2025 Universal Registration Document

A potential lack of respect for human rights in the value chain could have negative impacts – for example, breaching the right to education in the case of child labour, inadequate wages and a lack of job security for workers.

L'Oréal may have a potential impact by indirectly contributing to the violation of the human rights of indigenous populations affected by its activities or those of its suppliers. There is a risk that the free, prior and informed consent of indigenous communities is not respected in the supply chain due to potential impacts of deforestation and use of land adjacent to these communities, such as for palm oil and palm oil derivatives.

Maintaining or accentuating discrimination or unconscious bias could impact the fundamental right to non-discrimination, and may have negative consequences for morale, motivation and retention of employees in the value chain. This may apply in particular to beauty advisors, retail employees, customer-facing roles in the downstream value chain and more specifically in the stores or point-of-sales outlets distributing the Group's products, workers in the value chain, suppliers'subcontractors, distribution workers and temporary workers in the upstream or downstream value chain and more specifically on Group sites or when performing an activity on behalf of the Group, as well as workers who may be particularly vulnerable to adverse impacts due to their intrinsic characteristics or a specific context, such as trade unionists, migrant workers, home workers, women and young workers⁽¹⁾

By promoting adequate wages at its strategic suppliers, L'Oréal could contribute to improving the quality of life, financial security and well-being of workers and their families. This could also help reduce poverty, improve working conditions and strengthen social dialogue. This high-impact action, focused initially on strategic suppliers, could transform the value chain in a positive way in the long term.

Financial risks include the possibility of major disruptions in the value chain, particularly the supply chain, if suppliers fail to respect human rights. Legal proceedings, import bans or the discovery of unethical practices could force L'Oréal to seek new suppliers as a matter of urgency, resulting in additional costs and significant delays. While investing in responsible practices such as the effective implementation of due care or adequate wages may be costly in the near term, it reduces the risk of major and expensive supply chain disruptions in the long term.