2020 CLOSING REPORT OUR ACHIEVEMENTS Reducing greenhouse gas emissions Reducing water consumption IMPROVING ENERGY EFFICIENCY WATERLOOP FACTORY GOAL For more than 20 years, the design and insulation of buildings, the optimisation In addition to reusing, treating and recycling of industrial processes and the use of less energy intensive technologies have used water in our factories, we continue to enabled us to reduce the energy consumption of our industrial sites. In this deploy technologies enabling factories to way, between 2005 and 2020, we lowered our consumption by 33% (in kWh becoming ‘waterloop factories’. This concept per 1,000 finished products). The Group has also undertaken to achieve ISO consists in only using public water supplies for 50001 (energy management) certification for all its factories. By the end of human consumption and for the production of 2020, 69% of its factories (or 27 factories) held the certification. high quality water used as an ingredient in our L’Oréal is growing its use of renewable energy thanks to initiatives adapted products. All the water needed for production to each site and the purchase of electricity and renewable gas. By the end processes (cleaning equipment, producing of 2020, 50 of the Group’s industrial sites had achieved carbon neutrality, steam etc.) is entirely derived from water including 19 factories. recycled. We first put the ‘waterloop factory’ concept into action in 2017 at our Burgos factory Elsewhere, our sustainable transport strategy is based on three pillars: reducing in Spain. In 2020, we also applied the concept air freight and the introduction of the Global Freight Cockpit programme; the at our sites in Settimo, Italy, Vorsino, Russia, Green Last Mile (GLAM) programme, a collection of initiatives to reduce the Libramont in Belgium and Mexico City in Mexico. environmental impact of transport in urban environments; and finally, the We will progressively implement this concept implementation of solutions enabling us to reduce CO emissions on long throughout all our factories. 2 distance road transport routes, known as Greener Lanes. Reducing waste A HIGHLY AMBITIOUS POLICY We are applying a rigorous waste management policy, which goes well beyond compliance. This is an ambitious challenge, in terms of L’Oréal’s stringent definition of waste, which is effectively any solid item that is not a finished product destined for consumption, whatever its subsequent treatment or future use might be. This includes, for example, raw material packaging or product packaging, or even the sludge from wastewater treatment plants. We are therefore implementing ambitious efforts to reduce waste at source, while ensuring that any residual waste is recovered for reuse or recycling. This has enabled the Group to reduce the volume of waste generated at its manufacturing sites by 37% since 2005 (in grams per finished product). Elsewhere, across our value chain, we are seeking to promote eco-design, resource efficiency and local waste management. Wherever we operate, the Group seeks to integrate itself within circular economy networks, creating industrial synergies with other local stakeholders. NET ZERO CO 2 EMISSIONS BY 2050 In September 2019, L’Oréal joined the UN’s Business Ambition for 1.5°C initiative and committed to zero net carbon emissions by 2050, contributing in this way to keeping global warming below 1.5°C compared to pre-industrial levels. 14