L'Oréal - 2018 Registration Document

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

Improving biodegradability through eco-design The Group is working to measure and increase the biodegradability of its formulas and reduce their water footprint. These two parameters have been integrated into the SPOT product eco-design tool. To classify the products according to the benefits offered to the consumer, all 19 product types manufactured by the Group (shampoos, hair care products, shower gels, skin care products, cleansers, hair colours, styling products, deodorants, sun care products, make-up, perfumes, etc.) were analysed. After defining 143 categories of products and screening more than 40,000 formulas between 2014 and 2015, the performance of each consumer benefit category was established to allow eco-design of products using the SPOT tool to ensure that all new formulas are developed with the goal of an improved environmental profile with identical benefits for the consumer. It is used by all teams of product formulators to assess the biodegradability and water footprint whenever new formulas are created. Between 2013 and 2017 the aggregate biodegradability of the Group’s formulas increased by 4 percentage points to 80%. Over the same period, the overall water footprint of the Group’s formula portfolio was reduced by 5% in absolute terms, on an increase of roughly 4% in the amount of raw materials used.

Among the new products launched in 2018, the products below have formulas with biodegradability levels of over 98% across L’Oréal’s Divisions:

Dercos Nutrients Nutri Protein Mask

Vichy

Color Herbalia Haircare Instant pre-makeup mask Biolage R.A.W. rebalancing treatment

Garnier

Shu Uemura

Matrix

Raising awareness among consumers about sustainable lifestyle choices By end-2020, the Group wants to empower all L’Oréal consumers to make sustainable consumption choices. The SPOT environmental and social assessment tool, rolled out to all of the Group’s brands (excluding recent acquisitions), established the environmental and social profile of all new products in a process dating back to 2017. Our teams are now working to make the SPOT product assessments accessible, through a social and environmental information system that is relevant for consumers and in line with European recommendations on the subject. The system is under development and will be finalised and rolled out to the Group’s brands by end-2020. In conjunction with the development of the tool, each brand will have assessed its environmental and societal footprint by end-2020 and will have made commitments to improve it (see 3.3.1.3.3).

3

In 2018, 88% of brands assessed their environmental and social impact

2020 TARGET

100%

Conscious of the influencing ability of its brands, L’Oréal encourages them to inform and mobilise their business partners, customers and consumers around today’s major environmental and social causes. Each brand must therefore identify a cause of its own and conduct awareness campaigns among its consumers. This commitment by the Group aims to meet the needs and expectations of consumers: according to the global survey conducted by Cone Communications in 2015, 90% of consumers are more likely to buy a brand that is committed to a cause, provided that the price and quality are the same. Moreover, 37% of consumers say they attach importance to corporate sustainability practices and policies, and 53% would even be prepared to boycott a brand if it was irresponsible in terms of sustainable development. These aspects underline the strategic importance for a brand of investing in a cause that reflects its identity, its values and its ecosystem (consumers, muses, distributors, etc.).

Since 2011, Armani has been working on a global initiative s for access to drinking water in partnership with UNICEF, WaterAid and Green Cross International; Since 2012, Biotherm has been partnering with NGO Mission s Blue for the protection of oceans; La Roche-Posay is taking a stand against skin cancer (more s than 100 million people have committed to getting their moles checked to prevent melanoma since the campaign started in 2014); L’Oréal Professionnel is committed to the prevention of s musculoskeletal disorders (more than 330,000 hairdressers had their awareness raised in 2018); Garnier has joined forces with Unicef to support children s living in countries affected by a humanitarian crisis, which affect 1 child out of 4, or 537 million children worldwide; SkinCeuticals, the skincare expert brand, for its part s launched, with the NGO ReSurge International, a programme to train the first generation of women in reconstructive surgery in developing countries; L’Oréal Paris Men Expert, a L’Oréal Paris brand, has s partnered with the Movember Foundation, an international

REGISTRATION DOCUMENT / L'ORÉAL 2018

183