2020 CLOSING REPORT OUR ACHIEVEMENTS Reducing the environmental impact of formulas and helping to ensure respect for biodiversity AN ECO-DESIGN TOOL FOR FORMULAS All the products made by the Group have been categorised in line with the benefits offered to the consumer, and we have already assessed 40,000 formulas, through an eco-design tool, called SPOT (Sustainable Product Optimization Tool), created in order to improve the environmental footprint of formulas. Used by all our formulation teams, this tool has notably helped to improve the biodegradability of formulas and to further integrate ingredients of natural origin. Today, 59% (by volume) of raw materials used by L’Oréal are renewable, meaning they are largely of plant origin. This represents around 1,600 raw materials derived from nearly 350 plant species from around 100 countries. 87% (by volume) of these renewable raw materials are * derived from certified sustainable sources. Optimising packaging RESPECT, REDUCE AND REPLACE Since 2007, L’Oréal has deployed a policy of responsible packaging called the ‘3Rs’, based on three pillars: Respect, Reduce and Replace. We implemented a global and systematic process of eco-design for the packaging of finished products and transport packaging. This initiative has extended to publicity materials on point of sale (POS) displays since 2015. We undertake a systematic analysis of the environmental profile of packaging, using SPOT, the assessment tool that L’Oréal and our partners launched to develop the products and packaging of tomorrow. Achieving zero deforestation Since 2007, L’Oréal has implemented action plans in order to guarantee a sustainable supply of agricultural raw materials that may be vulnerable to causing deforestation, including palm oil, soya oil and wood fibre-based products. L’Oréal has a specific strategy for palm oil derivatives, in partnership with all stakeholders (producers, NGOs and suppliers): 100% of our palm oil, palm oil derivatives and palm kernel oil supplies have been certified sustainable 2025 PLASTIC REDUCTION according to RSPO criteria since 2012, and 92% of the main derivatives come from known sources (traceable back to COMMITMENTS the mills). Since 2018, the Group has been a partner of the In 2020, 100% of the soya oil used by L’Oréal and sourced Ellen MacArthur Foundation, with an ambition that from Latin America was certified sustainable. Elsewhere, 100% of our plastic packaging will be refillable, 100% of the paper used for product instructions and 100% reusable, recyclable or compostable by 2025. of the cardboard for product packaging was derived Elsewhere, we have committed to ensuring that from responsibly managed forests (with an FSC or PEFC 100% of our plastic is derived from recycled or certification). bio-sourced materials by 2030. * The list of recognised certifications was defined with the support of the NGO the Rainforest Alliance in 2017. This list respects L’Oréal’s sustainable sourcing criteria (which comprise 88 indicators). It was reviewed in 2019 by Ecocert Expert Consulting, The Biodiversity Consultancy and The Danish Institute for Human Rights. 12