LOREAL_Registration_Document_2017

L'Oréal’s corporate social, environmental and societal responsibility* L’ORÉAL’S CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL POLICIES

The Advisory Board for the L’Oréal Share & Care programme In order to cast a critical eye over the programme, to provide an analysis of the main social trends and to study best practices in the major regions of the world, L’Oréal has set up an Advisory Board chaired by Jérôme Tixier, Executive Vice-President Human Resources, and composed of personalities from outside the Group representing different geographic zones, and consisting of academics, trade union officials or members of international organisations. Since 2014, the Advisory Board has met annually with the aim of providing support for developments in the L’Oréal Share & Care programme over the coming years, accordingly making a big contribution to the second stage of the programme, launched in January 2017. The international labour organisation associated with the L’Oréal Share & Care programme Preparation of the L’Oréal Share & Care programme attracted the attention of the ILO (International Labour Organization) in the context of its study on the contribution by large companies to broader social protection all over the world. A close collaboration was developed and enabled the ILO to launch the Global Business Network for Social Protection Floor in October 2015 which aims to act collectively and mobilise companies in order to create a basic set of social protection measures for everyone. L’Oréal is a founding member of this new business network created by the ILO to promote social protection all over the world. Currently, nearly 73% of the world’s population (1) does not have access to basic social welfare. However, some companies, like L’Oréal, have set up social protection systems for their employees world-wide. On the strength of these initiatives, the ILO has chosen to get major international companies together so that they can provide their contribution and support the creation and extension of a basic set of social protection measures all over the world. Employee benefit and pension 3.1.2.5. schemes L’Oréal wants to make sure that its employees benefit from competitive pension and benefit schemes in all countries. In accordance with the legislation and practices in each country, the Group contributes to the funding of pension schemes, pre-retirement arrangements and employee benefit schemes offering a variety of additional coverage for its employees. Since 2002, a Supervisory Committee for Pension and Employee Benefit schemes ensures the implementation of

these schemes in the subsidiaries and the monitoring of L’Oréal’s Pension and Employee Benefits policy. This policy provides for general principles in the following areas: defining and implementing schemes, relations with employees, financing schemes and the cost and management thereof. Approval must first be obtained from the Supervisory Committee prior to the introduction of any new scheme or the modification of any existing scheme. Approval must first be obtained from the Supervisory Committee prior to the introduction of any new scheme or the modification of any existing scheme. The Supervisory Committee works closely with the operational management of the Divisions and zones. L’Oréal’s commitments with regard to benefit cover are part of the “Protect” pillar of the L’Oréal Share & Care programme. In all countries, L’Oréal guarantees the payment of a capital sum, or equivalent pension, equal to a minimum of 24 months’ salary in the event of death or total permanent disability, or more where local practice is better. The characteristics of the pension schemes and other pre-retirement benefits offered by the subsidiaries vary depending on the applicable laws and regulations as well as the practices of the companies in each country. In 82% of the countries in which L’Oréal is established, the Group participates in extending additional retirement benefits for its employees that exceed the minimum benefits provided for by social security (United States, the Netherlands, Belgium, Brazil, Chile, Japan, Pakistan, Hungary). This policy is carried out through defined benefit and/or defined contribution schemes. In some cases, the defined benefit schemes have been closed to new recruits who are offered defined contribution schemes (Belgium, the Netherlands and the United Kingdom). In defined contribution schemes, the Company’s commitment mainly consists in paying a percentage of the employee’s annual salary (into a pension plan) each year. Defined benefit schemes are financed by payments into specialist funds or by setting up provisions, in accordance with the accounting standards adopted by L’Oréal. The performance of the managers of the main funds established, as well as the financial stability rating of the custodians, are regularly reviewed by the Supervisory Committee. L’Oréal does not propose company pension schemes in countries which do not have an appropriate legal framework or a long-term investment instrument and in countries where there is satisfactory public social security coverage. The Supervisory Committee continues to be attentive to changes in local situations and, when required, additional Employee Benefit schemes are put in place.

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OIT, World Social Protection Report 2014-2015. (1)

REGISTRATION DOCUMENT / L'ORÉAL 2017

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