11 L’Oréal for the Future 10 L’Oréal for the Future Pillar II BUILDING A MORE INCLUSIVE SOCIETY We strongly believe that fairness and inclusivity are part of building a more sustainable world. Striving to be an exemplary leader, L’Oréal has been recognized as a best performer for its progressive social policies. But our sense of responsibility goes beyond. We are actively working with our business partners to help them improve their sustainable development performance and ensure their policies are as demanding as L’Oréal’s. We are also joining forces with our suppliers to develop our social inclusion programs, including our Solidarity Sourcing program, through which we direct a proportion of the Group’s global purchases to suppliers who give people who are typically excluded from the job market access to work and a sustainable income. This includes companies that employ people from underprivileged communities, firms that may not typically be able Empowering our business ecosystem to access major international calls for tenders, or micro-enterprises, across all the regions where L’Oréal operates. Our brands will also take action and use their influence to raise awareness among their partners, customers and consumers on today’s major societal challenges. Hence, by 2030: • We will ensure that 100% of our strategic suppliers’ employees will be paid at least a living wage, covering their basic needs and those of their dependents, calculated in line with best practices . • We will help 100,000 people from disadvantaged communities gain access to employment. • 3 million people will benefit from our brands’ social engagement programs. We believe it is our responsibility to involve our consumers, suppliers and the communities we work with in our transformation process, to help them transition to a more sustainable world. We have therefore set quantified objectives to this end. INFORMING CONSUMERS SO THEY CAN TAKE ACTION Alongside our own in-depth transformation process, we want to inspire our customers to take action with us. The more we know, the better we can act. An important part of achieving sustainability is accurately assessing the impact of products and acting to reduce that impact. We must also share this information with consumers so they can make informed, sustainable choices. People are willing to do their part for the environment but to do this, transparency is key. This is why we developed a Product Impact Labelling system to inform consumers on the environmental and social impact of their products. In order to provide consumers with clear and useful information, this Environmental and Social Impact Labelling includes a score on a scale from A to E, with an “A” product considered as “best in class” in terms of its environmental impact. The score will give an accurate vision of the impact of a L’Oréal product by taking into account 14 planetary impact factors such as greenhouse gas emissions, water scarcity, ocean acidification or impact on biodiversity, measured at every stage of a product’s life cycle. In addition to this information, L’Oréal will share details about the manufacturing conditions and packaging profile of each product. The labelling will also display key information regarding a product’s social impact, including compliance by raw materials and packaging suppliers with the fundamental principles of the United Nations on labor standards and the number of suppliers * Thanks to SPOT (Sustainable Product Optimization Tool), a unique tool developed by our Packaging and Research teams, whenever we produce or renovate our products, we simulate diverse design options in order to assess their impact on the environment and society, and ensure progress across every aspect of the product (formula, packaging, etc.) committed to social inclusion and having contributed to the product, if any. The method has been approved by independent scientific experts and data have been verified by Bureau Veritas, an independent auditor. • By 2022, this labelling system will apply to all the Group’s rinse-off products. • By 2030, 100% of our products will be ecodesigned * .