As part of a continuous improvement approach, the Plan is regularly reviewed by the Ethics, Risk and Compliance Department, the Operations Department (Environmental, Health and Safety and Purchasing), the Human Relations Department, the Corporate Social Responsibility Department and the Legal Department. Each of these representatives leads a local network (Ethics Correspondents, Environmental, Health and Safety, Purchasing, and Human Relations teams, managers from Internal Control, and Sustainability Leaders) around the world, making it possible to take into account feedback from the field when improving the Plan.
The Vigilance Plan was presented to internal stakeholders (such as the employee representatives in the context of the European Works Council (Instance Européenne de Dialogue Social) and qualified outside stakeholders (NGOs and members of civil society). The Audit Committee and the Board of Directors are informed each year of the update to the Plan’s content. As part of the preparation for the European Corporate Sustainability Reporting Directive (CSRD), the Group conducted double materiality analysis assessments of the main sustainability-related risks, impacts and opportunities. These studies were an opportunity for the Group to continue its dialogue with experts and stakeholders on the potential impacts of its business activity, specifically on the environment and Human Rights (see section 4.1.3).
The risks of serious impacts on Human Rights, the environment, health and safety have been analysed on the basis of the business of L’Oréal, its Subsidiaries and its Suppliers. The risk analysis was used, first, in the definition of the Applicable Rules (defined hereafter) and, second, to the measures for effective application and monitoring of these Rules.
L’Oréal’s activity consists of producing cosmetic products and distributing these products to the Group’s clients.
L’Oréal manufactures the vast majority of the finished products that it sells in its own factories, and is mainly present in major growth markets. Its network of 36 factories is equipped with the very latest technologies and advances in automation and adapts constantly, and with agility, to incorporate acquisitions and embrace external innovations.
This network is rounded out by production subcontracting, mainly to meet temporary demand peaks for specific technologies (make-up pencils, soaps, etc.). L’Oréal’s contracts prohibit cascade subcontracting. Subcontractors, who need to subcontract a portion of their L’Oréal production to meet manufacturing constraints must first obtain consent from L'Oréal. When, in certain cases, the subcontractor is authorised to subcontract a portion of its production, the same rules as those defined in this Plan are applied to the subcontractors of the subcontractors. The same types of controls and sanctions are in place in the event of breaches in compliance.
To meet their production needs, L’Oréal’s factories purchase various raw materials, packaging components and equipment from third-party suppliers. These suppliers have specific expertise, develop their products and have the infrastructure necessary to produce them. They act with complete independence from L’Oréal, without depending on L’Oréal’s instructions or expertise.
The manufacture of packaging components is not part of L’Oréal’s activity. The packaging components used are purchased from companies specialising in this area. The same is true for production equipment.
Products are distributed by the Subsidiaries and independent third-party distributors in the countries or regions where the Subsidiaries are not present. In order to ensure this distribution, warehouses are operated by the Subsidiaries directly, or these services are entrusted to third-party logistics service providers that render services on the same type of activity: storage and preparation of orders in warehouses that they lease or own.
