2024 universal registration document

3.5.4 Applicable Rules resulting from the risk analysis

The Subsidiaries and Suppliers must comply with the applicable local legislation and the minimum common core of the rules listed below (the "Applicable Rules") in order to prevent the risk of serious adverse impacts on Human Rights and Fundamental Freedoms, health and safety of people and the environment. When local laws and/or the internal rules of Subsidiaries and Suppliers provide more stringent standards than the Applicable Rules, such standards must take precedence. If, however, the Applicable Rules provide for stricter standards, the Applicable Rules take precedence unless they result in an unlawful activity. In the event of a contradiction between local laws and internationally recognised Human Rights, L’Oréal works to comply with these international standards.

3.5.4.1 Risks and Applicable Rules for the prevention of serious violations of Human Rights and Fundamental Freedoms CSRD

Risk Analysis and risks identified relating to Human Rights and Fundamental Freedoms

The Group expanded its risk mapping by identifying the potential key Human Rights risks worldwide and in all markets⁽¹⁾. L’Oréal referred to the reporting framework of the Guiding Principles on Business and Human Rights (UNGP Reporting Framework). This identification process takes into consideration the severity, scale, remediability and likelihood of its impacts for people throughout its value chain. This study was conducted with an NGO specialised in the area, providing an independent analysis, and was reviewed by different external stakeholders. As a result of this analysis, the following salient risks were identified in the context of the application of the French Law on Duty of Vigilance:

• child labour among the employees of the Group’s Suppliers;
• forced labour among the employees of the Group’s Suppliers;
• job discrimination because of gender, gender identity, age, disability and sexual orientation of the employees of L’Oréal and the employees of the Group’s Suppliers;
• a lack of adequate wages⁽²⁾ for the employees of the Group’s Suppliers; and
• a lack of a whistleblowing system for social dialogue, freedom of association and collective bargaining among the employees of the Group’s Suppliers.

Other potential risks identified concern respect for the environment, the right to access water, consideration of Human Rights in the choice of raw materials and, in particular, respect for free, prior and informed consent of indigenous peoples and local communities.

Applicable Rules on Human Rights

Subsidiaries and Suppliers must comply with the minimum core rules, which consist of the following rules that result from an analysis of the risks related to the business activities of the Group and its Suppliers.

Non-discrimination: Acts of discrimination are serious violations of Human Rights that remain anchored in all regions of the world in which L’Oréal is present. Discrimination related to gender, sexual orientation and gender identity, disabilities, family situation, age, political and philosophical opinions, religious beliefs, union activities, or related to ethnic, social, cultural or national origins or pregnancy are prohibited. L’Oréal bans pregnancy testing when employees are hired within the Group, and requires its Suppliers to comply with this standard.

Bullying and sexual harassment: Bullying and sexual harassment are prohibited in the Group.

Child labour: L’Oréal’s presence in certain regions of the world that are particularly at risk for child labour, including Asia and Latin America, has led the Group to identify this issue as a priority. To take into consideration the vulnerability of young workers, L’Oréal has set the minimum hiring age at 16 years old. L’Oréal prohibits night work and work hazardous to health and safety for employees younger than 18 in its Subsidiaries.

Forced or compulsory labour: L’Oréal refers to the definition of forced labour set out in Convention 29 of the International Labour Organization: “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. In certain regions of the world where L’Oréal operates, certain practices that violate internationally recognised Human Rights, such as holding the identity papers of migrant workers, are common. Any form of forced labour is prohibited. As a result:

• unless there is a legal obligation, employees’ identity papers, passports or any other personal documents may not be held from them. In the event of a legal obligation, these documents must be returned to employees at their first request;
• employees may not be asked to pay for recruitment costs or to make cash deposits to obtain employment;
• if workers from foreign regions are hired, the employer must pay the costs related to these hires;
• the use of prison labour is possible only when it is voluntary within the scope of a professional reinsertion programme, and paid at the market rate. Suppliers must request authorisation from L’Oréal before they use this type of labour;
• security personnel must only ensure the safety of people and property; and
• any salary withholding must be strictly authorised by law. It may not under any circumstances be used for the purpose of confiscation, for the direct or indirect benefit of the employer.

Employees must have access to drinking water and toilet facilities. They must be free to move around their place of work, with the exception of areas to which access is restricted for confidentiality or safety reasons.

Working hours: Working hours, including overtime, may not exceed 60 hours a week for employees whose working time is monitored. All employees must also be granted at least one day of rest for every seven-day period, or two consecutive days of rest for every fourteen-day period. They must have reasonable breaks when they work.