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L’Oréal’s sustainability efforts are more than skin deep, but not shown in the best light in this latest report
L’Oréal’s 2008 sustainable development report showcases the company’s many sustainability achievements. Advances in dermatologic research, dramatic improvements in safety, reductions in water consumption and waste generation, a new programme of supplier auditing, extensive ethics training and monitoring – all these gains point to a systematic effort by L’Oréal to address environmental, social and governance issues. The company also includes short- and longer-term targets, including environmental goals, supplier auditing objectives, and activities to support responsible consumer communications.
L’Oréal helps orient readers to key points in the 85-page report by including in each section a “commitment” statement and a highlighted box of significant figures. Graphs and charts reflect multi-year trend lines and are easy to read. The company has also created an online microsite that mirrors report content, allowing readers to browse through topics of interest in a more interactive way.
The report seems to offer a balanced mix of topics, but L’Oréal does not include a materiality analysis. It is thus hard to tell whether the coverage in each section appropriately reflects its relative importance to stakeholders and the company’s own strategic approach.
Lost in translation?
A decided drawback to the report is, unfortunately, the text itself. Perhaps the dense language and clinical tone are a result of translation. Whatever the reason, we are left with paragraph upon dense paragraph of complex sentence structures, passive voice and confusing terminology. This problem is most apparent in the section on research and development, where it appears that L’Oréal is simply repeating the same information in different ways. In fact, L’Oréal is instead laying out a series of detailed processes for selecting, screening, and testing raw materials, cosmetics ingredients, and finished products – a conclusion this reviewer reached only after multiple readings.
Looking beyond accessibility, the greatest failing of the report is that L’Oréal either omits entirely or glosses over the true complexity of sustainable operation. For example, when referring to challenges, L’Oréal resorts to bland pronouncements such as: “Reconciling the increasing use of vegetable resources and the protection of biodiversity is a huge challenge if L’Oréal wishes to engage in sustainability development.” Although the company describes the steps it is taking to address the biodiversity impacts of raw materials sourcing, it does not provide enough context for the reader to judge whether these efforts will be sufficient.
In the company’s supply chain, L’Oréal’s audits of 688 supplier factories revealed that 68% failed to meet satisfactory standards of performance based on the L’Oréal Purchasing Code of Ethics. L’Oréal discloses the most common nonconformities as hours of work, compensation, and health and safety. Despite this laudable transparency, L’Oréal fails to convey a sense of urgency for correcting this dismal record. For example, the actions L’Oréal is taking in response to nonconformities are listed in tiny text embedded in a two-page table – hardly easy to find.
Another example surrounds L’Oréal’s calculations of average carbon footprint of each phase of a product’s life-cycle. Consumer use comprises the greatest portion of the carbon footprint (at 58%), mostly related to the use of heated water, ie for shampooing. Raw materials and packaging are the next highest contributor. Given the importance of consumer behaviour, L’Oréal’s silence on whether or how it is trying to influence consumers’ use of its products to mitigate environmental impact is surprising.
L’Oréal provides brief “position statements” on substances of concern such as phthalates, parabens and triclosan. The company identifies its current policy towards use or elimination of these particular substances, but neglects to describe why the substances themselves are problematic. The lack of context therefore renders this section nearly useless to a non-chemist (or non-activist).
And on the workforce front, L’Oréal references the employee Pulse survey, which polled 28,000 employees in 28 countries. Following the survey, L’Oréal established employee teams to generate ideas for improvement. Again, this is seemingly great news, but readers are in the dark about the actual survey results. By omitting these meaningful details, L’Oréal guts this discussion of much of its value.
In sum, L’Oréal’s report is substantive and comprehensive, but suffers from a lack of prioritisation and follow-through. With a bit more attention to prioritisation, context, and accessibility, L’Oréal’s reporting could truly shine.
Opportunity for next time
In June 2009, La Cour de Cassation (France’s highest court) ruled that L’Oréal was guilty of discriminating against black, Arab and Asian women in hiring sales staff to promote its Garnier Fructis Style hair-care product. This decision upholds an earlier 2007 ruling by the Paris appeal court, and reflects instructions in an internal fax sent in 2000.
Though the ruling is based on events years ago, consumers scanning headlines in 2009 would certainly have come away with a negative impression of the brand. L’Oréal thus has an opportunity in its next report to create a case study addendum to its diversity section that discusses its response to this case within the broader context of effectively promulgating, integrating and enforcing a diversity mindset across its operations.
Follows GRI? GRI index included; no application level provided.
Materiality analysis? No
Stakeholder input? Some quotes included.
Seeks feedback? Email address provided.
Key strength: Solid measurement of performance: quantitative data and trend-lines.
Chief weakness: Dense and clinical text makes for difficult reading.
Pleasant surprise: Clear “commitment” statements for performance area.