

Introduction by: Peter Marshall
As we all know, L’Oréal has made very significant commitments to sustainability through its L’Oréal For The Future programme. Essentially, the world’s leading beauty company is focusing on three main areas: transforming its business activities, empowering its ecosystem and contributing to solving global environmental and social challenges.
I met up with Laurence Pardieu-Duthil, Chief Sustainability Officer, Global Travel Retail, at TFWA in Cannes. The interview that follows provides real insight into the scale and depth of commitment and the passion that L’Oréal holds to ensure that their ambitious targets are met in the next 5 years.
Peter Marshall (PM): Welcome to TRunblocked.com, Laurence. Sustainability is one subject area that appears to be top of the agenda at L’Oréal. How deep do you find the passion to get this right within the business?
Laurence Pardieu-Duthil (LPD): I must say very deep. L’Oreal is one of the first companies to have really invested strongly in sustainability very early on, some 15 years ago when we set our first carbon reduction targets for our sites. We then launched in 2015 our “Sharing Beauty With All” sustainability program. And in 2020, our latest even more ambitious program – L’Oréal For The Future.
It’s also a long time since L’Oreal appointed a dedicated Chief Corporate Responsibility Officer in the Executive Committee. Again, it was one of the first companies to pioneer this strategic organization.
You have to know sustainability is fully part of all leadership teams’ performance objectives. We are convinced about double performance – that is financial business performance and sustainability performance, and we have a bonus attached to this double performance.
PM: So your performance is measured, yes?
LPD: Yes. Of course. There’s no other way you can really act and measure progress.
PM: Let’s move on and jump straight into specifics. I mean, L’Oréal Groupe has put a lot of emphasis on refills and their positive impact on the environment. But the question about refills is in fact begged. Don’t you actually need to increase shelf space because you’re adding an additional SKU? That’s a commercial issue and doesn’t that also put pressure on your retail partners, not the brands, because they’re the ones that have actually got to physically open up space? Or will L’Oréal delist some of the other, perhaps less productive products in order to create new space for the stronger brands and their refills alongside?
LPD: Thank you to move directly on this topic as I believe refill is one of the most transformational topics in sustainability for the beauty industry. It’s as big as e-commerce for Digitalization. It’s about entering and developing circular beauty, which is a big change in how we consume consumer goods. It has a great impact in terms of sustainability because packaging is the number one impact item for many consumer goods companies and refills allow us, on average, to reduce packaging by approximately 40%.
Of course it takes some space on shelf, but it’s not an issue as refills are sold on best-sellers products with high rotations. The topic is really about making refills visible, to train salespeople, to put some promotional effort behind it and to create awareness around this new gesture of beauty.
PM: So it doesn’t cannibalize other brands of yours? Perhaps it does for others.
LPD: It does cannibalize some sales of the “parent product”, of course, because people are rebuying the refill instead of the parent product. But just a portion. We’ve been able to demonstrate that refills actually also recruit new consumers who are attracted upfront by the refill lower price and not only by sustainability. A refill is, by definition, more accessible and less expensive. It allows you to buy your favorite brand at a lower price per ml. As a consequence, it attracts consumers from different channels, from different brands and it allows you to boost sale conversion. It’s a very interesting and productive shelf space.
PM: Is it also good for targeting Gen Zers because they like the idea of things being more sustainable as products?
LPD: You’re fully right.
PM: So getting to a younger generation.
LPD: The younger generation, for the sustainability dimension, but also all generations because of the attractive pricing. Many consumers of all age groups are very attentive to pricing in inflationary times, especially in TR where price remains the number one reason to buy in this channel. This is a key argument to recruit and to boost sales conversion in this moment of post-Covid, where people are not only interested in sustainability, but also in real value for money.
PM: Ok. So refill bottles do need to be produced. But, as we know, they’re also mostly plastic. Now, isn’t there a slight contradiction in terms here, where L’Oréal are targeting to reduce plastic and yet are introducing more plastic bottles into the market? It’s logically inconsistent.
