L'Oreal : Answers of the Board of Directors to written questions

L'Oréal Annual General Meeting held on 23 April 2024

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Answers of the Board of Directors to written questions asked by shareholders

On the occasion of a general meeting, written questions may be addressed to the Company under the conditions laid down by law. In accordance with the legislation in force, the answer to a question is deemed to have been provided as soon as it is published on the Company's website.

NB: The answers included in this document have been provided in compliance with Article R.225-84 of the French Commercial Code which governs the mechanism of "questions écrites" to which French companies are subject. The Board of Directors answered the questions asked by shareholders in French. This English version is issued solely for the convenience of English-speaking readers. In case of discrepancy between this document and its French version, the French version shall prevail.

FIR questions

The Forum pour l'Investissement Responsable (FIR) is a multi-stakeholder association that promotes and develops Socially Responsible Investing (SRI). It engages in constructive dialogue with leading French businesses in the context of its Dialogue and Engagement Committee (Commission Dialogue et Engagement), whose members manage over 4,600 billion euros in assets.

For the fifth year running, the FIR is sending all companies listed on the CAC 40 index questions produced by sector and subject-matter experts related to environmental, social and governance (ESG) issues. The reports on the responses given from 2020 to 2023 are available on our website and an analysis of the 2024 answers will be published in a new study, which will highlight the progress made.

The FIR expects the answers provided by companies to be tailored and appropriate to the questions asked. References made to documents available on companies' websites may be used by analysts when they are essential to reach a clear understanding of the answers given and provided that they can be fully localised.

This year, the overall rating of answers may be weighted, according to your material issues. Please indicate the level of materiality you assign to each issue (see email for details).

Please also find attached your 2023 evaluation, along with contextual information to foster greater transparency and precision in your answers.

L'Oréal's overall average score for 2023 was 1.9/3. For one question, you did not score any points. Please see below for details.

Questions

Q1

Q2

Q3

Q4

Q5

Q6

Q7

Q8

Q9

Q10

Themes

Environment

Biodiversity

Circular economy

Remuneration Share buybacks Living wage Employee savings Taxation Lobbying

Integration of social partners

Score/3 2 3 2 2 1 3 2 0 3 1

NB: The theme for question 4 has changed this year. In 2024, questions 4 and 10 have been switched to

maintain the order of key pillars: environmental (Q1 to Q3), social (Q4 to Q7) and governance (Q8 to Q10).

Please see below our questions this year as follow:

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1. Environment

Question 1

1. Could you reiterate your short-, medium- and long-term decarbonisation targets for each of your three scopes (in terms of both your absolute value and intensity)? Please clarify the key initiatives you are planning to meet each goal (including the percentage contribution of each initiative to each goal).
   What proportion of your strategy is dedicated to negative emissions (e.g., absorption and storage), emissions prevented and carbon credits (as distinct from your decarbonisation targets)?
   You may use the table in Appendix 1 to clarify your answer.
2. Could you also indicate the amount of investment necessary for each of the actions implemented across your three scopes? Please specify the time horizon for each of these investments.
   The information required here is very often different from the amount of CAPEX/OPEX aligned with EU Taxonomy, which only covers investments in your sustainable activities and excludes those related to your overall decarbonisation plan.
3. On which reference scenario(s) is your decarbonisation strategy based (for the three scopes)? Is it aligned with a 1.5°C scenario? Has it been approved by an independent third party such as the SBTi or ACT- ADEME?
   Please provide the name of the reference scenario(s) and the reference organisation(s) (e.g., IEA, IPCC, etc.).
   Question 2
   There is still insufficient consideration of biodiversity-related risks, impacts, dependencies and opportunities in companies' business activities (internal operations, supply chain, products, customer services, etc.). However, the context and the tools (e.g., TNFD, SBTN, GRI) are improving, as are related practices. This issue may seem somewhat immaterial for some sectors. However, we feel it nonetheless warrants an analysis by all parties.

1. Have you taken any steps to assess, monitor and reduce your dependencies, your risks and your footprint while also exploring your opportunities (investment in projects that have nature-positive impacts, services that promote diversity, etc.) with respect to biodiversity and nature?
   Is this assessment up to dateand does it cover your entire value chain (direct operations, upstream and downstream)? In the event that it does not cover part of your value chain, do you plan to extend the scope of this assessment? If not, why?
2. Do you publish the results of this work? If not, do you plan to publish them? Please explain your answer.
   Do you plan to draw on voluntary frameworks such as the TNFD, SBTN or GRI101 to report on nature-related risks and opportunities?
3. Do you publish or do you plan to publish quantitative indicators for biodiversity-related risks and opportunities for your company (assets, liabilities, income and expenditure seen as vulnerable to nature-related risks, CAPEX, financing or investment earmarked for nature-related opportunities)? If so, please state which and indicate whether you set targets? Explain why you chose these indicators. If not, please state why.

