How L’Oréal Is Turning Itself Into A
Sustainability Leader
It’s the biggest cosmetics brand in the world, and it’s
out to prove that businesses in any sector can make conscious choices to cut
their environmental footprint.
Valued at $13.69
billion and employing around 78,000 people
worldwide, the L’Oréal Group is the largest and most
profitable company in the cosmetics industry. Between 2005 and 2016, it
increased production volume across its 34 brands by 29%. But in the same time
frame, the company reduced its greenhouse
gas emissions by 67%. “We are really serious about
sustainability across all of our products and services,” Alexandra Palt,
L’Oréal’s chief sustainability officer, tells Fast Company. And
that commitment, she adds, can go hand in hand with economic success.
Achieving sustainability in the cosmetics
industry is nowhere near as simple as swapping out petroleum-based products for
plant-derived alternatives. The entire industry supply chain–from where
materials are sourced to what happens to the discarded packaging of used-up
products–has the potential to leave a deep environmental footprint. But it’s
also one that Palt and L’Oréal believe can be effectively mitigated by tackling
each stage of a product’s development. In the beauty industry, an effective
sustainability overhaul would look something like this: sourcing from renewable
raw materials like plants; tightening transit routes and switching to electric
vehicles to reduce transport-related emissions; converting manufacturing facilities
to run on renewable energy; reducing the amount of water wasted in the
production process by installing on-site treatment mechanisms; reengineering
packaging to use less plastic, or biodegradable materials when possible. It’s a
daunting task, but one that, under Palt’s leadership, L’Oréal is tackling head
on, both through comprehensive employee training programs and partnerships with
verified sustainable suppliers around the globe.
In 2013, the company launched Sharing Beauty
With All, an overarching campaign to advance
sustainable practices across all aspects of the business, from sourcing to
manufacturing to packaging. The goal, Palt says, is to improve the
environmental and social profile of every L’Oréal Group product by 2020, and by
the same year, to become a “carbon balanced” company. At the launch of
the Women4Climate initiative, in which the 15 women mayors
represented in the C40 Cities network pledged to empower the next generation of
women to fight climate change, L’Oréal announced that it will come on board as
the initiative’s first corporate partner. The cosmetics company will fund
university-driven research on gender-specific issues related to climate change,
and is setting up a mentorship program for 500 women working to mitigate
climate change in 10 cities. Anne
Hidalgo, the mayor of Paris and the chair of C40,
said at the launch of Women4Climate that a women-led, public-private
partnership will be crucial in driving the
innovations necessary to promote sustainability and curb climate change.
Inside L’Oréal, the strategy is to make those
innovations inseparable from how the corporation functions. Though the Sharing
Beauty With All strategy is now entering its
fourth year, efforts to increase sustainability really began to take off last
year, starting with two changes to the corporate structure. First, at the
beginning of 2016, Jean-Paul Agon, the CEO of L’Oréal, made the decision to
have the Sustainable Development Department, which Palt heads up, report
directly to him. Previously, the sustainability team had been part of a larger
department including communication, public affairs, and philanthropy, but as
the sustainable transformation became a strategic priority, the team became
more integrated with upper management. “When the CEO has such a strong vision
for how a company can transform, you have to have a way to transform that
strategy into action,” Palt says. By tightening the lines of communication to upper
management, Palt’s department has been able to accelerate its plans to increase
sustainability.
And beginning at the same time, the bonuses
of all L’Oréal brand and country managers became linked to outcomes on three
environmental targets: improving the environmental and social profile of its
products, communicating the brand’s sustainability efforts to customers, and
the how the brand or region is positively contributing to environmental
efforts. Each of those categories, Palt says, is easily measured with key
performance indicators; the idea of linking the bonuses to these markers, she
says, sends the message that the company’s
commitment to sustainability is
a part of, not separate from, its business operations.
That will become clearer later this year,
when L’Oréal introduces its Sustainable
Product Documentation Tool–a computer platform
developed with input from two panels of international experts in the
environmental impact of products. The platform will include data on the
environmental impact of each raw material, the footprint of the packaging it
comes in, how many emissions were created as a result of the product’s
manufacturing and transportation, and the effect of the product on the
communities involved in its production, Palt says. Later this year, the tool
will be made available to consumers in an effort to boost transparency.
Before the release of that tool, though,
L’Oréal has been ramping up its efforts to hold itself accountable across all
sectors of its production cycles. The company has come under fire in the past
for using lead and cancer-causing chemicals in several of its products; since
2013, it has revamped 22%
of its products to make use, instead, of raw materials
sourced from renewable plant sources like quinoa, which is used in skin
exfoliating products. By 2020, the company intends for that number to be 100%.
Though L’Oréal recognizes that it won’t be
possible for the company to be completely carbon-neutral by 2020—transportation
and product refrigeration, Palt says, will still create emissions—the strategy
of becoming “carbon balanced” aims to offset the footprint the company leaves.
L’Oréal is reducing emissions by switching, when possible, to renewable energy:
Construction on two
large-scale solar projects at L’Oréal’s
manufacturing facilities in Kentucky and Arkansas got underway late last year,
and the company installed 12 wind turbines on the roof of its distribution
center in Dallas. Palt says these developments will reduce the company’s carbon
emissions in the U.S. by 80%.
And where it’s not possible to completely
transition to renewable practices, L’Oréal is pioneering the practice of
“carbon insetting,” in which the company supports ways to offset carbon
emissions along its supply chain. Its
work in Burkina Faso is an example: Almost 22,000 women in
the villages of Burkina Faso harvest the nuts that produce shea butter, which
is one of the 10 most commonly used ingredients across the L’Oréal Group; it’s
found in 1,200 of its products. The production of shea butter, which is one of
Burkina Faso’s leading outputs, results in the loss of around 100,000 hectares
of forest each year, as trees are cut down to power the stoves that women cook
the nuts in. In 2014, L’Oréal launched a program across the dozens of shea
butter cooperatives in Burkina Faso, training the women in sustainable production
practices and providing cleaner and more efficient cookstoves for the nuts,
which reduce the need for firewood and spare the women from exposure to smoke.
The program in Burkina Faso, Palt said at the
Women4Climate launch, “isn’t about charity. It’s about preparing our company to
meet the world’s environmental and social challenges.”
As the largest cosmetics company in the
world, L’Oréal is an obvious benchmark in the industry, but Palt doesn’t want
the company’s sustainability efforts to be seen as attempts to teach other
businesses a lesson. “We have a responsibility to lead,” Palt says, but that
responsibility is not motivated by competition: It’s driven by a desire to
respond to the very real threat of climate change. “Each year, 1.7 million children
die from pollution; people are starving because of climate change,” Palt says.
“We can’t wait until everybody is on board to start changing our practices.”
BY EILLIE ANZILOTTI
https://www.fastcompany.com/3069080/how-loreal-is-turning-itself-into-a-sustainability-leader?utm_source=mailchimp&utm_medium=email&utm_campaign=fast-company-daily-newsletter&position=3&partner=newsletter&campaign_date=03232017
