To meet its target for reducing Scopes 1 & 2 emissions by 2030, L'Oréal has made commitments regarding the transition to renewable energies. In 2025, L’Oréal took a historic step in achieving 100% renewable energy on operated sites and stores(1). The Group’s efforts will continue under its L'Oréal for the Future programme so as to maintain this performance. This ambition is important because Scopes 1 & 2 concern, respectively, direct emissions linked to the Group's activities, such as on-site combustion, and indirect emissions linked to the consumption of purchased energy, such as electricity. By using renewable energy sources such as wind power and solar energy to power its facilities, L'Oréal is reducing its dependence on fossil fuels, thereby limiting its carbon footprint.
To meet its target for reducing Scope 3 emissions, which account for the majority of its carbon footprint, L'Oréal has set out trajectories adapted to the transformation of each of its functions and business lines, and planned how to roll them out in collaboration with all the Divisions and Regions. Reducing Scope 3 emissions includes indirect emissions linked to the company's entire value chain, upstream and downstream of its direct operations. This includes emissions linked to the purchase of raw materials, the transportation of goods, the use of products sold, the end-of-life of these products and business travel.
Funding the transition plan
L’Oréal believes that its ambitious decarbonisation pathway and the actions required to achieve it are solidly underpinned by the availability and allocation of internal financial resources until 2030. At the same time, climate objectives also depend on important external factors, in particular the development of decarbonisation technologies, suppliers’ success in reducing their own emissions, and a regulatory and political context that remains supportive of the energy transition.
The Group’s strategy is supported by the consideration of climate impacts costs and benefits into its standard operational and budgetary processes. A Group management standard ensures that each entity integrates sustainability factors (including decarbonisation efforts) directly into its financial planning process.
Consequently, the Group does not manage an isolated "transition budget," as these investments are inseparable from "business as usual" operations. While certain specific expenditures can be identified as purely transition-related, they represent a non-significant amount on a Group scale. This high level of integration allows the Group to drive its transformation efficiently within its existing financial framework, while making it difficult to isolate "sustainability-only" costs.
The effectiveness of this model is evidenced by the Group’s outcomes. For example, L'Oréal has succeeded in reducing its use of virgin plastic by 50% over the last five years without compromising its financial results. Transformations of this nature involve complex shifts in sourcing and industrial processes where the "climate" investment is inextricably linked to product innovation and quality.
Given the highly integrated nature of these processes, isolating specific financial figures would result in only a partial view that does not represent the actual scale of the resources and means deployed across the organization to achieve its climate ambitions. As these investments are fundamentally embedded across all operating activities to ensure maximum efficiency and strategic alignment, L’Oréal does not report the financial resources for the climate transition plan as a separate, isolated disclosure.
3.6.5 Effective application and compliance with the Plan 
The Plan includes effective application measures intended to ensure that the Applicable Rules are properly implemented by Subsidiaries and Suppliers. Monitoring of compliance with the Plan is carried out through audits and analyses performed by external service providers or by Group teams. Subsidiaries and Suppliers are also asked to carry out self-assessments.
3.6.5.1 Effective application of the Plan
Adoption of Applicable Rules
(i) Adoption of the Applicable Rules by the Subsidiaries
The Applicable Rules are included in the Group's Internal Rules to ensure they are effectively implemented by Subsidiaries. For this purpose, compliance with the effective application of the Plan is based on control activities in accordance with the applicable legislation. The communication of Applicable Rules to Group employees is described below. Social audits are conducted at the Group Subsidiaries' industrial sites by a third-party company for the purpose of verifying that the Applicable Rules are implemented correctly.
(ii) Adoption of the Applicable Rules by Suppliers
Suppliers undertake to comply with the Applicable Rules. The principal Suppliers sign the Mutual Ethical Commitment Letter (MECL), which covers these Applicable Rules. Moreover, the Suppliers likely to present the most significant risks because of their activity or geographic location may be audited on these issues in accordance with the risk matrix. The contents of the audit are set out in the MECL.
Governance
L'Oréal's commitment to Human Rights and Fundamental Freedoms, the Health and Safety of people in the workplace and the Environment is supported at the highest level of the Company by its Chief Executive Officer, who renews L'Oréal's commitment to the United Nations Global Compact each year. These commitments are also set out in the Group's Code of Ethics and Human Rights and Employee Human Rights policies. In 2025, the Group updated its Human Rights Policy so that it better responds to the salient risks and provides greater clarity on the Group's programmes and policies in this regard.