LOREAL_Registration_Document_2017

3 L'Oréal’s corporate social, environmental and societal responsibility* THE SHARING BEAUTY WITH ALL PROGRAMME

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. •

The group gets its essential oils from the 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 2017, 29 farmers directly benefited from purchases of these raw materials.

PRODUCING SUSTAINABLY 3.2.2. “By 2020, the Group commits to reducing its environmental footprint by 60%”. Within the scope of the Sharing Beauty With All programme, strives to reduce its greenhouse gas emissions, its water L’Oréal has undertaken to improve its production conditions to consumption and its waste generation. It also pledges to reduce its environmental footprint by 60% in 2020 from a 2005 reduce the footprint from transportation of its products and to baseline. In all its plants and distribution centres, the Group no longer send waste to landfill.

2020 TARGETS

2017 RESULTS

Reducing CO 2

emissions at our plants and distribution centres

The percentage of achievement is already a 73% reduction in CO 2

emissions from

by 60% in absolute terms, from a 2005 baseline.

a 2005 baseline (1) .

Reducing our water consumption by 60% per finished product unit, from a 2005 baseline. Reducing waste generated by 60% per finished product unit, from a 2005 baseline.

A reduction of 48% in water consumption from a 2005 baseline (2) .

A reduction of 37% in waste generation from a 2005 baseline (3) .

Less than 0.1% of waste from plants and distribution centres was sent to landfill (4) . With one exception, all of the Group's plants and distribution centres achieved the target of zero waste to landfill (excluding regulatory obligations).

Sending zero waste to landfill.

Transportation of products led to CO 2

emissions of 357,770 tonnes in 2017, which

Reducing CO 2

emissions from transportation of products by 20%

represents 0.0228 g CO 2 emissions generated by transportation of products per sales unit/km, from a 2011 baseline (5) . sales unit/km. A 18% reduction in CO 2

per sales unit per km from a 2011 baseline.

The calculation of CO 2 (1) The water consumption calculation concerns plants and distribution centres. The reduction percentage is calculated in litres of water per finished product from a 2005 (2) baseline. The calculation of waste generation concerns plants and distribution centres. The reduction percentage is calculated in grams of waste per finished product from a 2005 (3) baseline. This indicator includes transportable waste (excluding returnable packaging rotation loops, with returnable packaging accouted at source). The percentage of waste sent to landfill is calculated by dividing the quantity of waste sent to landfill (0.85 tonnes ; excluding regulatory obligations by the total quantity of (4) waste generated (105,326 tonnes ; including returnable packaging rotation, excluding waste sent to landfill due to regulatory obligations and transport pallets). The scope of consolidation covers the transportation flows of finished products from the production sites up to the first customer delivery point. The calculations are made (5) for the Group scope with the exception of NYX Professional Makeup Professional Make-up Europe (flow IDC NYX Professional Makeup Europe to CDC Country or NYX Professional Makeup Country stores), Atelier Cologne, CeraVe, AcneFree, Ambi, and IT Cosmetics as well as products sold online from the Group’s websites The Statutory Auditors have expressed a reasonable assurance with regard to this indicator. ; emissions concerns Scopes 1 and 2 of plants and distribution centres. The reduction percentage is calculated in absolute value from a 2005 baseline.

Reducing greenhouse gas emissions 3.2.2.1. by 60% from a 2005 baseline As the cosmetics industry has a relatively low energy demand and relatively low CO 2 emissions as compared with other industrial sectors, L’Oréal’s production sites are not subject to the CO 2 emission quotas provided for by the European regulations. However, L’Oréal, a company that is invested in the fight against climate change, conducts a particularly proactive policy for the reduction of its CO 2 emissions. The Group, moreover, set itself ambitious targets as from 2009: reducing greenhouse gas emissions at its plants and distribution centres by 50% between 2005 and 2015. This objective was fulfilled in 2014 even though production volumes increased by 21% as compared to 2005. This performance continued for the following years and in 2017, a reduction of

73% in CO 2

emissions was achieved while production has

increased by 33% since 2005.

For the 5 th consecutive year, L’Oréal was recognised as one of the leading companies worldwide in the fight against climate change, by the annual CDP rating. L’Oréal was given a score of “A”, representing the highest level of performance against the Climate Leadership Index criteria with regard to management of its carbon footprint and its strategy with regard to climate change and the transparency of its policy. In order to limit its impact on climate change and to fulfil its objective of reducing greenhouse gas emissions, L’Oréal has deployed a strategy based on two axes: Reducing its energy requirements by improving energy 1. efficiency across all its facilities (buildings, equipment, etc. ); Making increased use of renewable energies. 2.

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