L’Oréal

RATING

SECTOR

Household & Personal Products

WEBSITE

CONTACT

41 Rue Martre,
92117
Clichy, France
Tel: +33 1 47 56 70 00
Email: corporateaffairsuk@loreal.com

STOCK EXCHANGE

LISTING

  • Best Employers for Diversity 2020
  • Best Employers for Women 2019

EMPLOYEES

87, 974

CHIEF SUSTAINABILITY OFFICER

Alexandra Palt

AWARDS

  • L’Oréal has been highlighted as a global leader in corporate sustainability by environmental impact non-profit CDP

CONTENT SOURCE

FURTHER READING

Report created by Sagarika Deshmukh

L'Oréal

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

L’Oréal’s mission is to provide the best in cosmetics innovation to women and men around the world with respect for their diversity.

L’Oréal’s 34 international brands include Kiehl’s, Lancôme, Giorgio Armani Beauty, Yves Saint Laurent Beauté, Ralph Lauren, Clarisonic, Maybelline New York, Essie, Kérastase, Biotherm, Shu Uemura, Viktor&Rolf, Maison Martin Margiela, Urban Decay, Redken, Vichy, La Roche-Posay, Diesel, Garnier, L’Oréal Paris, and more.

L’Oréal SA engages in the manufacture and sale of beauty and hair products. It operates in the following segments:

  • The Professional Products segment manufactures products which are used and sold in hair salons. The Consumer Products segment offers beauty and care products for men and women which are sold in mass market retail channels.
  • The L’Oréal Luxe segment markets high-end skin care and beauty products in selective retail outlets such as department stores, perfumeries, and travel retail.
  • The Active Cosmetics segment offers dermo-cosmetic skincare products which are sold in pharmacies and specialist sections of drugstores.

L’Oréal also claims to fulfill the beauty desires ethically and responsibly.

Company Sustainability Activity

L’Oréal’s commitments focus on three key areas – the planet, the people, products. L’Oréal has decided to take its efforts even further through a program called “L’Oréal for the Future”. This program provides an insight into L’Oréal’s commitments towards 2030. This commitment marks the beginning of a more radical transformation and embodies their view as to what a company’s vision, purpose and responsibilities should be to meet the challenges facing the world.

Highlights

  • Reduced the CO2 emissions to the planet and distribution centers by 78%, in absolute terms, compared to 2005, while increasing the production volume by 37% in the same period.
  • 85% of products launched or renewed in 2019 have an improved social or environmental profile.
  • 90,635 people in underprivileged communities have gained access to employment through one of L’Oréal’s programmes.
  • 89% of L’Oréal brands have conducted an assessment of their social and environmental impact.

Targets

Fighting Climate Change

  • By 2025, all of L’Oréal’s manufacturing sites will have achieved carbon neutrality by improving energy efficiency and using 100% renewable energy.
  • By 2030, L’Oréal will reduce the CO2 emissions resulting from the use of products by 25% compared to 2016, on average and per finished product.
  • By 2030, L’Oréal will reduce by 50% on average and per finished product, the greenhouse gas emissions linked to the transport of their products, compared to 2016.
  • By 2030, L’Oréal strategic suppliers will reduce their direct emissions (scopes 1 and 2), by 50% in absolute terms, compared to 2016.

Managing Water Sustainably

  • By 2030, L’Oréal will evaluate its guarantee to be respectful of all aquatic ecosystems, whether continental or coastal.
  • By 2030, L’Oréal will innovate to enable consumers to reduce the CO2 emissions resulting from the use of L’Oréal’s products by 25% compared to 2016, on average and per finished product.
  • In 2030, 100% of the water used in L’Oréal’s industrial processes will be recycled and reused in a loop.
  • In 2030, all of L’Oréal’s strategic suppliers will use water sustainably in the areas where they operate.

Respecting Biodiversity

  • By 2030, 100% of the bio-based ingredients for formulas and packaging materials will be traceable and will come from sustainable sources. None of them will be linked to deforestation.
  • To limit L’Oréal’s impact on natural habitats, L’Oréal is committing to holding flat, by 2030, the total land occupancy vital to the sourcing of their ingredients, compared to 2019.
  • By 2030, 100% of L’Oréal’s industrial sites and all operated buildings will have a positive impact on biodiversity, compared to 2019.

