L'Oréal - 2018 Registration Document

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

Anti-corruption measures implemented within the Group

Group-level risk assessment

The risk of corruption is included in the Group-level risk assessment. The corruption specific risk mapping established at Group level and in each country was updated in 2018. The Group currently has 105 corruption risk maps produced in 67 countries. A tool enables Country Managers to assess and analyse possible local ethical risks (including corruption) and to take the necessary prevention measures.

Specific Human Resources procedures

An ethical competency “Delivers both sustainable and short-term results with integrity” is included in the annual appraisal system for all employees.

L’Oréal’s “Speak Up” policy

This enables employees to express any concerns they may have, including with regard to corruption, namely directly via a secure website to the Group’s Senior Vice-President and Chief Ethics Officer. Any allegation raised in good faith is examined in detail and appropriate measures are taken, where necessary, in the event of non-compliance with the corruption prevention policy. The whistle-blowing line was opened to stakeholders in 2018.

An e-learning module for the prevention of corruption, available in 18 languages, has been rolled out in all countries; it had been taken by 71% of relevant employees as of 31 December 2018.

Training

Internal Control within the scope of the control procedures for operational activities

The Group’s Internal Control system provides for control procedures for operational activities and in particular with regard to separation of tasks. The implementation of the corruption prevention programme is part of the internal control self-assessment process rolled out in operational entities. L’Oréal’s Internal Audit teams are particularly vigilant in this respect. Corruption risks are systematically reviewed during audit engagements, through individual interviews and specific checks. These interviews are conducted separately with the Country Manager and the Administrative and Financial Director. They give rise to an individual report reviewed and signed by these latter persons.

Due diligence prior to proposed acquisitions

Responses to the “ethics questionnaire” submitted to target companies are intended notably to identify whether corruption risk prevention has been taken into account by companies.

The third-party management process (customers/suppliers) includes taking the risks of corruption into account. For intermediaries with public authorities, a specific guide has been made available to employees.

Third-party diligence

A commitment shared with the Group’s partners

A recognised approach L’Oréal has been recognised for the ninth time as one of the World’s Most Ethical Companies by the Ethisphere Institute.

L’Oréal wants to share its commitment to fight against corruption with its business partners and as such, compliance with the law is included in the Group’s general terms of purchase. It moreover reserves the right to put an end to any relationships with business partners who fail to comply with anti-corruption laws.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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