LOREAL_Registration_Document_2017

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

Working alongside suppliers and subcontractors Above and beyond its strict requirements with regard to its own sites, L’Oréal has for a number of years deployed an environmental policy all across the value chain of its products and its activities. Indeed, L’Oréal works in partnership with its suppliers to improve the environmental profile of its products via the eco-design of packaging, ingredients and formulas and their method of transportation. A worldwide joint development initiative with transportation partners, Sharing Beauty With All Transportation Labs , has been implemented in Europe, Africa Middle East, North America, Latin America, Asia-Pacific and Brazil. The Group has brought together more than 200 international, regional and local suppliers in order to share its Sharing Beauty With All commitments and to develop sustainable transportation initiatives. L’Oréal also makes available to its suppliers training tools aimed at promoting the Group’s best practices. The Group invited 376 suppliers to participate in 2017 in the “CDP Supply Chain” , the CO 2 emission reporting programme for companies. In order to support its suppliers in this demanding process, L’Oréal sends their results with its comments and the opportunities for improvement to each of them. The Group also provides them with a toolbox to help them to understand the CDP questionnaires better. These actions contribute to supporting them in the development of their environmental strategy and monitoring the improvement of their performance year after year. In 2015, the Group set itself the ambition that, by 2020, suppliers representing 80% of the direct purchases: will participate in the “CDP Supply Chain ”; s will set targets for reducing their carbon footprint; s will communicate on their action plans to succeed in s reaching this target. The Group also ensures control of the environmental risks associated with the activities of its subcontractors, focusing on compliance with local environmental laws and verification of the absence of environmental risks, by means of EHS audits (see section 3.1.3.2.). Where a difficulty is identified, an improvement plan is then defined and progress checked regularly. Monitoring the Group’s main greenhouse gas emissions For the fifth year running, L’Oréal was given a score of “A” by the CDP, representing the highest level of performance of the Climate Leadership Index with regard to management of its carbon footprint, its strategy with regard to climate change and the transparency of its policy. L’Oréal carries out a Greenhouse Gas Assessment (GHG Assessment) for all the Group’s activities annually, in order to measure its CO 2 emissions and identify the action plans that will enable it to reduce its impact. This Assessment, which has been prepared since 2007 is made in accordance with the Green House Gas Protocol (GHG Protocol) rules, the international reference method for recording GHG Emissions. It

makes it possible to determine the Group’s total carbon footprint according to three defined Scopes: Scope 1: " direct emissions from sources owned or s controlled by the reporting entity" ; Scope 2: " indirect emissions in connection with the s consumption of electricity, heat or steam necessary for production of the product or the operations of the reporting entity"; Scope 3: " other indirect emissions related to the supply s chain (upstream emissions) and the use of products and services during their life cycle (downstream emissions)". In 2017, work was carried out to improve all scopes of the GHG Assessment tool in order to refine its perimeters and input data and to align emission factors with those of SPOT ( Sustainable Product Optimisation Tool : the Group's own tool for assessing the environmental and social footprint for its products). Scopes 1 and 2 – emissions measured and reported on a monthly basis These CO 2 emissions are measured by all the Group’s sites and reported monthly. Scopes 1 and 2 correspond to those for which the Group takes direct action via programmes to control energy consumption deployed on the sites and for the procurement of renewable energy. They are the subject of ambitious reduction targets as part of the Sharing Beauty With All programme (see section 3.2. Sharing Beauty With All programme): the "Producing sustainably" objectives cover the industrial s sites (plants and distribution centres), and provide for a reduction of 60% in CO 2 emissions in absolute value between 2005 and 2020; the commitments related to the Working Sustainably s programme cover all the administrative sites and research centres, with a reduction target of 60% in CO 2 emissions in absolute value by 2020 from and 2016 baseline. For 2017, all these emissions represented 65.7 thousand tonnes for the plants and distribution centres, and are -73% down as compared to 2005, and 33.2 thousand tonnes for the administrative sites and research centres down 17% vs 2016. The margin of uncertainty at the Group level is approximately 1% for plants and distribution centres and 5% for administrative sites and research centres. Scopes 1 and 2 – emissions estimated annually Scopes 1 and 2 were supplemented this year: energy consumption from the use of long-term hire vehicles, s previously reported under Scope 3 (business travel); energy consumption from stores operated by the Group. s For 2017, total emissions are estimated to be 34.7 thousand tonnes for long-term hire vehicles and 16.7 thousand metric tonnes for branded retail stores. The margin of uncertainty at the level of the Group is approximately 20-30%.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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