2025 Universal Registration Document

4.14 Methodological notes

4.14.1 Scope of consolidation⁽¹⁾

As a general rule, the reporting scope of the Sustainability Report is based on that of the financial statements, subject to specific exceptions described below:

• newly acquired companies are included in the reporting scope as soon as they have been consolidated;
• companies accounted for by the equity method are not included in the reporting scope;
• exceptionally, small entities may be excluded from the aforementioned reporting scope if, taken together, they do not represent more than 5% of the Group's sales or total employees. Specific exclusions are described in following section.

L'Oréal reports sustainability data at Group level for all entities over which it has operational control, for applicable ESRS (E1 and E2).

Gradual consolidation of newly acquired companies

Until an entity has been fully integrated into L'Oréal's IT systems, consolidation of its data is done manually and can therefore take longer. For these entities, if the rules on estimates cannot be applied and the cost of reporting is deemed unreasonable in relation to the size of the company, the entity may ask to be exempted from non-financial reporting. This exemption may be granted on a case-by-case basis and be renewed annually. The table below provides details on the exclusion of four entities. The entities concerned by exemptions vary according to the metric categories. Action plans are implemented to ensure data availability and reliability.