Question 3

1. How does the circular economy fit into the company's strategy? Assessment criteria:
2. • Targets (quantitative, ambition, scope)
   • Ambition and quality of strategy

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1. • Links to other sustainable development issues (such as decarbonisation and biodiversity)
2. What risks has the company identified in relation to resources, costs incurred and the amount of CAPEX/OPEX allocated to promote a circular economy?
   Assessment criteria:
3. • Identification of upstream and downstream risks (scarcity, sourcing, access difficulties, waste management, regulation, etc.)
   • Related financial costs
   • CAPEX and OPEX (as %)
4. What key actions has the company taken to create a more circular business model? What proportion of sales does this represent?
   Assessment criteria:
5. • Integration of the different pillars of the circular economy (reducing resource consumption/conservation, eco- design, sustainable sourcing, reuse, industrial and territorial ecology, recycling, etc.)
   • Scaling up initiatives and projects to promote a circular economy
   • Percentage of sales linked to circular solutions (or any other indictor linked to the circular economy)

2. Social

Question 4

1. In France, the "Climate and Resilience" Act of 22 August 2021 (Loi "Climat et Résilience") and the national cross- industry agreement (ANI) on the ecological transition and social dialogue of 11 April 2023 extended the environmental prerogatives assigned to the Social and Economic Committee (SEC) while strengthening the role of local representatives. In the past twelve months, which initiatives have most clearly embodied a change in the way these bodies operate within your Group, in line with these measures?
2. In light of these new prerogatives, the training and expertise of social partners are key issues. Have you recently developed (or do you plan to develop in the near future) any programmes dedicated to social partnersto foster their expertise in environmental issues beyond the minimum legal requirements?
3. International framework agreements are a means to improve the quality of social relations within large companies. Does your Group have a framework agreement that goes beyond the scope of the European Union? If so, how have you incorporated the issue of the ecological transition and broader environmental issues? If not, do you have any plans to do so? For your five main regional markets outside France, can you list key initiatives that highlight a recent increase in the involvement of social partners in the company's environmental policy?

Question 5

1. For each of the last five financial years, could you please state the number of shares repurchased (please also indicate the number of shares under liquidity contracts) and the number of shares issued, along with the number of treasury shares held at the start and end of each financial year? For each of these financial years, please provide a breakdown of the number of shares cancelled; the number of shares allocated as performance shares (along with the number of beneficiaries and their proportion in relation to the overall number of group employees); the number of shares distributed through employee shareholding plans (along with the number of eligible employees, the number of actual beneficiaries and their percentage of the total Group workforce); other uses (including relevant details)?
   You may use the table in Appendix 2 to clarify your answer.

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1. With respect to performance share plan, where applicable, how do you "offset" the effects of treasury shares or cancelled shares to determine whether goals have been met?
2. Please indicate the amount invested (R&D and capex) over the past five financial years (year by year). How much share capital have you repurchased and cancelled during this period? You may use the table in Appendix 3 to clarify your answer. As part of the overall approach to value sharing, do you scale the amount allocated to share buybacks in relation to amount of investments - particularly with respect to the ecological transition - by the company (which is vital to create value and ensure the long-term success of the company)? If so, do you apply any particular rules in this regard? If not, please explain why you have chosen not to consider investments when determining buyback amounts.
   Question 6
   The Global Living Wage Coalition defines a living wage as: "The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. Elements of decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events." A living wage is also very different from the local legal minimum wage.

1. Have you adopted a living wage definition similar to the above? If so, what is it? Have you developed a policy/commitment with regard to this living wage matter (public commitments, accreditation as a Living Wage Employer, etc.)?
   Please note that answers to the following questions should include information specifically related to a living wage, as opposed to the minimum wage required by local law. If you have not yet committed to a living wage, please skip to question 7.
2. Based on your definition of a living wage, have you begun to calculate its amount and what methodology do you use? If so, in which region(s) and across what scope (employees, freelancers, smallholders, etc. and/or suppliers'employees)? What sort of information do you publish on the matter?
   Have you identified any gaps between the minimum wage and the living wage?
3. Can you describe any actions taken to implement a living wage? (e.g., Developing internal management and training focused on a living wage; engaging with social partners and/or suppliers; improving purchasing practices; promoting freedom of association and collective bargaining, etc.).
4. How do you measure the implementation of living wages for your employees and suppliers? Please provide details of how any independent audits have contributed to monitoring.
5. Have you identified any hurdles liable to prevent the payment of a living wage to your employees and your suppliers' employees (e.g., in countries with less stringent rights and regulations with respect to labelling)? If so, what do you do to overcome these hurdles?
   Bonus question: Do you release the results of any studies you have conducted and have you established a whistleblowing system for your employees and suppliers?

