L'Oréal - 2018 Registration Document

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

THE MAIN EMISSIONS ITEMS IN SCOPE 3 (IN THOUSANDS OF TONNES EQUIVALENT IN %)

UPSTREAM

Products and services purchased: 3,338 Capital goods: 513 Upstream transport and distribution: 160 Business travel: 157 Other items: 360

Downstream transport and distribution: 693 End-of-life treatment of sold products: 572 Use of sold products: 5,979 Other items: 82

DOWNSTREAM

3

The Group’s commitments to a low-carbon economy have already led to several initiatives and achievements aimed at reducing the important categories under Scope 3: Since 2009, L’Oréal has involved its suppliers in the process s of reducing its carbon footprint by encouraging them to participate in the CDP Supply Chain programme. In December 2015, at COP21, L’Oréal undertook to ensure that suppliers representing 80% of direct purchases participate in the CDP Supply Chain , set carbon reduction targets and communicate on action plans to achieve them; The Group has committed to a 20% reduction in the impact s of downstream transport per sales unit and per kilometre between 2011 and 2020 (see under “Reducing emissions from product transport (Scope 3 as per the GHG Protocol)”, section 3.3.1.3.1.); the Carbon Balanced commitment, providing that the s residual emissions for Scopes 1 and 2, and the downstream transport category of Scope 3, will be offset in 2020 thanks to an ambitious insetting programme: the remainder of these emissions must be balanced via the reduction of the carbon emissions in the sustainable sourcing channels for certain raw materials, in partnership with suppliers (see under “The Carbon Balanced project: towards a low-carbon company by the end of 2020”, section 3.3.1.3.1.); Lastly, L’Oréal, through its SBT commitment validated by the s initiative at the end of 2017, has sought to cover all impacts associated with its value chain. The 25% greenhouse gas emissions reduction commitment by 2030 (2016 baseline) covers all of its Scopes 1, 2, and 3 emissions (as per the GHG Protocol). to the climate emergency Conscious of the consequences of climate change, L’Oréal has initiated its transition towards an increasingly responsible business development model in which the extra-financial issues are placed at the same level as the financial objectives with a vision of global performance. The ambition is to design an innovative low-carbon business model and to make a contribution to the major collective challenge represented by limiting global warming. Adapting the model 3.3.1.4.

The Sharing Beauty With All programme, rolled out globally since 2013 and supported at all levels of the organisation, has helped establish a culture in which environmental impacts and climate change are taken into account, each day influencing the decision-making process of each of the Group’s " Métiers" , as well as their major projects, as shown by the policies, programmes and outcomes described above. In conjunction with this dynamic in favour of a low-carbon transition, L’Oréal is today rolling out the same ambitions in its desire to anticipate the effects of climate change and adapt its business model, its major governance and decision-making processes, its research, production and distribution to the constraints inherent in these future changes, but also to the opportunities that may emerge in its business sector, reflecting its values and its ambition of Beauty for All. In this approach, L’Oréal has aligned itself with the recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD), which encourages companies to include climate issues into their strategy, and to provide consistent, reliable and clear disclosure of information in order to allow investors to take into account climate-related financial risks in their decisions. Similarly, existing governance structures are adapted to facilitate the consideration of these challenges and their management. The identification, assessment and management of risks related to climate change are taken into account at the highest level, notably by the Board of Directors. The Chief Corporate Responsibility Officer facilitates an internal sustainable development committee, which includes experts responsible for the rollout of the Sharing Beauty With All programme within the Operations, Research, Public Affairs, Communication and Brands Departments. It guarantees the implementation of the orientations and decisions adopted by this committee. The Group’s risk review includes the risks associated with climate change, whether they represent physical risks or risks associated with changes in the Group’s value chain and its ecosystem. Risks as diverse as those associated with extreme weather events on the Group’s infrastructures, or those residing in the supply chain, those inherent in the scarcity of resources, carbon taxes and their financial impacts, or those related to the Group’s reputation and the expectations of consumers, are analysed, giving rise to the preparation of impact scenarios and the drafting of strategic guidelines.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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