improved environmental or social profile.

2020 TARGET

100%

In 2017, the SPOT (Sustainable Product Optimisation Tool) tool was rolled out to all Group brands (except recent acquisitions). This tool enables the complete environmental and social footprint of a product to be calculated in accordance with the European Commission recommendation (Product Environmental Footprint) on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations. A methodology for measuring the social impact of products has been jointly developed with internal expertise (formula, packaging, plant, stakeholders) and nine international experts in the field of social life cycle assessments (see section 3.3.1.3.2 Using the Group’s purchasing power to serve social inclusion). The SPOT tool provides exhaustive measurements of all environmental factors by integrating 14 impact factors used by the European product environmental footprint framework. A standardised version of these different impacts is applied on

the basis of the average impacts of a European consumer. Then, to obtain a single value for the product environmental footprint (formula and packaging), impacts are aggregated using the so-called “Planetary Boundaries” method developed by an international team led by Professor Johan Rockström of the Stockholm Resilience Centre. The final stage involves comparing the footprint to a benchmark in order to obtain a dimensionless score between 0 and 10 which allows the product design teams to measure their progress. The SPOT tool has replaced the previously used environmental and social improvement assessment systems for formulas and packaging. SPOT takes account of more criteria and allows for a more complete and demanding analysis where the different impacts are weighted according to their contribution to the product’s overall impact. This tool has enabled the environmental and social footprint of all updated or new products developed in 2018 to be assessed.

100% of new or renovated products in 2018 were assessed using the product assessment tool

2020 TARGET

100%

Improving the environmental profile of packaging: the 3Rs Packaging represents a significant part of the environmental impact of cosmetic products. The reduction in the environmental footprint of packaging is therefore naturally part of the “Innovating sustainably” commitment under the Sharing Beauty With All programme.

In 2007, L’Oréal launched a Packaging and the Environment policy based on three pillars, called the “3Rs”: Respect: respecting consumers, the environment and s biodiversity; Reduce: designing packaging components and finished s products with an optimised weight and size;

REGISTRATION DOCUMENT / L'ORÉAL 2018

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