2024 universal registration document

4. Sustainability Report

4.4.3.2 Working with suppliers to use water responsibly

Sustainable water management is essential to L'Oréal's supply chain organisation. In an era of growing global water constraints, L'Oréal wants to support its suppliers in implementing responsible practices. Its action plan is built on three pillars:

  • Mapping and assessing water risks: L'Oréal is working toidentify the risks and dependencies linked to water in its supply chains. Using this analysis, the Group is aiming to anticipate risks to water resources, and to set up projects to preserve and restore ecosystems and watersheds where the most critical situations are identified.
  • Sustainable water management by strategic suppliers: As part of the L'Oréal for the Future programme, L'Oréal works together with its strategic suppliers to promote responsible water stewardship in the areas where they operate. This commitment involves monitoring suppliers'environmental performance in terms of water management (in particular through their scores on the CDP Water questionnaire). L'Oréal encourages suppliers to continuously improve their performance and to adopt ambitious measures to reduce their water consumption, optimise their use of resources and mitigate the impacts and risks associated with their activities. It also requires respect for fundamental human rights linked to access to water, sanitation and hygiene, as stipulated in the Mutual Ethical Commitment Letter (MECL) that all strategic suppliers must sign.
  • Strategies for optimising water use: L'Oréal encourages its suppliers to adopt water-saving practices, such as efficient irrigation, recycling and continuous monitoring of water consumption, with the aim of maximising water efficiency and reducing pollution.
4.4.3.3 Reducing the water footprint in product use

For several years, L'Oréal performed life cycle analysis of its products in order to identify, evaluate and improve its environmental footprint. At L'Oréal, SPOT (see chart hereafter) is an integral part of product launch processes, putting sustainable innovation at the very heart of product development. L'Oréal uses eco-design techniques to improve the water footprint associated with the use of its products, based on three pillars:

  • innovation in routine: developing “no-rinse products”;
  • reducing "rinse-off" water quantities: improving formulations for better rinsability, as measured and optimised by an internal methodology (R&I Evaluation Intelligence); and
  • deploying technologies to reduce water consumption across the value chain, notably with the L'Oréal Water Saver in hair salons.

These innovations demonstrate L'Oréal's commitment to offering responsible and sustainable solutions at every stage of product use.

Assessing environmental impacts using SPOT

As part of its sustainability drive, L'Oréal has developed the Sustainable Product Optimisation Tool (SPOT), which assesses the environmental footprint of products throughout their life cycles. Based on the European product environmental footprint benchmark, SPOT assesses 14 impact factors at each stage of the life cycle, from ingredients to use and recycling. These categories include the impact on climate change, water quantity and biodiversity.

As part of its continuous improvement approach, the data collected and the calculation method are constantly evolving. The data collected are then standardised according to the average impact of a consumer worldwide, resulting in a single global environmental footprint for each product.

The SPOT eco-design tool helps L'Oréal teams design products with a lower environmental impact. By comparing a product's footprint with a benchmark, the teams are able to identify areas for improvement in terms of formulas and packaging.

This tool supports L'Oréal's commitment to more responsible beauty and is part of a continuous improvement approach aimed at reducing overall environmental impact.