2025 Universal Registration Document

In the event of a suspected violation of its Forest Policy, L'Oréal addresses the issues with its Suppliers, in particular by sending them a list of mills potentially linked to cases of deforestation or unresolved alerts. The Group asks its Suppliers to engage these mills in the investigation and resolution of the cases concerned or, if this is impossible, to suspend their business relations with the mills.

More specifically with regard to Human Rights, L'Oréal worked with the NGO Dignity in Work for All on strengthening its risk identification in this value chain. As a result of this work, since 2022 L'Oréal has supported the ASD Respect In Palm programme, which promotes gender equality and measures to combat gender-based violence.

• Active involvement of Suppliers: L'Oréal assesses its palm Suppliers using the Sustainable Palm Index (SPI) – a measurement tool developed as part of the Group's work with the ASD. It is used to assess each Supplier's progress and compliance with Group requirements. It covers traceability, certification, Human Rights, deforestation and sector-based engagement. The SPI score is incorporated into annual Supplier assessments.
• Support for small independent producers: L'Oréal is committed to supporting independent smallhold producers connected to its value chain. For example, it is involved in five field projects run by NGOs in Indonesia and Malaysia, representing 31% of the Group’s supplies of palm derivatives. These projects are designed to support small-scale producers in adopting better farming practices, in particular the principles of regenerative agriculture, in order to improve their financial resilience, while reducing their negative environmental impact.
• Contributing to the transformation of the sector: L'Oréal participates in several sector coalitions, driven by its firm belief that collaborative action yields results. In line with this approach, in 2019, L'Oréal co-founded the ASD to collectively address the specific complexity of the palm derivatives market. Comprising 41 members, the ASD is committed to value chain transparency, risk analysis, supplier engagement and sector transformation.

L'Oréal’s roadmap for soy-based ingredients is similar to that for palm, with (i) a transparency campaign run via the same ASD coalition, and (ii) a field project supporting independent farmers in Brazil and Paraguay. The triple-certified (Fair for Life, Roundtable on Responsible Soy [RTRS] and organic) project has been verified by the NGO Imaflora, specialised in the fields of deforestation and human rights.

Regarding renewable raw materials not part of the palm or soy chain, which represent 21% of the portfolio of renewable raw materials in volume and 74% in number, L'Oréal has defined sustainable sourcing criteria incorporating environmental, social and economic indicators aligned with L’Oréal’s Human Rights, Forest and Sustainable Land Use policies. These criteria were defined using environmental, social and economic indicators from external databases.⁽¹⁾

L’Oréal has developed the Sustainable Characterization (SCAN) index, allowing the Group to prioritise the implementation of its sustainable purchasing action plans. The Group updates the information collected regularly.

L'Oréal aims to source all renewable raw materials from sustainable sources.

To achieve this, L'Oréal launched a support and training programme for more than 200 Suppliers on the issue of sustainable purchasing of raw materials in order to guarantee the traceability of the raw materials delivered to L'Oréal and ensure the associated sources are secure. Depending on the level of environmental and/or social risk identified on these streams, Suppliers are asked to apply the field audit procedure for producers (based on the criteria mentioned above). This procedure was developed by L'Oréal with the support of the Rainforest Alliance NGO and reviewed in 2019 by EcoCert, the Biodiversity Consultancy and the Danish Institute for Human Rights. Suppliers are also encouraged to demonstrate their sustainability practices in particular via sustainable purchasing certifications (Fair for Life, San Rainforest Alliance segregated model). With regard to biodiversity, of the 380 plant species that are the source of the renewable raw materials used by the Group, around 4% present significant challenges (endangered species, impact of production on natural environments) depending on their geographic origin and the method of extraction or production used. They are the subject of specific action plans set up with Suppliers and, if necessary, systematic support from independent external third parties to help manage the real impacts on the areas from which these ingredients are sourced.

For paper, cardboard and wood used in packaging, L'Oréal has implemented a sourcing approach as part of a process to transform its value chain. This roadmap aims to ensure transparency as regards the origin of wood and responsible sourcing.

The Group's requirements for the paper, cardboard and wood sourced for its packaging include:

• full traceability to mills and full traceability to the country of forest origin for virgin fibres, and to the country of collection for recycled fibres; and
• all of the materials delivered must be certified and covered by Chain of Custody certification for the site invoicing L'Oréal. Forest Stewardship Council (FSC) certification is preferred. 

To ensure the robustness of this approach, in 2023 L'Oréal launched a process to collect and verify certification and transparency data from its Suppliers, with the support of an external third party in charge of verifying the data reported by Suppliers and the validity of Chain of Custody certificates.

L'Oréal actively engages its packaging Suppliers, measuring their procurement performance using a Sustainable Timber Score (STS). The results of the assessment are incorporated into annual reviews to encourage continuous improvement.

When a risk is identified in the value chain, L'Oréal implements specific action plans, which are strictly monitored with the Suppliers concerned. Lastly, a whistleblowing mechanism exists to flag any concerns relating to the value chain and enable the rapid application of corrective action plans.

The Group also plays a role in transforming the sector. L'Oréal has been a member of the FSC since 2022 and is actively involved in developing standards. It is also a member of the TRASCE consortium, helping to strengthen traceability and accelerate the sustainable transition of the Beauty industry.