4. Sustainability Report
4.13 Responsible leadership and ethical practices (G1)4.13 Responsible leadership and ethical practices (G1)
4.13.1 Background
Underpinned by the demanding principles set out in its Code of Ethics, L’Oréal has built a solid governance framework that guides each of its employees, managers, directors and corporate officers. Beyond simply complying with the laws and regulations in the countries where it operates, L’Oréal strives to apply exemplary ethical standards throughout the world.
Through Speak Up, the Group encourages open and transparent dialogue, where everyone can report any behaviour that runs counter to L’Oréal's values. This ethical framework strengthens L’Oréal’s reputation and inspires trust among stakeholders.
4.13.1.1 Material impacts, risks and opportunities related to business conduct
| Description | Subtopics | Policy | Action plans | |
|---|---|---|---|---|
|
|
Description Responsible and ethical practices, including protection of whistleblowers, fair relationships with suppliers and compliance, are crucial for L’Oréal. Failure to respect these commitments could give rise to financial risks for the company, legal sanctions or damage to its reputation, a deterioration in relationships with suppliers, or a loss of trust among stakeholders. |
Subtopics Corporate culture Protection of whistleblowers Management of relationships with suppliers |
Policy Ethics policy Sustainable purchasing policy |
Action plans Reinforce ethics through compulsory training, a whistleblowing system, internal controls and regular audits Optimise supplier management through transparent communication, ongoing dialogue, compliance with payment deadlines, audits and ongoing support |
Time horizon: ST = short term; MT = medium term; LT = long term. 4.13.2 Responsible business conduct policies
True to its Sense of Purpose – “Create the beauty that moves the world” (see section 1.1.1) – and its stringent ethical principles, L'Oréal has developed a strong corporate culture. The Code of Ethics, presented below, formalises these commitments and provides a framework for all the Group's activities to develop responsible business conduct.
4.13.2.1 Ethics policy
L’Oréal’s development and reputation are underpinned by the essential ethical principles of integrity, respect, courage and transparency. Its ethics policy relies on two main pillars:
- The Code of Ethics, which applies to all employees, members of the Executive Committee and Management Committees and the Group’s corporate officers, guiding them in identifying sensitive situations and appropriate behaviour, through clear rules and concrete examples. Compliance with these principles is taken into account in the assessment of each employee’s performance, particularly managers. An ethical dimension is integrated into decision-making through regular dialogue with stakeholders and internal working groups, which reinforces the Group’s policies. The Code of Ethics sets out L’Oréal’s commitments as a company, an employer and a figure of responsibility.
- Speak Up: introduced in 2008, this internal whistleblowing system can be used by employees and external stakeholders to report concerns or breaches of Group rules in complete confidence, particularly in the areas of human rights, safety, corruption and the environment. Reports may be submitted via a secure, anonymous website, with a system on hand around the clock and available in 30 languages (www.lorealspeakup.com), or through the network of authorised persons, and are forwarded to the Chief Ethics, Risk and Compliance Officer. L’Oréal protects whistleblowers, ensures that information remains confidential, and undertakes to conduct an independent and impartial investigation into each report, followed by remediation if necessary.
Governance of the Group’s ethical principles is described in the Vigilance Plan in section 3.2.1.
4.13.2.2 Policy for responsible relationships with suppliers
L’Oréal places great store in an ethical and efficient value chain, putting sustainable and mutually beneficial relationships with its suppliers at the heart of its priorities. This policy is formalised in The Way We Work With Our Suppliers, which guides the actions of the Group and its employees.
L’Oréal undertakes to:
- select its suppliers rigorously and fairly, using open and transparent competitive bidding based on objective criteria for assessing areas such as quality, price, innovation and performance in terms of social and environmental responsibility (see section 4.4.2.2 for further details on the supplier selection scorecard);
- nurture a climate of trust and collaboration, by encouraging regular communication, guaranteeing that information exchanged is kept confidential and prohibiting all forms of corruption or favouritism. All suppliers sign the Mutual Ethical Commitment Letter, which sets out requirements in terms of respect for human rights, decent working conditions, environmental protection and business integrity; and
- see that financial commitments are met by paying all suppliers on time, regardless of the category of supplier and according to the agreed terms, pursuant to local legislation and the Group’s contractual commitments.