LPD: I would disagree with this statement. First, because one of the big categories where we roll-out refills is fragrance. And fragrance refills are in glass, very light glass.
And you are right in that we have plastic refill pouches for shampoo, body creams etc. But these pouches are 3 to 6 times less weight in plastic than the original bottle, which allows a very significant packaging saving. And a considerable CO2 saving, too. Both are hugely beneficial plusses.
PM: I think it was around 2007 when Thierry Mugler’s Alien started this program and achieved success. Yet, again, If my memory serves me well, L’Oréal Groupe followed the path in 2008 with multiple Giorgio Armani products, only to be discontinued the following year. I mean, I know you learn from failing, but is there any guarantee that, however good the initiative, success will actually be achieved with the re-attempt?
LPD: Like any innovation, it’s always a question of good timing. So before Covid, you are right, we had some trial and errors. Maybe the timing was a bit too early but, post-Covid, we see two big trends which refill can answer. First, a very clear trend for sustainability – the awareness and the need for more sustainable products has risen tremendously. Secondly, we experienced post-Covid an inflation time when people are looking more than ever for real value for money.
So, with these two trends we now see the refill market rising and really accelerating.
PM: So let’s just look at some of the other major sustainability actions the group has taken. Just walk us through what you think are the key highlights.
LPD: I could mention many of them but I would highlight how much L’Oréal is driving transparency initiatives and industry collaboration to accelerate sustainable consumption.
We founded an industry association which is now uniting seventy-one companies from the beauty industry to develop an Eco-Beauty Score to enable product environmental labeling in the beauty industry and better inform every consumer so that they know the impact of the beauty product they buy.
PM: So this is a major collaboration.
LPD: It’s a major collaboration and a very transformational move. And, frankly speaking, it’s quite unique in the consumer good industry
PM: And is L’Oréal first amongst equals in this collaboration, are you leading from the front?
LPD: Yes we are. We founded the association and proposed to collaborate with all beauty players to pioneer a common environmental labelling for the beauty industry.
PM: I think it’s a great thing, because not only are you taking the market up a level or two, you’re actually educating. And we know that other companies are not always operating at the same speed as you, so you’re leveling up. You’re bringing them up to the right speeds at the right time. And the benefit has only got to be good for the consumer, which is your ultimate objective.
LPD: We believe bringing environmental labelling is about bringing real innovation into the market, which we’ve always been able to do. Beauty That Moves The World – that’s a good example.
PM: Indeed. Now, one of the big questions in sustainability is, of course, logistics. Prada Group’s first investments in SAF certificates is through the use of the GoGreen Plus service with DHL. Where exactly does L’Oréal stand in this agreement as you have so recently obtained Prada’s beauty licence?
LPD: Logistics is one of the key sustainability topics in the supply chain. We are proud that only 0.2% of our products, weighted products, are transported by air freight. It’s a very small portion representing still 20% of the overall carbon on transportation.And last year, we’ve been able to further reduce the impact of transportation at Travel Retail by a double-digit percentage. You can see the determination we have on this topic. And that’s why we have been acknowledged by Ecovadis as amongst the top 1% Platinum Companies in the world to lead sustainability on the topic of supply.
PM: But doesn’t that put some pressure on you? Because if retailers are increasingly moving towards just-in-time delivery, freighting goods by ship takes time and that means that you may not always be able to meet their demands in terms of ordering and delivery.
LPD: Actually, it’s been successful for us and it has made us even more efficient in terms of sales forecasting with retailers. It has brought us to another level of efficiency and partnership on the topic of procurement.
PM: How long did it take you to achieve the numbers that you’ve just talked about?
LPD: This is the result of close collaboration all the years before, with a real acceleration post-covid. There is a point where all things come together and you really achieve a strong performance, which is the case on this topic.
PM: So are you involved with Heinemann and what they’re trying to do?
LPD: We are very happy to now ship our products by train to Heinemann. We are also a first mover here. We are also working on accelerating the shift to refills.
PM: This acceleration happened in one year. That’s why it’s such a positive result.
