LOREAL_Registration_Document_2017

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

Scope 3 – emissions estimated annually Scope 3 covers all other greenhouse gas emissions not directly related to the sites operated by the Group or to the manufacture of products in our plants but to other stages in its life cycle (procurement, transportation, use, end of life, etc.) and other impacts related to the Group’s activities (business travel, etc.). These emissions are the subject of an annual estimate according to the GHG Protocol methodology. In 2017, work was carried out on Scope 3 of the GHG Assessment in order to improve its perimeters, input data and emission factors. For 2017, L’Oréal Group's GHG balance is estimated to be 9.76 million tonnes, representing an increase of 2 million tonnes compared with 2016: - 1 million tonnes from the updating of the emission factors s used; - 1 million tonnes from the improvement in the accuracy of s the perimeters considered. The GHG Protocol defines 15 types of emissions associated with Scope 3:

manufactured by the Group and their promotion at points of sale. These emissions include the extraction of materials, their transportation to suppliers, then their processing prior to delivery. Downstream transportation and distribution: 635 thousand s tonnes CO 2 emissions from this category derive from sold product transportation emissions: the transportation flows of finished products from the production sites up to the first customer delivery point. Capital goods: 573 thousand tonnes s CO 2 emissions from this category derive from emissions arising from capital goods acquired or purchased by L'Oréal in 2017 (property, production, IT etc.). End-of-life treatment of sold products: 535 thousand tonnes s CO 2 emissions from this category derive from the treatment of sold products after their use: packaging items treated in the existing channels and wastewater treated in water treatment plants. The CO 2 emissions for this category are mainly related to the nature and method of production of the energy used for each type of treatment. Upstream transportation and distribution: 163 thousand s tonnes CO 2 emissions from this category derive from emissions generated by the transportation of items purchased and transported to production and distribution sites. Business travel: 160 thousand tonnes s CO 2 emissions related to this heading correspond to business travel for all employees from all countries. These emissions take into account the different means of transport used (short-term car hire, train or plane). The Group’s commitments to a low-carbon economy have already led to several initiatives and achievements aimed at reducing the important categories under Scope 3: programmes conducted with the Group’s suppliers for s many years in order to raise their awareness of the main environmental issues and, in particular, the control of their CO 2 impacts. This is the case via the CDP Supply Chain, in which L’Oréal invited 376 suppliers to participate in 2017. Within the framework of the Sharing Beauty With All programme, participation by strategic suppliers has been made compulsory and 94% of the suppliers asked to participate have responded positively. In December 2015 at the time of the COP21, L’Oréal pledged that suppliers representing 80% of direct purchases: will participate in the “CDP Supply Chain”, • will set targets for reducing their carbon footprint, • will communicate on their action plans to succeed in • reaching this target;

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Upstream or Downstream Scope 3 categories Upstream 1. Purchased products and services 2. Capital goods

3. Fuel- and energy-related activities (not included in Scope 1 and Scope 2 emissions) 4. Upstream transportation and distribution 5. Waste generated by the sites 6. Business travel

7. Employee commuting 8. Upstream leased assets Downstream 9. Downstream transportation and distribution 10. Processing of sold products 11. Use of sold products 12. End-of-life treatment of sold products 13. Downstream leased assets

14. Franchises 15. Investments

The main types of emissions, representing over 90% of Scope 3 break down as follows: Use of sold products: 3,884 thousand tonnes s CO 2 emissions related to the use of L’Oréal products by consumers are due to the hot water used for rinsing off certain products, such as shampoos, shower gels, dyes etc. CO 2 emissions for this category are mainly related to the nature and method of production of the energy used to heat the water. Purchased products and services: 3,327 thousand tonnes s CO 2 emissions related to this category derive from the preparation of all of the materials used for the products

REGISTRATION DOCUMENT / L'ORÉAL 2017

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