The Group has developed a two-pronged approach: It selects suppliers on the basis of their environmental and social performance, and provides them with training tools in order to help them to build their environmental strategy.
L’Oréal considers that the activities of its suppliers are part of its wider social and environmental footprint. The Group therefore partners on its sustainability initiatives with its suppliers, particularly its “strategic” suppliers, ie those whose added value is significant for the Group by contributing to L’Oréal’s strategy on a long-term basis through their weight, innovations, shared goals and geographical representation. In 2018, they represent 82% of direct purchases (raw materials, packaging and contract manufacturing).
Evaluating suppliers’ environmental and social performance
L’Oréal evaluates and selects its suppliers based on five key elements: quality, CR, innovation, supply chain and service, and competitiveness. These elements form a global assessment framework for all types of purchase. The CR pillar represents 20% of the total assessment score and is organised by a series of criteria, including:
- social audits - In 2018, 1,369 social audits were conducted, bringing the total number of audits to more than 10,800 since 2006;
- CR policy assessment by Ecovadis - By the end of 2018, more than 620 suppliers, including 161 strategic suppliers were assessed (compared to 480 suppliers, including 153 strategic suppliers in 2017). This represents 93% of the Group’s strategic suppliers;
- capacity to propose responsible products and services – this includes everything from green chemistry and eco-designed packaging to POS advertising;
- score achieved through CDP’s programmes;
- integration of projects such as Solidarity Sourcing within their operations.
Helping them to build their environmental strategy
L’Oréal provides its suppliers with in-service training tools to help them optimise their social and environmental policies. With approximately 28% of the Group’s carbon footprint arising from its suppliers’ activities, L’Oréal has encouraged suppliers to work with CDP, within the scope of the CDP Supply Chain programme, since 2009. In this way, suppliers are encouraged to develop carbon emissions reduction goals and communicate their 2020 action plans. In 2018, 437 L’Oréal suppliers undertook an initiative of this kind (compared to 355 in 2017). By the end of 2018, the suppliers participating in the CDP Supply Chain programme represented 82% of the Group’s direct purchases (compared to 60% in 2017). L’Oréal’s goal is to expand this share to 80% by 2020.
L’Oréal has taken the same approach with regard to two other CDP programmes. The Group has encouraged its suppliers to join CDP’s Water Disclosure Project Supply Chain since its launch in 2013. 91 suppliers participated in 2018. Elsewhere, in 2018, 32 suppliers of paper, palm oil and soy participated in the first edition of CDP’s Forest Disclosure Project Supply Chain.