2025 Universal Registration Document

4. Sustainability Report

Recycling and reusing water with the Waterloop concept

Using water reuse and recycling techniques, Waterloop aims to limit the amount of water withdrawal for industrial purposes at L'Oréal's production sites. In practical terms, mains water is only used for human consumption and manufacturing cosmetic products, while industrial needs, such as cleaning or steam production, use water treated directly on site. This system is based on two essential pillars:

  1. process optimisation: reducing the volume of water used in production processes; and
  2. reuse and recycling: wastewater treatment using advanced technologies such as ultrafiltration and reverse osmosis, to obtain high-quality water that can be reused in industrial processes.

Launched in 2017, Waterloop is operational at a number of the Group's production facilities, with a gradual roll-out based on the order of priority determined by regional water stress levels.

The EHS policy also covers treatment of industrial effluents and is aimed at reducing the environmental impact of the water leaving the sites (see section 4.3).

4.4.2.2 Sustainable purchasing policy

Sustainability is deeply rooted in the values and choices of L'Oréal's Purchasing Department. Supporting its ecosystem throughout the value chain is fundamental for L'Oréal in its efforts to meet today's environmental and social challenges. With the aim of moving towards a more sustainable beauty industry alongside its suppliers, L'Oréal applies a Sustainable Purchasing Policy framework to both production and service purchases. The policy is set by the Group's sustainable purchasing team in agreement with internal stakeholders (the Ethics, Corporate Social Responsibility and Operations Departments). It is applied by L'Oréal's buyers in the various purchasing areas and Regions with the aim of forging responsible and transparent relationships with all suppliers and limiting environmental and social impacts in line with L'Oréal's policies.

The policy is built around four pillars. These are in turn part of L'Oréal's Mutual Ethical Commitment Letter, which formalises the joint commitment that L'Oréal has with its suppliers:

  1. respect for human rights: L'Oréal requires its suppliers to respect human rights in accordance with international labour standards. In particular, L'Oréal's suppliers are required to guarantee decent and safe working conditions, prohibiting all forms of forced labour, child labour and discrimination. In line with the L'Oréal for the Future programme, L'Oréal aims to have 100% of strategic suppliers sign a living wage pledge with a time-bound action plan (see section 4.9);
  2. preservation of the environment and natural resources: L'Oréal aims to minimise the environmental impact of its supply chain and services:
    • by reducing its carbon footprint: the Group works with its suppliers to reduce greenhouse gas emissions in the value chain (see section 4.2),
    • by requiring its strategic suppliers to commit to sustainable water management practices: L'Oréal aims to have all strategic suppliers commit to sustainable water resource use, using the CDP Water score achieved by strategic suppliers to check alignment with this indicator. This applies to strategic suppliers whose activities have a high potential impact on water resources (see section 4.4.3.2),
    • preserving resources and biodiversity. L'Oréal strives to source raw materials that are traceable and sustainable (see section 4.5);
  3. business integrity: L'Oréal demands the highest integrity from its suppliers. L'Oréal's business relationships are based on transparency and respect for ethical standards and anti-corruption laws. The Group's buyers receive training in this regard. These principles are also enshrined in L'Oréal's Code of Ethics and reflected in its supplier selection process (see section 4.13);
  4. diversity, equity and inclusion: firm in its belief in creating a diverse and inclusive working environment, both within the Group and across the supply chain, L'Oréal encourages diversity, fairness and inclusion among its suppliers. L'Oréal encourages them to adopt responsible practices and supports them in developing inclusive purchasing programmes (see section 4.9).

Governance over this policy is integrated into L'Oréal's purchasing processes, based on measurable objectives that are in line with the Group's environmental, social and economic ambitions. Reporting to the Chief Operations Officer, the sustainable purchasing team defines the relevant action plans in conjunction with the managers of each purchasing field and Region, as well as with internal and external stakeholders.

Key indicators are monitored and shared at least once a year at Group level, in particular through management committee meetings dedicated to ESG measures. Regular monitoring is rounded out by internal and external audits of L'Oréal's processes and quantitative indicators, which guarantee the system's robustness.

In terms of the practical application of these ambitions, L'Oréal has set up a supplier evaluation system based on five criteria: quality, social and environmental responsibility, innovation, services, and competitiveness. These criteria define the performance expected of suppliers, with a 20% weighting on environmental and social criteria.

L’Oréal actively engages with its suppliers in order to accelerate the transformation of sustainability practices and anticipate regulatory challenges, providing training via events, webinars and sharing best practices on digital platforms such as Spread the Best Practices. The Group also organises events, including the international Spread the Green Vibes programme launched in 2019, and themed supplier days that are adapted locally. For example, in June 2025, the second global edition of Spread the Green Vibes brought together more than 80 strategic suppliers and 15 partners, with regional breakouts and sessions organised by purchasing category.