2024 universal registration document

3. Risk factors and management

3.5.7.2 Results of the application of the Plan to Subsidiaries
Adoption of the Applicable Rules by the Subsidiaries

The Applicable Rules are incorporated into the Group’s Subsidiaries’ internal rules. Employees learn through an online training programme on Ethics. At the end of 2024, 83% of the relevant employees had completed this training programme.

All EHS managers and everyone working in a factory or distribution centre are trained in the Applicable Rules on EHS. All new employees are trained in the Rules on EHS, regardless of their work location.

Monitoring and control system in respect of Human Rights

A total of 30 Group factories and distribution centres worldwide have been audited on their compliance with the Group’s Human Rights Rules, apart from on compliance with health and safety rules, which is subject to specific separate audits.

The compliance audit results in relation to L’Oréal’s own workforce are as follows:

  1. child labour: the audits did not reveal any cases of non-compliance;
  2. forced labour:the audits did not reveal any cases of non-compliance;
  3. freedom of association: the audits did not reveal any cases of non-compliance;
  4. non-discrimination: the audits did not reveal any cases of non-compliance;
  5. working hours: (a) the audits revealed that overtime was sometimes imposed on employees at two separate sites, in compliance with local legislation; (b) two audits revealed that two employees had exceeded the overtime limit provided for in the Employee Human Rights Policy, by two and four hours respectively. Action plans have been drawn up to ensure that overtime is voluntary and that the limits on working hours set out in the Employee Human Rights Policy are respected. Control audits on the implementation of these action plans will be performed in 2025;
  6. wages and charges: the audits did not reveal any cases of non-compliance;
  7. sexual harassment and bullying: the audits did not reveal any cases of non-compliance;
  8. disciplinary practices: an audit revealed that one site's internal disciplinary rules had not been certified by the competent administrative authority, which is mandatory under local law. A plan was drawn up to remedy this situation within four months, and a control audit will be performed at the end of that period.

For employees of external companies (temporary work agencies and subcontractors), at one of the audited sites it was not possible to verify compliance with the Applicable Rules on wages and working hours as the payroll documents for the external workers concerned were not available at the site. A remediation plan is currently being drawn up.

Monitoring and control system for EHS issues

In 2024, 91 "Top managers" (managers of factories or distribution centres, Management Committee members, etc.) attended the Leadership & Safety Culture seminar, held at the CEDEP, The European Centre for Executive Development, at the INSEAD campus in France. The seminar aims to raise awareness with top managers about safety issues, increase their leadership ability and see these behaviours adopted and maintained over the long term.

A total of 35 factories are certified ISO 45001, representing 97% of the Group’s factories.

In 2024, the following EHS audits were conducted:

  • 20 risk audits;
  • 16 combined EHS culture and risk audits;
  • 8 combined Quality, Environment, Health, Safety and Performance audits; and
  • 110 additional EHS audits of subcontracting sites in factories, and in external distribution centres.

The most frequently identified risks during EHS risk audits are related to fire protection, procedure safety, hazardous energy, containment of fire water runoff and wastewater management. Failures to comply and formal notice were systematically subject to corrective measures.

In 2024, failures to comply with regulations were found at twelve factories with regard to the quality of their wastewater. One facility was fined a total of USD 2,250 for failing to comply. In addition, one factory received a neighbourhood complaint that did not result in a fine.

3.5.7.3 Results of the application of the Plan to Suppliers
Adoption of the Applicable Rules by Suppliers

Since 2002, the Group's Suppliers have had to sign the Mutual Ethical Commitment Letter (MECL). This document, reviewed in 2021, sets out the requirements and commitments that L'Oréal imposes on its suppliers according to the Group's programmes and policies concerning ethics, corporate responsibility, Human Rights, working conditions and compliance. The MECL has been relayed to all Suppliers worldwide, and 95% of eligible Suppliers(1), including strategic suppliers, have contractually undertaken to respect the obligations it contains.

In addition to the MECL, L'Oréal requires its Suppliers who provide outsourced labour to sign the "External Workforce Agency Standards". This document reinforces their commitment to the protection of human rights, in particular with regard to the prohibition of forced labour and access to a whistleblowing system.

In 2024, 63 newly recruited purchasers in the Group completed an in-depth training programme on responsible purchasing.