Preserving Natural Resources

  • By 2030, 95% of L’Oréal ingredients in formula will be bio-based, derived from abundant minerals or from circular processes.
  • By 2030, 100% of the plastics used in L’Oréal’s packaging will be either from recycled or bio-based sources (we will achieve 50% by 2025).
  • By 2030, L’Oréal will reduce by 20% in intensity the quantity of packaging used in products, compared to 2019.
  • By 2025, 100% of L’Oréal’s new displays will be eco-designed, taking into account circular economy principles for end of life management and 100% of their new Free Standing Stores will be designed and built following our sustainability principles.

Progress

Fighting Climate Change

  • Since 2005 L’Oréal has reduced the CO2 emissions of the plants and distribution centers by 78% in absolute terms compared to 2005, whilst production volume increased by 37% over the same period.
  • At the end of 2019, L’Oréal had 51 carbon neutral sites (meaning they use 100% renewable energy), including 14 factories.

Managing Water Sustainably

  • L’Oréal has reduced the amount of water used in its plants and distribution centers by 51% compared to 2005, per finished product.
  • Four of L’Oréal factories are “waterloop factories”, meaning that all the industrial water is retreated, recycled and reused in a loop.

Respecting Biodiversity

  • In 2019, 85% of new or renovated products had an improved environmental or social profile.
  • 100% of L’Oréal’s supply of palm oil, palm oil derivatives and palm kernel oil derivatives have been certified sustainable in line with RSPO criteria.
  • 100% of paper used for the instructions included with products is certified as sustainable.

Preserving Natural Resources

  • As of today, 59% of L’Oréal’s raw materials have been derived from renewable sources.
  • In 2019, the Group replaced virgin materials with 13,204 tons of recycled materials (PCR), an increase of 52% on 2018

Certificates

  • ISO 14289-1
  • ISO 50001
  • Cradle-to-Cradle Certified™ SILVER recognition
  • ISO 9001
  • OHSAS 18000

UN Sustainable Development Goals

UN SDGs Compliance

SDG 9

  • By 2020, 100% of the products developed by L’Oréal will have an environmental or social benefit. “Every time we invent or update a product, we will improve its environmental or social” the group says.

SDG 11

  • L’Oréal will provide consumers with detailed information on the environmental impacts of its products. A product assessment tool will evaluate the environmental and social profile of 100% of new products.

SDG 12

  • By 2020, [they] will reduce our environmental footprint by 60 % whilst bringing beauty to one billion new consumers,” L’Oréal claims. The group has set up ambitious targets for the reduction of CO2 emissions, water consumption and waste production. 

SDG 17

  • L’Oreal’s suppliers will be evaluated and selected on social and environmental performance. L’Oréal will help them to complete a self-assessment of their sustainability policy and will give them access to its training tools.

Secondary SDGs: 1, 3, 4, 5, 6, 7, 8, 10, 11, 13, 15

Evaluation

L’Oréal has made some progress towards sustainability. Specifically, they’ve been using more recycled materials and circular processing. However, they have not demonstrated any tangible improvement in recycling of the packaging. Packaging contributes to 57% of waste in the cosmetic industry.

Additionally, only 4 of 43 factories that L’Oréal has are waterloop factories.

Although they have aligned with a few of the UN 17 SDGs, they lack the innovation capabilities to minimize the impacts of their products to the earth and communities. Specifically, Palm-oil forests that are certified as sustainable are actually being destroyed faster than non-certified land.

L’Oréal has been rated a C.

Analyst Outlook: Negative

Because L’Oréal has issues when it comes to transparency and animal rights, L’Oréal is given a negative outlook.

Key Points

  • For a long time L’Oréal has been testing their products on animals and even though they have taken important steps to reduce their animal testing and have made research for alternative solutions, they’re still selling their products to China where animal testing is a requirement. 
  • L’Oréal’s policies on using toxic chemicals are very vague and the company is not transparent on that front. 
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