LOREAL_Registration_Document_2017

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

Actions implemented in the Group in favour of Human Rights In addition to the measures already described in L’Oréal's Vigilance plan (see paragraph 2.8.4.), a number of voluntary measures have been introduced within the Group:

Risk assessment

Risk assessment with regard to Human Rights is based in particular on the indicators of the Verisk Maplecroft index (1) . A tool enables Country Managers to assess any local ethical risks (including with regard to Human Rights). Since 2013, 88% of countries (2) have carried out an ethics self-assessment. The precise analysis of supplier and subcontractor risks is carried out by the Purchasing Department, namely through social audits. All of L’Oréal's plants and distribution centres worldwide are audited on a regular basis in the area of respect for Human Rights, employment standards and health and safety. These audits are carried out by external independent service providers following the same framework used for suppliers. These audits are mainly based on the SA 8000 standard recognised worldwide (see section 3.2.4.2.). All plants and distribution centres are subject to a social audit every three years. All sites were audited in 2014-2015. The 2017-2018 campaign is under way and 62% of sites had been audited by the end of 2017. An annual ethics reporting system enables monitoring of the implementation of the ethics programme, particularly with regard to Human Rights. The Countries are informed of their potential areas for improvement by the Office of the Chief Ethics Officer. 100% of the countries completed their annual ethics reporting practices in 2017. Ethics Day: an annual day on ethics has been organised since 2009. A live webchat with L’Oréal’s Chairman and Chief Executive Officer enables all the Group’s employees to ask questions and exchange on the application of L’Oréal’s Ethical Principles on a day-to-day basis, including respect for Human Rights. Ethics chats are also organised locally with each Country Manager. In 2017, over 60% of the employees took part in these chats and over 5,700 questions were asked worldwide. The Senior Vice-President and Chief Ethics Officer regularly visits the Group’s entities all over the world to meet employees at all levels of the Company. In 2017, within this framework, he visited 18 countries, making a total of 81 countries visited since the end of 2013. 99% of the countries have communicated on at least one topic related to Human Rights. Employees also have access to a dedicated intranet site which provides additional information on ethics, including on Human Rights. A specific, compulsory e-learning course on ethics covering Human Rights issues in particular is currently being rolled out in all countries. As of 31 December 2017, 74% of the employees with access to the online module had completed this course. s 29 in-room training sessions were provided to 436 employees, representing 866 hours of training in 2017. s In 2017, 111 purchasers were trained in responsible purchasing practices. This training is compulsory for any s new purchaser. 94% of the Group’s countries included subjects related to Human Rights in their local training programme. s In accordance with its commitments to compliance with the principles of the Convention on Biological Diversity, in 2005, L’Oréal included in its sustainable sourcing policy for renewable raw materials compliance with the rights of indigenous peoples, which is based on obtaining a prior agreement, and the guarantee of a fair return to the local populations. During an acquisition of premises or construction site project, L’Oréal must ensure that the former owners and occupiers have not been unfairly removed and/or that any expropriation by the authorities has been conducted in accordance with international law. This includes namely checking that the previous owner but also the occupiers/users of the land have been consulted, have given their free and informed consent and have been compensated, where appropriate. The agreement of the Group’s Security and Safety Department is required before choosing a new security services provider or renewing an ongoing contract with such a service provider. Where it is locally possible, L’Oréal gives preference to security service providers who have adhered to the International Code of Conduct for Private Security Service Providers. The subsidiaries enter into contracts locally for property security services and check on the skills, official accreditations and training of security guards. The answers to the “Ethics and Human Rights questionnaire” submitted to target companies are intended to identify whether the risks related, inter alia , to failure to respect Human Rights (abolition of child labour and compulsory and forced labour, etc.) have been taken into account by such companies. This enables employees to express any concerns they may have, including with regard to Human Rights, in particular to the Group’s Senior Vice-President and Chief Ethics Officer directly via a secure website. 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 Human Rights policy. No allegation of any Human Rights violation, and namely the violation of the rights of indigenous peoples, was reported to the Group’s Senior Vice-President and Chief Ethics Officer in 2017. A “Treats all individuals in a respectful and consistent manner” ethical competency is included in the annual appraisal system for all employees.

Ongoing communication

Training

Specific Human Resources procedures

Operational procedures

Due diligence prior to proposed acquisitions

L’Oréal’s “Open Talk” policy

Verisk Maplecroft is an internationally renowned risk analysis and strategy consulting firm, which provides a wide spectrum of risk analyses, including (1) risks related to Human Rights. Excluding L'Oréal Caribe and L'Oréal entities in France (2)

REGISTRATION DOCUMENT / L'ORÉAL 2017

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