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, in 2025, L'Oréal has succeeded in reducing its use of virgin plastic by 37% compared to 2019 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.
L'Oréal is anticipating the risks posed by climate change to its supply of plant-based raw materials. To ensure the long-term future of its business activities, the Group has put in place an adaptation strategy based on scientific knowledge and risk analysis. The Research & Innovation, Operations and Corporate Social Responsibility teams assess the impact of climate change on the entire value chain in order to anticipate the corresponding risks, particularly as regards the supply of raw materials. L'Oréal is seeking to diversify its sources as swiftly as possible, not just when there are material threats, and to adapt production areas, seek alternatives and work with partners to develop more sustainable farming practices within the overall goal of building a resilient supply chain while guaranteeing product quality.
L'Oréal works proactively to protect its sites against extreme weather events. Its approach comprises three key stages: (i) analysis of climate scenarios, (ii) incorporation of results into site risk reviews and (iii) implementation of tailored adaptation plans, supplemented by targeted audits of infrastructure resilience if necessary. Using this approach, the Group is able to anticipate climate challenges while ensuring business continuity.
With natural resources such as water becoming increasingly scarce, L’Oréal aims to offer water-saving products and technologies to enable consumers in water-stressed markets to meet their hygiene and beauty needs. In order to achieve this goal, the Group is innovating with formulas that use less water or that do not require rinsing. L'Oréal is also investing in innovations such as the L'Oréal Water Saver showerhead, which reduces water consumption in hairdressing salons. L'Oréal's measures covering its downstream value chain aims to offer products that meet environmental challenges and consumer expectations in terms of sustainability.