Question 7

1. In France,how many funds are available to your employees through your employee savings funds, excluding employee shareholding plans? How many andwhich funds available to your employees are labelled as socially responsible? (Please provide their name and the name of the relevant label.) What is the total value of assets invested per fund?
   Please also state the overall value of assets invested and the value of assets excluding non-labelled shareholding.

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You may use the table in Appendix 4 to clarify your answer.

On average, are the matching contributions offered to your employees through your labelled funds higher than the contributions provided for your other non-labelled funds, excluding employee shareholding?

1. For any funds that are not labelled but which incorporate ESG criteria, please explain to what extent these criteria reflect a reliable, selective ESG approach. (Please indicate the selectivity rate and/or the theme of these funds.)
   Do you and the social partners have any plans to increase the number of labelled funds over the next three years?
2. How do you involve social partners in the process of choosing sustainable funds (e.g. training, experts to guide employees, time granted to social partners to review the choice of sustainable funds)?
   How do you involve social partners in the process of checking the sustainable commitment of funds (training for members of the supervisory board beyond the three days required by law, establishing an employee savings committee, etc.)?
   3. Governance

Question 8

The Board of Directors must be fully involved in the choices made to promote good tax citizenship (aligned with principles such as those of The B Team initiative) to ensure that the business's fiscal responsibility is in line with its social responsibility. Accordingly, the FIR expects that a public fiscal responsibility report - reviewed and signed by the Board of Directors and detailed country by country - exists and is aligned with Global Reporting Initiative (GRI) 207.

1. Do you publish a charter detailing your commitments in terms of fiscal responsibility with respect to fiscal practices deemed unacceptable, tax havens, etc.? How often is this document reviewed and approved by the Board? How does the Board oversee the application of this charter?
2. Do you publish your fiscal reports country by country for all countries of activity, i.e., exceeding the standard requirements of the EU directive, which applies only to reporting for EU Member States and countries included in the list of non-cooperative jurisdictions? If not, please explain why. Does the Board discuss the distribution of taxes country by country?
3. Can you explain your effective tax rate for 2023? To what extent is this consistent with your commitments in terms of fiscal responsibility?
   Specific attentionwill be paid to companies with a particularly low tax rate (less than or equal to 20%) or a particularly high tax rate (around 30%).
   Question 9
   Given that registration in the European Union Transparency Register and the Register of Interest Representatives compiled by the High Authority for Transparency in Public Life (HATVP) in France is mandatory, the FIR has access to your declarations (human and financial resources, area of interest).
   We would like your answers to the following questions to focus on the lobbying you have conducted (headquarters, subsidiaries, professional associations, or consulting firms) with respect to Environmental, Social, Governance (ESG) issues. We would like to clarify how lobbying is aligned with sustainability targets and how your lobbying practices are integrated into your group's Corporate Social Responsibility (CSR) strategy.

1. What are the main lobbying initiatives (e.g., Top 3) that you prioritise in keeping with your material ESG challenges? Please indicate all jurisdictions in which you conduct this lobbying.
2. How do you ensure that your ESG targets are in line with the positions of professional associations? How do you deal with any potential discrepancies (e.g., by seeking to realign positioning of associations with your own ESG targets or

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brainstorming ways to leave a professional association that is clearly not compatible with your ESG strategy)? Do you publish any information on this alignment or cases in which positions differ?

1. What role does the Board of Directors play in the application of your lobbying policy (e.g., lobbying activities, budget, meetings)?
2. Do you train people inside or outside the company (e.g., employees or consultants) in responsible lobbying? If so, what criteria do you apply in selecting the firms with whom you work?

Question 10

1. How many Board Directors have CSR expertise? Who are they and how did they acquire these skills (studies, training, professional experience)? Is their expertise specific to the challenges of your industry (biodiversity, energy transition, social issues, value chain, financial impact of climate change, etc.)?
   Do you publish a specific skills matrix for each Board member?
2. How do you ensure that Board members stay up to date with CSR issues (internal or external training, talks by independent experts, refreshers on the latest regulations and key themes, etc.)? How often?
3. How do you assess the CSR skills of Board members? What are your assessment criteria? How often do you assess? Do you conduct individual or group assessments?
4. Is CSR part of your selection criteria when appointing new Board members?

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Answers

Environment

Question 1

1. Could you reiterate your short-, medium- and long-term decarbonisation targets for each of your three scopes (in terms of both your absolute value and intensity-based targets)? Please clarify the key initiatives you are planning to meet each goal (including the percentage contribution of each initiative to each goal).
   What proportion of your strategy is dedicated to negative emissions (e.g., absorption and storage), emissions prevented and carbon credits (as distinct from your decarbonisation targets)?
   You may use the table in Appendix 1 to clarify your answer.