OK, let’s move on. In the past, luxury goods had a policy of terminating older products, contributing greatly to waste and land-fill. Specifically in travel retail, products actually had to be destroyed in the presence of government agents – from fire departments to customs. Have you put in place any new initiatives just to reduce this and/or apply a new policy to resell them at discount to find these products a new home?
LPD: It’s been a long time since we’ve really committed to reducing any type of waste. It was a combination of different types of measure. I can mention three of them as an example. The first one is to better forecast – again, better monitor the stock. The second one is to avoid returns by selling out directly in store the “near to expiry” products with a specific discount – ideally in specific ‘last chance’ gondolas. And the third one is that we’ve expanded re-monetization channels, like outlets or “friends and family sales”.
PM: Now, as we know, L’Oréal has recently adopted a new strategy to take equity across different startups. Are there any startups that you can currently identify that are operating in the sustainability vertical that L’Oréal are taking a positive interest in?
LPD: We invest in many startups because sustainability is a lot about innovation. We invest two-fold. The first is our investment in three funds which L’Oréal Group has created in the L’Oréal For The Future program. A Fund for Women, a Fund for Nature Regeneration and a fund for Circularity. We support different initiatives and growth stage company startups in these different areas.
That’s from one part. The other part is we have created a corporate venture capital fund called B.O.L.D., Business Opportunities for L’Oréal Development. BOLD is not dedicated to sustainability, but if you look in detail at the companies we are partnering with, a lot of them have a direct interest in sustainability.
PM: So they have to tick your sustainability boxes before you actually take a sufficiently strong investment interest in them.
LPD: Yes. I would mention some examples. One is Carbios, which focuses on enzymatic recycling. it’s bio recycling processes, which is a very innovative type of recycling without loss of quality.
And I would also mention five start-ups in biotech formulation. We spoke a lot about packaging, but the other part of the product transformation is the formulation. We are committing to have 95% of our ingredients in formulas from bio-based sources, derived from abundant minerals or circular processes by 2030. We were at 65% in 2023, which is already a great performance. But for the last miles, we need to find more ingredient alternatives and that’s why we invest in biotech, as an example, new bio ingredients from algae, from fermentation etc. They are very new processes which will allow us also to bring very innovative formulations to the market.
We believe it will be a double win, for sustainability of course, but also in terms of performance, bringing new types of very innovative formulations to the market.
A very different example of what we do is that we purchased a Swiss company that produced a new shower head for salons. This new shower head has the technology to reduce the consumption of water from almost 70%. We saved 2 million litres of water since we started to equip salons.
PM: So, Laurence, last question. From your own and the company’s experience, what are the key learnings the industry can actually take out right now from what L’Oréal are doing? Give me three key things you think the industry can learn from you.
LPD: The first one is Leadership – to lead sustainability from the top of the company, from the CEO, and make it a clear priority in the way we handle business and to cascade down this leadership in the whole organization. In all management committees, in the same way you have a CFO, a Communication Officer, a Chief Commercial Officer, etc. you also have a Chief Sustainability Officer, responsible for driving this strategic change. And you clearly reward sustainability performance everywhere in the organization and consider it as leadership performance.
The second one is Focus, which is that you clearly identify which are the biggest topics where you can have an impact and converge resources on it. You need to focus on the right levers which will really drive strong impact.
And I think the third one, not the least one, is all about People: onboarding and upskilling everyone in the organization. Sustainability is still a new topic, a lot about innovation, which is not fully mastered by people. There’s a lot of disinformation as well.
PM: Well, that’s for sure.
LPD: There’s a need for education at all levels of the organization. We are investing a lot in upskilling, engaging people internally but also partners, suppliers, retailers, even competitors. This is the only way we can move quickly forward. We are confident we have or will have the solutions. The big question is: how quick can we be? And we want to be quick.
PM: And you want to be in the industry with you, to be at your speed and for the greater good.
LPD: Yes of course, and for the benefit of the market. We strongly believe sustainability is about creating value – for now and for the future. And that’s the name of our program – L’Oréal For The Future.
PM: Thank you for your time, Laurence.
LPD: Thank you very much, Peter.
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