L’Oreal’s environmental commitment – How the company is acting to beautify the environment

Written by: Darragh Egan, Vivian Ping Liu, Joao Mexia & Marie-Aude Vassy

About L’Oréal

L’Oréal is a French-based cosmetics manufacturer present in 130 countries on five continents. The group’s mission is to provide the best in cosmetics innovation to women and men around the world with respect for their diversity. The Company has 36 brands and operates in four divisions: (1) Professional with products used and sold in hair and beauty salons; (2) Consumer with products sold in in mass market retailers; (3) L’Oréal Luxe with products are sold in department stores; and (4) Active Cosmetics with sold through health channels (pharmacies, drugstores and medispas). The company continuously outgrows the cosmetics market (5-5.5% growth in 2019) and had sales of 25.87bn euros in 2019.

As part of L’Oréal’s sustainability and CSR programme, Sharing Beauty With All (SBWA), launched in 2013, the Group has set itself a series of tangible commitments towards 2020. They address all its impacts and engage its whole value chain– from product design to distribution – including the production process and the sourcing of raw materials. These commitments are organised into four pillars: innovating sustainably, producing sustainably, living sustainably and sharing growth with employees, suppliers and the communities with which L’Oréal interacts. Every year, L’Oréal measures its progress quantitatively, making its results available to everyone. By upholding its commitment to continuous improvement, L’Oréal maintains an ongoing dialogue with its stakeholders, in order to share its sustainability strategy and co-create its initiatives. This sustainability programme, along with its strong commitment to ethics, its policy of promoting diversity and inclusion, and its philanthropic activities (conducted with the support of the Fondation L’Oréal and by its brands), enable the Group to contribute to 14 of the 17 Sustainable Development Goals defined by the United Nations in 2015.

L’Oréal’s response to Climate change

Following SBWA, in 2017, L’Oréal made a new set of commitments on combating climate change, including reducing all its greenhouse gas emissions by 25% in absolute terms by 2030 (scope 1,2 and 3).  In support of this goal, the company will fully eliminate emissions scope 1 and 2 from its industrial, administrative and research sites by 2025. L’Oréal’s ambition in terms of sustainable development is also about protecting the planet’s natural resources. It has implemented numerous initiatives to contribute to a responsible, sustainable business model, including improving the biodegradability of its formulations, sustainable sourcing of raw materials -a “zero deforestation” commitment- eco-design of packaging and a zero landfill waste reduction initiative.

This week, they inaugurated their new social and environmental solidarity program “L’Oréal for the Futur”, contributing to the regeneration of damaged natural ecosystems and efforts to prevent climate change, with €100 million dedicated to environmental impact investing. Often cited in environmental articles, L’Oréal was awarded in 2019 the triple A score (climate change, water security and forests) by the CDP.

So what is L’Oréal concretely doing right to deserve such recognition?

The first area in which it has ambitious targets is production. Being a big industrial player, a lot of improvement can be gained in its production process. By 2020 and based on the 2005 figures, L’Oréal has committed to reducing its CO2 emitted by plants by 60%, its water by consumption by 60% and its waste generation by 60% and to send zero industrial waste to landfill. Some of the measures they have taken to achieve those goal include recycling their industrial water and converting some of their plants into “Dry Plants/Waterloop plant” (100% of the water consumption is dedicated to raw material and human consumption. They have also gone through some palettization densification or using half/quarter pallets to ensure all trucks are filled at capacity as well as eradicating certain layers of tertiary packaging.

The other area L’Oréal has been very proactive in improving is the impact of its products. SPOT (Sustainable Product Optimization Tool) is a score given to every product, evaluating it’s impact through formula footprint, green chemistry, social impact and packaging. In 2018, 79% of new or renovated products have an improved SPOT score. Packaging in particular has a very bad reputation among the public and some brands (e.g. Biotherm) have openly branded themselves as environment friendly.

L’Oreal’s Environmental Efforts going forward

Aligned with the UN climate goals, L’Oreal targets to be a net zero emissions company by 2050. To achieve this vision, the group should continue to develop environmental sustainability efforts across packaging, product and operations as it should deepen the initiatives within each of these three areas.Considering packaging, the is an opportunity to explore the sale of larger quantity packages, incentivizing the consumer to buy less frequently and therefore reducing the number of packs needed. Although plastic will remain the main element of product packaging for L’Oreal, considering the conservation of its products, the company can expand the use of plastic free/recyclable cardboard for external packaging and work on the image of such materials to be compatible with high quality beauty products. Finally, the company could consider implementing a C2C design philosophy like HM, targeting the compatibility between the different parts of the pack (at this moment luxury products with golden details face recyclability issues) and its contents, to ensure full recyclability of its products.

On the formulation of its products, L’Oreal could make a more active effort to expand its product renovation program, specifically making sure that products are made using “greener” chemical compositions and the environmental impact of each component is accounted for. The company has already implemented a sustainability measurement for each of its products. It should consider expanding this methodology to all its brands (currently at 88%) and also growing the scope of the impacts assessed under this KPI.

Operations also represent a significant part of L’Oreal’s environmental impact. As an example, employee travel is the largest individual contributor to the company’s Carbon footprint. The current crisis is a great opportunity for L’Oreal to try and perfect virtual working processes and reduce its footprint and costs significantly in the future. Cosmetic production factories are large water consumers and, particularly in water deprived countries, should consider expanding water saving initiatives and L’Oreal as a whole could start introducing and testing “dry plant” manufacturing concepts.

2 Comments

  1. It is inspiring and encouraging to see L’Oréal’s leadership in this area. I worked for one of their competitors in the early 2010s, on a high-end luxury brand, and I remember when asking why we didn’t use more environmentally friendly packaging or ingredients I was told “luxury consumers don’t care about those things, we need to protect our brand” (i.e. by staying with traditional, unsustainable production and sourcing methods). I remember being quite unimpressed by that mentality, so it makes me happy to see that the industry is changing so quickly.

    And for what it’s worth, after the fact my previous employer did get much, much more serious about the topic.

  2. I was impressed by L’Oréal’s action called Responsible Mica Initiative (EMI) which aim is to eradicate child labour and unacceptable working conditions in the Indian mica supply chain by joining forces across industries with support of local NGOs. Almost 40% of its Natural mica is sourced from India from regions with a high risk of child labor & unsafe working conditions. Instead of discontinuing operations in India, L’Oreal committed itself to remain in India and ensure the traceability and transparency of its supply chain

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