L’Oréal is built on strong Ethical Principles that guide its development: Integrity, Respect, Courage and Transparency. These Principles form the foundation of its policies on sustainability, corporate social responsibility, and corporate philanthropy. L'Oréal promotes respect for all internationally recognised Human Rights and Fundamental Freedoms.
In line with the United Nations Guiding Principles on Business and Human Rights, L'Oréal's particular points of reference are the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights, and the Fundamental Conventions of the International Labour Organization.
L'Oréal's Vigilance Plan (the "Plan") meets the obligations of the French law of 27 March 2017 on the duty of vigilance for French parent companies and order-giver companies. It contains reasonable due diligence measures intended to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms and Health, Safety and the Environment within the framework of a best efforts obligation. It applies to L'Oréal, the parent company of the Group, and to the subsidiaries controlled directly or indirectly by L'Oréal (the "Subsidiaries"), as defined by Article L. 233-16 of the French Commercial Code, and to suppliers and subcontractors with which the companies of the Group have a "permanent commercial relationship", i.e., a direct, ongoing and stable commercial relationship based on the definition in French case law (the "Suppliers"), depending on the risk level as identified in the Plan. It is understood that in its own activities, L'Oréal complies with the rules and procedures contained in the Plan, even when L'Oréal is not expressly mentioned therein. The Plan contains the rules applied to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, the Health and Safety of people and the Environment resulting from the activities of L'Oréal, its Subsidiaries and Suppliers (see section 3.6.4). It also includes reasonable measures for the effective application of these rules by L'Oréal and its Subsidiaries and Suppliers as well as regular assessment procedures to evaluate their compliance (see section 3.6.5). It provides a whistleblowing and reporting system (see section 3.6.6) and presents a report on the plan's implementation (see section 3.6.7). The actions to support, encourage and prevent the risk of serious adverse impacts on Human Rights, Fundamental Freedoms, Health, Safety and the Environment contained in the Plan constitute reasonable efforts to be implemented by Suppliers and Subsidiaries. Given the diversity of the businesses of the Subsidiaries and Suppliers, the Plan contains common measures for them.
In addition to these common measures, L'Oréal and its Subsidiaries voluntarily conduct additional actions on these same issues. These initiatives are described in other chapters, in particular chapter 4. Suppliers voluntarily conduct additional actions on these issues and L'Oréal encourages them to do so.
As part of a continuous improvement process, the Plan is regularly reviewed by the Ethics, Risk and Internal Control Department, the Operations Department (Environmental, Health and Safety and Purchasing), the Human Relations Department, the Corporate Social Responsibility Department and the Legal & Compliance Department. Each of these representatives leads a local network (Ethics and Human Rights Correspondents, Environmental, Health and Safety, Purchasing, and Human Relations teams, managers from Internal Control, and Sustainability Leaders) around the world, making it possible to take into account feedback from the field when improving the Plan.
L’Oréal regularly consults with internal stakeholders, such as the employee representatives in the context of the European Works Council (Instance Européenne de Dialogue Social) and qualified outside stakeholders (NGOs and members of civil society). The Audit Committee and the Board of Directors are informed each year of the update to the Plan's content.
The risks of serious adverse impacts on Human Rights and Health, Safety and the Environment have been analysed on the basis of the business of L'Oréal, its Subsidiaries and its Suppliers. The risk analysis was used, first, in the definition of the Applicable Rules (defined hereafter) and, second, to the measures for effective application and monitoring of these Rules.
L'Oréal's activity consists of producing cosmetic products and distributing these products to the Group's clients.
L'Oréal manufactures the vast majority of the finished products that it sells in its own factories, and is mainly present in major growth markets. Its network of 37 factories is equipped with the very latest technologies and advances in automation and adapts constantly, and with agility, to incorporate acquisitions and embrace external innovations.
This network is rounded out by production subcontracting, mainly to meet temporary demand peaks for specific technologies (make-up pencils, soaps, etc.). L'Oréal's contracts prohibit cascade subcontracting. Subcontractors, who need to subcontract a portion of their L'Oréal production to meet manufacturing constraints must first obtain consent from L'Oréal. When, in certain cases, the subcontractor is authorised to subcontract a portion of its production, the same contractual rules are applied to the subcontractors of the subcontractors.
