LOREAL_Registration_Document_2017

3 L'Oréal’s corporate social, environmental and societal responsibility* THE SHARING BEAUTY WITH ALL PROGRAMME

INNOVATING SUSTAINABLY 3.2.1. “By 2020, 100% of the Group’s products will have an environmental or social benefit.”

2020 TARGETS

2017 RESULTS

76% of new products that have been screened have an improved environmental or social profile (1) .

100% of the Group’s products will have a positive environmental or social benefit. Every time it invents or updates a product, its environmental or societal profile will be improved against at least one of the following criteria: the new formula uses renewable raw materials that are sustainably s sourced or raw materials derived from green chemistry; the new formula reduces the environmental footprint, particularly with s regard to water;

48% of new or updated products have an improved social/environmental profile due to a new formula including sustainably sourced renewable raw materials or raw materials respecting the principles of green chemistry. 52% of new or updated products have an improved environmental profile due to a new formula with a reduced environmental footprint. 55% of new or updated products have an improved environmental profile due to improved packaging.

the new packaging has an improved environmental profile; s

the new product has a positive societal impact. s 31% of new or updated products have an improved social profile thanks to a positive social impact. These are new products, i.e. products for which new formulas have been developed and which are produced for the first time in the Group’s plants or products for which (1) packaging was changed/updated in 2017.

On an everyday basis, formulators are encouraged to use raw materials with a favourable environmental profile. Raw materials without any foreseeable impact on the aquatic environment, or sustainably sourced renewable raw materials or raw materials respecting green chemistry principles, are given preference as from conception of the formulas. profile assessment tool In 2017, the SPOT ( Sustainable Product Optimisation Tool ) tool has been rolled out to all Group brands (except recent acquisitions). This tool enables the complete environmental and societal/social footprint of a product to be calculated in accordance with the European Commission recommendation ( Product Environmental Footprint ) on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations. A methodology for measuring the social impact products has been jointly developed with nine international experts in the field of social life cycle assessments. The SPOT tool provides exhaustive measurements of all environmental factors by integrating 14 impact factors used by the European product environmental footprint framework. A standardised version of these different impacts is applied on the basis of the average impacts of a European consumer. Then, in order to obtain a unique product environmental footprint (formula and packaging), these impacts are added together using the so-called “Planetary Boundaries” method. The final stage involves comparing the footprint to a benchmark in order to obtain a dimensionless score between zero and 10 which allows the product design teams to measure their progress. A product environmental and social 3.2.1.1

The SPOT tool has replaced the previously used environmental and social improvement assessment systems for formulas and packaging. SPOT takes account of more criteria and allows for a more complete and demanding analysis where the different impacts are weighted according to their contribution to the product's overall impact. This tool has enabled the environmental and societal/social footprint of all updated or new products developed in 2017 to be assessed.

Giving preference to the use of sustainably sourced renewable raw materials

3.2.1.2

The Group’s constant concern with regard to the sourcing of its raw materials is, over and above quality considerations, to guarantee the sustainability of resources. In 2010, the signatory countries to the Convention on Biological Diversity adopted the Nagoya Protocol, aimed at regulating access to the genetic resources of a given region and the fair and equitable sharing of the benefits arising from the use of those resources. Conscious of these issues well before the Nagoya Protocol came into force, L’Oréal’s Research Department has continuously striven, since 2005, to adopt an approach aimed at securing its sourcing channels for the future to respond to the issues of sustainable use of Biodiversity. For this purpose, the Group gives preference, in particular, to the use of renewable raw materials, namely those whose carbon content is mostly of plant origin, and ensures that they are responsibly sourced.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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