L'Oréal

Because the planet is worth it: L’Oréal’s bold sustainability targets

Can you double your production and slash your carbon footprint at the same time? L’Oréal thinks it can. It has set itself the goal of attracting a billion more new customers across their 32 brands in the years to come. But to do that sustainably, it’s going to have to make some big changes in the way it does business. [1]

So L’Oréal set some bold targets. By 2020, it is aiming to reduce its environmental footprint (Scope 1 and 2 GHG emissions) by 60% from 2005 levels. That means cutting CO2 emissions at its plants and distribution centers by 60% in absolute terms (from 2005 levels) and emissions from transporting their products by 20% per finished product (from 2011 levels). [2]

Its production is likely to double by 2020 so, taking that into account, the overall impact of the emissions targets will be closer to an 80% emissions cut—a tall order. [3] These targets are in line with the sectoral decarbonization approach developed by the Carbon Disclosure Project, WWF, and World Resources Institute, and informed by the findings of the Intergovernmental Panel on Climate Change and International Energy Agency, with Ecofys as a technical consultant. [4]

Constructive criticism

L’Oréal spent two years developing its targets and talked to 754 different organizations in the process. It presented them at a series of 14 stakeholder forums in eight different countries and asked people what they thought.

The targets were mostly well received. But its stakeholders pointed out that L’Oréal needed to do more with the people who buy their products—both in terms of communicating sustainability messages in a way that feels distinctly L’Oréal and in helping consumers live more sustainably themselves. Just making the business greener wasn’t going to cut it.

These issues are now an essential part of L’Oréal’s 2020 sustainability commitment and strategy: each brand will look closely at its environmental and social impact, come up with an action plan to limit that impact and report on how it is doing. By 2020, L’Oréal will also be using a product assessment tool to evaluate all its new products for their environmental and social impact and the brands will pass this information on to help consumers make informed choices about what they buy. [5]

Staying objective

L’Oréal’s targets align with the Sectoral Decarbonization Approach (though it doesn’t use it exactly). It is measuring itself against its targets transparently and objectively. L’Oréal has  set concrete “key performance areas” against each of its commitments and a panel of independent environmental experts will assess how it is doing. The panel is chaired by José María Figueres, the former president of Costa Rica and a renowned expert on sustainable development. [6]

Investing in renewable energy

L’Oréal is doing various things to meet its targets, including investing in lots of different renewable energy projects. It has installed solar panels at sites in Mexico, India, Germany and across the US, including a 1.4 MW rooftop system at its manufacturing facility in New Jersey. 

It’s not just solar, either.  L’Oréal  has hydroelectric stations in the US, a geothermal plant in France, a biomethane system in Belgium and wind turbines in Mexico.  [7]

It is also looking at energy efficiency. Any new buildings must respect the most cutting-edge sustainable building standards (like LEED, HQE and BREEAM).

The company opened its largest factory in Indonesia in late 2012. It was designed with the environment in mind and achieved a silver LEED certification—the first manufacturing site in Indonesia to do so. “Reducing CO2 emissions is the key issue,” says the factory’s director, Adrianne Chinetti, “and we explored all solutions.” The plant’s managers considered solar panels, cogeneration and wind power. In the end, they chose a hydroelectric system: 60% of electrical energy used at the plant will be green. [8]

A vast challenge

L’Oréal made its commitments in October 2013 and published its first update in April 2014 with its Sharing Beauty With All progress report (www.sharingbeautywithall.com) . It has achieved its previous target to cut CO2 emissions at its plants and distribution centers by 50% in absolute terms between 2005 and 2015. And, it managed to do this even though its production volume went up by 21%. L’Oréal now needs to start setting longer-term goals—to 2050—if it is to stay in line with what science says they need to achieve. [9]

L’Oréal does not doubt that its targets are ambitious. But its chairman and CEO, Jean-Paul Agon, says the company is “determined to forge ahead,” despite it being “a vast challenge, which means a profound cultural change for our Group and the way it interacts with society.” [10]  

RESOURCES

[1]  http://www.loreal-finance.com/_docs/pdf/rapport-annuel/2013/LOREAL_Rapport-Activite-2013_GB.pdf
[2]  http://www.loreal.com/sharing-beauty-with-all/our-vision/our-commitments-and-targets.aspx
[3]  http://www.loreal.com/sharing-beauty-with-all/our-vision/commitments-co-created-with-our-stakeholders.aspx
[4]  http://www.sciencebasedtargets.org/wp-content/uploads/2014/09/The_Sectoral_Decarbonization_Approach.pdf
[5]  http://www.loreal.com/sharing-beauty-with-all/our-vision/commitments-co-created-with-our-stakeholders.aspx
[6]  http://www.loreal.com/sharing-beauty-with-all/our-vision/our-sustainability-commitment-for-2020-by-alexandra-palt-director-csr-sustainability.aspx#desc86264
[7]  http://www.prnewswire.com/news-releases/loreal-signs-the-climate-declaration-in-support-of-climate-change-policy-202337321.html
[8]  http://www.loreal-finance.com/_docs/pdf/rapport-annuel/2013/LOREAL-RDD2013-EN_01.pdf
[9]  http://www.loreal-finance.com/_docs/fichiers_appmobile/0000000012/RALO014_GB_web2.pdf
[10] http://www.edie.net/news/4/-Sharing-beauty-for-all---L-Or-al-on-track-with-environmental-goals/

Headquarters 
Europe
Revenue 
US$24.4 billion
Employees 
78,611
Industry 
Consumer Staples