4.13.2 Responsible business conduct policies
True to its Sense of Purpose – “Create the beauty that moves the world” (see section 1.1.1) – and its stringent ethical principles, L'Oréal has developed a strong corporate culture. The Code of Ethics, presented below, formalises these principles and provides a framework for all the Group's activities to develop responsible business conduct.
4.13.2.1 Ethics policy
L'Oréal's development and reputation are underpinned by the essential ethical principles of integrity, respect, courage and transparency. Its ethics policy relies on two main pillars:
- The Code of Ethics, which applies to all employees, members of the Executive Committee and Management Committees and the Group's Directors and corporate officers, guiding them in identifying sensitive situations and appropriate behaviour, through clear rules and concrete examples. Compliance with these principles is taken into account in the assessment of each employee's performance, particularly managers. An ethical dimension is integrated into decision-making through regular dialogue with stakeholders and internal working groups, which reinforces the Group's policies. The Code of Ethics sets out L'Oréal's commitments as a company, an employer and a figure of responsibility.
- Speak Up: introduced in 2008, this internal whistleblowing system can be used by employees and external stakeholders to report concerns or breaches of Group rules in complete confidence, particularly in the areas of human rights, safety, corruption and the environment. Reports can be submitted via a secure, anonymous website, with around-the-clock access and available in 30 languages (www.lorealspeakup.com), or through the network of authorised persons, and are forwarded to the Chief Ethics, Risk and Internal Control Officer. L'Oréal protects whistleblowers, ensures that information remains confidential, and undertakes to conduct an independent and impartial investigation into each report, followed by remediation if necessary.
Governance of the Group's ethical principles is described in the Vigilance Plan in section 3.2.1.
4.13.2.2 Policy for responsible relationships with suppliers
L'Oréal places great store in an ethical and efficient value chain, putting sustainable and mutually beneficial relationships with its suppliers at the heart of its priorities. This policy is formalised in The Way We Work With Our Suppliers, which guides the actions of the Group and its employees. L'Oréal looks to:
- select its suppliers rigorously and fairly, using open and transparent competitive bidding based on objective criteria for assessing areas such as quality, price, innovation and performance in terms of social and environmental responsibility (see section 4.4.2.2 for further details on the supplier selection scorecard);
- nurture a climate of trust and collaboration, by encouraging regular communication, guaranteeing that information exchanged is kept confidential and prohibiting all forms of corruption or favouritism. Suppliers(1) sign the Mutual Ethical Commitment Letter, which sets out requirements in terms of respect for human rights, decent working conditions, environmental protection and business integrity; and
- see that financial commitments are met by paying all suppliers on time, regardless of the category of supplier and according to the agreed terms, pursuant to local legislation and the Group's contractual commitments.
4.13.3 Action plans in place
4.13.3.1 Implementation of the ethics policy
To support the implementation of its ethical principles, L'Oréal's action plan is built on four pillars:
- Raising awareness and training: L'Oréal has made training a central part of its strategy, with a comprehensive programme of compulsory online training for all employees, covering key issues such as ethics, human rights, anti-corruption, competition law, personal data protection and IT security. These training courses target around 60,000 people who are exposed to such risks, with specific modules for the populations at greatest risk. A dedicated training programme for managers is also underway. Each year, L'Oréal organises an Ethics Day to raise awareness and engage in open dialogue with all employees.
- Encouraging the reporting of unethical behaviour: through Speak Up, L'Oréal enables whistleblowers to confidentially report any concerns via a secure website (www.lorealspeakup.com). Employees are informed of the existence of the Speak Up programme, in particular through an e-learning course on ethics and human rights that is available and compulsory for all of the Group's new hires, as well as through awareness-raising initiatives such as Ethics Day. Whistleblowers are protected from retaliation and the reports are subject to thorough review, followed by an impartial internal investigation.
- Monitoring and preventing risks: L'Oréal takes a proactive approach to identifying and managing the risks associated with its operations. Rigorous internal control processes ensure compliance with the law and the Group's ethical standards.
- Auditing and ensuring compliance: the internal audit system ensures compliance with laws, regulations and Group policies, identifying weaknesses and determining any remedial measures to be taken.
