2022 Universal Registration Document

Chapter 2 : Corporate governance

2.3.4. The involvement of the Board and its Committees in sustainability issues

Strategy and Sustainability Committee
  • Reviews the Group’s strategic orientations.
  • Reviews the strategic projects and their economic, financial, societal and environmental consequences.
  • Reviews the sustainable development commitments and regularly reviews CSR issues.
2022 main activities
  • Review of the Group’s strategic development prospects
  • Automatic review at each meeting of the latest CSR initiatives:
  • the L’Oréal Fund for Nature Regeneration,
  • Creation of the Circular Innovation Fund,
  • Achievement of “carbon neutral” status(1) for scopes 1 & 2 by some sites,
  • Foundation of the EcoBeautyScore Consortium,
  • Living wage policy,
  • “One D/Way for the future” event held for the first time, to disseminate best practices and enhance employee engagement,
  • Refillable packaging initiative,
  • Digital sobriety plan.
Audit Committee
  • Carries out the process for preparation of non-financial information and, where applicable, makes recommendations to guarantee the integrity thereof.
  • Monitors the efficiency of the internal control and risk management systems.
2022 main activities
  • Review of changes in the regulations on non-financial reporting (CSRD) and draft standardisation (EFRAG, ISSB & SEC)
  • Salient human rights risks
  • Examination of climate risks in 2022
  • Examination of the draft double materiality matrix.
Human Resources and Remuneration Committee
  • Makes proposals on the remuneration of corporate officers, including the non-financial targets of variable remuneration.
  • Reviews the Human Resources policy and the rules of ethical conduct.
2022 main activities
  • Analysis of the Chief Executive Officer’s financial and non-financial performance
  • Review of the Human Resources policy including the Group’s Diversity, Equity and Inclusion policy
  • Review of the project to incorporate environmental and diversity criteria into long-term incentive (LTI) plans.
Nominations and Governance Committee
  • Discusses governance issues related to the functioning and organisation of the Board, particularly the Board’s diversity policy.
2022 main activities
  • Reflection on the composition of the Board (diversity, complementary profiles, expertise, gender balance)
  • Identification of CSR expertise as part of updating the skills matrix for Directors
  • Review of the activity of the Values Committee
  • Regulatory changes expected at European level (EFRAG, Duty of Vigilance, Women on Boards Directive etc.) and the AMF’s 2022 report on CSR.
Board of Directors
  • Defines the strategic orientations, factors social and environmental issues into its decisions, reviews the Group’s CSR policy every year and possesses a report from each S&S Committee meeting on the L’Oréal for the Future programme.
2022 main activities
  • Automatic reporting on the work carried out by its four committees
  • Updating of the strategic orientations, taking social and environmental challenges into consideration
  • Review of the risk mapping update, taking sustainability risks into consideration
  • Review of the status of the L’Oréal for the Future sustainability programme by the Chief Corporate Responsibility Officer.
  • Presentation of the members of the Executive Committee, systematically taking into account the CSR challenges facing their business: Chief Human Relations Officer, President – North Asia Zone & Chief Executive Officer L’Oréal China, Chief Digital and Marketing Officer, Chief Operations Officer, Deputy Chief Executive Officer, in charge of Research, Innovation and Technology
  • Update on the Group’s ethics policy
  • Update on how the sense of purpose (raison d’être) is being fulfilled
  • CSR training for Board members by internal and external experts on:
    • Acceleration of climate change
    • Sustainability reporting: European standards
    • The environmental impact of digital technology
    • L’Oréal’s sustainable development, Beauty Tech and IT roadmap

(1) A site can claim “carbon neutral” status if it meets the following requirements:

  • Direct CO2 (Scope 1) = 0, with the exception of: the gas used for catering, the fuel oil used for sprinkler tests, fossil energy consumptions during maintenance of on-site renewable facilities, cooling gas leaks if they are lower than 130 tonnes CO2eq./year; and
  • Indirect, CO2 Market Based (Scope 2) = 0. The renewable energy sources must be located on site or less than 500 kilometres from the site, and be connected to the same distribution network. The “carbon neutral” status, as defined above, is achieved without carbon offsetting. See section 4.3.1.1.3. B/.