2024
L'Oréal
Year
Sector
Production biens de consommation
ACT assessment methodology
Generic
Performance Score
Strengths of the transition plan: The group has set ambitious objectives for all these scopes. The reduction in emissions on scopes 1 &2 between 2019 and 2024 is 51% (target 57% in 2030). The investments made over the last three years are on average more than 20% (estimated on the basis of a percentage of alignment with the company's eligibility percentage) dedicated to low-carbon investments. The L'Oréal Group has a strong packaging policy: eco-design (objective to eco-design all Group products by 2030; 98% in 2024), reduction in intensity (target of -20% of packaging used compared to 2019 by 2030; 11% in 2024), use of recycled or bio-based materials for packaging plastics (target of 50% recycled or bio-based plastics by 2025 and 100% by 2030; 37% in 2024), and promotion of refillable, reusable and recyclable packaging (target of 100% refillable, reusable, recyclable or compostable plastic packaging by 2025; 49% in 2024). Climate issues seem to be fully integrated into the Group's strategy - the transition plan, validated by management, is being rolled out at all levels of the group. L'Oréal works on many aspects with its strategic suppliers (training, support, definition of expectations and reduction targets, transparency, etc.). Since 2014, strategic suppliers have been required to report their emissions and reduction targets to the CDP. In 2022, the commitment covered 88% of direct purchases, which are the categories with the highest CO2 emissions. On the customer side, L'Oréal has developed the Product Impact Labeling system. This environmental score, ranging from A to E, provides a synthetic assessment of a product's environmental performance. The methodology is public and has an independent third-party verification certificate. 83% of the products were evaluated in 2022. Finally, regarding the evolution of its business model, L'Oréal aims to stop the use of petroleum-based plastic for packaging by 2030, with an intermediate target of 50% by 2025 (37% in 2024).
Areas for improvement identified: Upstream scope 3 emissions are increasing between 2019 and 2024 (+9%) while a reduction target is set at -28% in 2030.There is a lack of intermediate objectives. The company's objectives for 2030 are market-based. Emission reductions between 2019 and 2024 under this approach are 51%. However, in the location-based approach, the reduction in emissions is 20%. No information on the annual implementation of the actions over the next 5 years. Three decarbonization levers are identified without quantifying the expected gains for each. The annual visibility of the next few years is therefore limited. On the actions relating to scope 3, there is a lack of a breakdown of the emission reductions that can be obtained for each of the actions. L'Oréal could better explain the work it is doing on verifying the GHG emissions calculation work of strategic suppliers and report the results and conclusions of this work in the DEU. In the same way, L'Oréal could publish a target for the expected reduction or gain of the company's eco-designed products or indicate the degree of effort expected from the comparison of new products with existing products.
Areas for improvement identified: Upstream scope 3 emissions are increasing between 2019 and 2024 (+9%) while a reduction target is set at -28% in 2030.There is a lack of intermediate objectives. The company's objectives for 2030 are market-based. Emission reductions between 2019 and 2024 under this approach are 51%. However, in the location-based approach, the reduction in emissions is 20%. No information on the annual implementation of the actions over the next 5 years. Three decarbonization levers are identified without quantifying the expected gains for each. The annual visibility of the next few years is therefore limited. On the actions relating to scope 3, there is a lack of a breakdown of the emission reductions that can be obtained for each of the actions. L'Oréal could better explain the work it is doing on verifying the GHG emissions calculation work of strategic suppliers and report the results and conclusions of this work in the DEU. In the same way, L'Oréal could publish a target for the expected reduction or gain of the company's eco-designed products or indicate the degree of effort expected from the comparison of new products with existing products.
Narrative Score
Business model and strategy: L'Oréal has an image as a leader in terms of sustainability among its peers. However, L'Oréal does not have a concrete vision to align its ambitions and values with the decarbonization needs of its entire value chain to the right extent. The narrative carried by its marketing activities is the opposite of the needs of the environmental transition and it is difficult to believe that L'Oréal will be able to reposition itself and align its business model and its products in a low-carbon logic.
Consistency and credibility: L'Oréal's objectives for decarbonizing direct emissions seem achievable if we remain in a market-based approach. However, this is not the case for the targets on indirect emissions, which are still growing. Some parts of L'Oréal's strategy also seem to be at odds with the climate strategy, particularly on digital and distance selling and on the integration of AI.
Data quality: Overall, L'Oréal's publicly available reporting data appears consistent, credible, and is validated by third parties. Some minor data is sometimes missing, such as optional emissions (product rinsing) where it can be seen that emissions have decreased since 2019, but without explanation.
Reputation: The Group has faced various controversies, such as the misuse of the carbon neutrality argument, contrary to ADEME's recommendations and the law, the use of PFAS in certain products, and involvement in a deforestation case due to the use of palm oil in its products. On this last point, L'Oréal has committed in 2024 to ensuring that 100% of the palm oil purchased by the Group will be Roundtable on Sustainable Palm Oil (RSPO) certified, covering environmental and social responsibility including the protection of forests, the rights of workers, local communities and indigenous peoples.
Risks: L'Oréal has done a good job of identifying and mitigating the risks the group faces in terms of climate. Most of the risks are in the cosmetics sector and in the value chain (need for rinsing, dependence on ecosystem services for raw materials). On this second point, L'Oréal has been able to put together a relevant mitigation plan.
Consistency and credibility: L'Oréal's objectives for decarbonizing direct emissions seem achievable if we remain in a market-based approach. However, this is not the case for the targets on indirect emissions, which are still growing. Some parts of L'Oréal's strategy also seem to be at odds with the climate strategy, particularly on digital and distance selling and on the integration of AI.
Data quality: Overall, L'Oréal's publicly available reporting data appears consistent, credible, and is validated by third parties. Some minor data is sometimes missing, such as optional emissions (product rinsing) where it can be seen that emissions have decreased since 2019, but without explanation.
Reputation: The Group has faced various controversies, such as the misuse of the carbon neutrality argument, contrary to ADEME's recommendations and the law, the use of PFAS in certain products, and involvement in a deforestation case due to the use of palm oil in its products. On this last point, L'Oréal has committed in 2024 to ensuring that 100% of the palm oil purchased by the Group will be Roundtable on Sustainable Palm Oil (RSPO) certified, covering environmental and social responsibility including the protection of forests, the rights of workers, local communities and indigenous peoples.
Risks: L'Oréal has done a good job of identifying and mitigating the risks the group faces in terms of climate. Most of the risks are in the cosmetics sector and in the value chain (need for rinsing, dependence on ecosystem services for raw materials). On this second point, L'Oréal has been able to put together a relevant mitigation plan.
Trend score
Despite L'Oréal's position as a leader on environmental issues among its peers, its recent positions are not up to the task in the face of an increasingly pressing climate emergency. Its scope 3 reduction targets do not seem realistic in view of its recent results. These previous conclusions justify the attribution of the sign "=".
Source
ACT Eval 2
Evaluator
CITEPA
GLOBAL SCORE
Performance score (/100)
49
Disclosure score (/100)
98
ℹ️
Narrative Score (A > E)
C
Trend Score (- = +)
=
Scores by module
#1 : best score in the sample
N/A% = module not applicable to the sectoral methodology
Target Score : 75%
Material Investment Score : 25%
Intangible Investment Score : N/A%
Sold Product Performance Score : 21%
Management Score : 79%
Supplier Engagement Score : 85%
Client Engagement Score : 46%
Policy Engagement Score : 54%
Business Model Score : 31%
Indicator weight by module