L'Oréal has had a system in place for many years for reporting, monitoring and controlling sustainability data. This system has been adapted to meet the new requirements(1) of the Corporate Sustainability Reporting Directive (CSRD, see section 4.1.3). Due to the standardised framework introduced by the CSRD through the European Sustainability Reporting Standards (ESRS), the Group has adapted the definitions it previously used for its sustainability reporting to align them with the ESRS.
This entailed formally documenting, in a single document (the “Book of Norms for Sustainability Reporting”), the definition, scope and controls for each metric required by the new regulations. This document is a constant work in progress, inasmuch as it is intended to be continually enriched by the findings of risk assessments and internal control points identified in both internal reviews and external reviews carried out by the Sustainability Auditors.
The Chief Financial Officer is responsible for preparing the Group's sustainability information, with the support of the Sustainable Finance and Legal Departments. This information is reported to the Audit Committee, which is responsible for monitoring issues relating to sustainability information and the related risk management system on behalf of the Board of Directors (see section 2.3.3.). The reporting and consolidation of sustainability data enable the Corporate Social Responsibility Department to steer the Group’s non-financial performance and pursue its CSR strategy, particularly in connection with the L'Oréal for the Future programme.
The quality and reliability of sustainability reporting is based on a three-level system:
The Sustainable Finance function ensures consistency by carrying out a critical review of variations as well as consistency controls between the different domains. At Country level, each finance team member identified as the Sustainable Finance contact point assists the function's specialist with reviewing their reporting.
Dedicated Sustainable Finance coordinators at Zone level consolidate and review the consistency of information between the various countries. The corporate support functions are responsible for performing controls on the consolidation of the information reported and aligning processes and working methods with the framework defined by the Group.
Information on sustainability reporting is relayed to the Group's teams through:
L’Oréal is built on strong ethical principles that guide its development: Integrity, Respect, Courage and Transparency. These Principles form the foundation of its policies on sustainability, corporate social responsibility, and philanthropy. L’Oréal promotes respect for all internationally recognised Human Rights and Fundamental Freedoms.
In line with the United Nations Guiding Principles on Business and Human Rights, L’Oréal’s particular points of reference are the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and the Fundamental Conventions of the International Labour Organization.
L’Oréal’s Vigilance Plan (the "Plan") meets the obligations of the French law of 27 March 2017 on the duty of vigilance for French parent companies and order-giver companies. It contains reasonable due diligence measures intended to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, health, safety and the environment within the framework of a best efforts obligation.
It applies to L’Oréal, the parent company of the Group, and to the subsidiaries controlled directly or indirectly by L’Oréal (the "Subsidiaries"), as defined by Article L. 233-16 of the French Commercial Code, and to suppliers and subcontractors with which the companies of the Group have a "permanent commercial relationship", i.e., a direct, ongoing and stable commercial relationship based on the definition in French case law (the "Suppliers"), depending on the risk level as identified in the Plan. It is understood that in its own activities, L’Oréal complies with the rules and procedures contained in the Plan, even when L’Oréal is not expressly mentioned therein. The Plan contains the rules applied to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, the health and safety of people and the environment resulting from the activities of L’Oréal, its Subsidiaries and Suppliers (see section 3.5.4). It also includes reasonable measures for the effective application of these rules by L’Oréal and its Subsidiaries and Suppliers as well as regular assessment procedures to evaluate their compliance (see section 3.5.5). It provides a whistleblowing and reporting system (see section 3.5.6) and presents a report on the plan’s implementation (see section 3.5.7). The actions to support, encourage and prevent serious adverse Human Rights, Fundamental Freedoms, health, safety and the environment contained in the Plan constitute reasonable efforts to be implemented by Suppliers and Subsidiaries. Given the diversity of the businesses of the Subsidiaries and Suppliers, the Plan contains common measures for them.
In addition to these common measures, L’Oréal and its Subsidiaries voluntarily conduct additional actions on these same issues. These initiatives are described in other chapters, in particular chapter 4. Suppliers voluntarily conduct additional actions on these issues and L’Oréal encourages them to do so.
