2025 Universal Registration Document

4. Sustainability Report

4.16 Issuance of a sustainability-linked bond

The Sustainability-Linked Bond (SLB) issued by the Group on 29 March 2022 fell due in 2025. This fixed-rate issue, which has a maturity of four years and three months and amounts to €1,250 million, is accompanied by a coupon of 0.875% per year. It is aligned with the Group's Sustainability-Linked Financing Framework, which covers all financial instruments with characteristics that are linked to the sustainability objectives.

The bond was established with reference to the 2020 SLB Principles as defined by the International Capital Market Association. The Group's Sustainability-Linked Financing Framework was independently assessed by Sustainalytics, an organisation that evaluates the sustainability of listed companies, which noted contributions to three of the United Nations Sustainable Development Goals.

Performance objectives	At 31 Dec. 2025		Status
KPI 1a: All L'Oréal operated sites will achieve 100% renewable energy (formerly known as “carbon neutral”) by 31 December 2025⁽¹⁾		96%	Not achieved
KPI 1b: Greenhouse gas emissions (Scopes 1, 2 & 3) on a “cradle-to-shelf” scope will be reduced by 14% per product sold by 2025 compared to the 2021 base year⁽²⁾	published -5%	comparable -10%	Not achieved
KPI 2: By 2025, 50% of the Group's plastic packaging will be recycled or biobased⁽³⁾		50%	Achieved

(1) Sites operated by the Group, excluding site safety and security equipment. A site must meet the following criteria: Direct CO₂ (Scope 1) = 0, with the specific exception of the gas used for catering, the fuel oil used for sprinkler tests, the fuel oil (or diesel) used temporarily by backup units, fossil energy consumed during maintenance of on-site renewable facilities and cooling gas leaks if they are lower than 130 tonnes CO₂ eq/year; and indirect market-based CO₂ (Scope 2) = 0.

(2) Excludes Aēsop brand products.

(3) This indicator covers primary, secondary and tertiary packaging. The performance of 50.14% has been rounded down to 50%.

Notes on methodology

KPI 1a: at 31 December 2025, L'Oréal confirmed that it had achieved the objective of its L'Oréal for the Future sustainability programme, with 100% of the sites operated by the Group (factories, distribution centres, research centres and administrative sites), as well as all free-standing stores, now using renewable energy. However, KPI 1a associated with the SLB bond issue includes an additional methodological requirement on Scopes 1 and 2. For a site to secure the “Achieved” classification under the terms of the Prospectus Regulation, fugitive emissions from refrigerant gases must not exceed a strict technical threshold of 130 tCO₂ e per year per site. Although the transition to renewable energies was completed for the entire scope in 2025, six sites recorded fugitive emissions in excess of this threshold of 130 tCO₂ e. As a result, and in line with the strict contractual methodology, KPI 1a is not considered to have been achieved for the 2025 financial year. This situation illustrates the Group’s high standards in terms of the criteria adopted, which combine a full energy transition (100% renewable energies achieved this year) with measured residual technical emissions. The Group continues to carry out preventive maintenance and to replace its air conditioning and industrial refrigeration systems with refrigerant gases that have a lower carbon impact.
KPI 1b published data: the Group has reduced its greenhouse gas emissions intensity by 5% compared with the baseline published in the terms and conditions of the prospectus.
For reference: KPI 1b comparable data: by way of comparison, the Group reported a 10.0% reduction in the intensity of its greenhouse gas emissions per product sold, relative to the restated 2021 baseline. This comparable figure was calculated based on detailed inventory data for 2019. 2019 is the official baseline for the Group's decarbonisation goals and represents the most robust and granular source of data allowing a consistent and comparable analysis of performance over the long term. This methodological adjustment ensures that the SLB measure is in line with the Group's climate reporting standards. This reduction was driven by the implementation of concrete decarbonisation measures, in particular product environmental design (selection of raw materials with less impact, more circular packaging), the widespread use of renewable energies at our sites and the increased use of logistics solutions with lower carbon emissions. Despite this genuine progress towards net zero, the Group missed its 14% reduction target. This is mainly due to changes in the product mix and the pace at which reduction levers were put in place by certain suppliers and logistics service providers.
KPI 2: the objective to source 50% of all plastics used in product packaging either from recycled or biobased sources has been achieved, with a consolidated percentage of 50.14% at 31 December 2025. It should be noted that this KPI focuses exclusively on plastic materials and includes all primary, secondary and tertiary packaging (transport equipment). It should be noted that this methodology differs from that of the "L'Oréal for the Future" programme, whose overall targets for packaging do not include tertiary packaging but cover all materials (plastics, glass, cardboard, etc.) used in primary and secondary packaging.