In 2017, L'Oréal set decarbonisation targets in line with the 1.5°C scenario (under Scopes 1 and 2) and approved by the SBTi (Science Based Target initiative). The Group is committed to reducing CO2 emissions for Scopes 1, 2 and 3 by 25% in absolute terms by 2030, compared with the 2016 baseline.

In accordance with the latest requirements of the Science Based Targets initiative (SBTi) Net-Zero standard, in October 2023 the Group submitted its new 2030 and 2050 decarbonisation plan. The Group's revised target was an opportunity to update the baseline year to 2019, in line with the other targets of the L'Oréal for the Future programme. These new targets, approved by the SBTi mid-April,break down as follows:

• In the short term, by 2030, the goal is to achieve a 57% reduction for Scopes 1 & 2 and a 28% reduction for Scope 3 (in GHG Protocol categories 3.1 Purchased Goods and Services, 3.4 Upstream transportation and distribution and 3.6 Business Travel) in absolute terms from the 2019 baseline;
• In the long term, by 2050, the focus is on reducing emissions for Scope 1, 2 and 3 by 90% in absolute terms from the 2019 baseline, while offsetting residual emissions to achieve net zero.

To meet these targets, the Group is leveraging several key areas to achieve decarbonisation, chief among which are:

• Scopes 1 and 2: L'Oréal aims to improve the energy efficiency of buildings, with renewable energy meeting
  100% of consumption needs on operated sites (factories, distribution centres, administrative sites and research facilities) as of 2025. By 2030, the Group will maximise the share of renewable energy in the mix of its stores and will continue to electrify its fleet of company vehicles.
• Scope 3 (categories 3.1, 3.4, 3.6):

1. Product design and development (Packaging and Formulas, which could account for around 35% of progress towards meeting the 2030 target)
2. • Packaging: Packaging represents a significant part of the GHG footprint of cosmetic products. Reducing this footprint is therefore a key objective in L'Oréal's decarbonisation process. In recent years, the Group has been working to reduce the intensity of its packaging, by optimising it (e.g., developing options for refilling, reuse, weight reduction and size increase) and increasing the proportion of recycled content.
     The 2030 decarbonisation plan for the Group's packaging will revolve around five main priorities:
   • • reducing the intensity of packaging (e.g., changing shape and reducing weight);
     • increasing the proportion and availability of reusable and refillable formats;
     • increasing the proportion of recycled content in products (particularly plastics and aluminium), where the carbon footprint of the recycled content is significantly lower than that of its virgin equivalent;
     • working with suppliers to source packaging materials with a low carbon footprint (e.g., low-

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carbon aluminium);

• • researching ways to reduce the impact of finishing techniques (e.g. metal plating) and encouraging suppliers to adopt - on a large scale - techniques with a lower environmental impact.
• Formulas: L'Oréal has been working on the environmental impact of its cosmetic products since
  1995, when the Group acquired its first environmental research laboratory to assess and reduce the environmental footprint of its formulas. Right from the design phase, raw materials used in the formulation of products are evaluated as part of a strict ingredient selection process.
  In recent years, L'Oréal has focused its decarbonisation on removing and changing ingredients, as part of its worldwide target of 95% of ingredients in formulas to be biobased, derived from abundant minerals or from circular processes.
  To reach its 2030 target, L'Oréal will prioritise the decarbonisation of raw materials in four main areas:
• • reformulating products - abandoning ingredients that come from petrochemicals in favour of natural ingredients and replacing ingredients linked to high intensity carbon emissions;
  • studying ways of reducing the impact linked to gases found in the aerosols in its portfolio, in particular gases with strong global warming potential (either by replacing them with other propellants, or changing the format of the products);
  • reducing the impact of palm and soya derivatives used in its products by taking action against deforestation, and by encouraging its upstream suppliers to adopt sustainable and regenerative agricultural practices;
  • working with its suppliers on the supply of raw materials with low carbon impact, on the energy efficiency of their own production and the use of renewable energy where possible (see § supplier decarbonisation).

1. Digital marketing and POS material (which could contribute around 15% to the 2030 target)
2. • • Digital marketing: The carbon footprint of L'Oréal's digital marketing comes mainly from emissions linked to the production and transmission of its advertising content.
       The Group has done a great deal of work to measure impacts relating to content production and digital media activation and prioritises the integration of the footprint of its paid influencers.
       To reach its 2030 target, the Group will step up its efforts to reduce impact, in particular:
     • • producing more responsible advertising content, reducing emissions linked to travel and filming locations;
       • increasing the utilisation rate of the content produced;
       • reducing the impact of the transmission of its advertising content by using optimisation drivers in digital media, such as adjusting the resolution of creations according to the type of device on which they are broadcast, the asset length of each platform, and media planning;
       • more broadly, working with its suppliers (including its influencers) towards reducing their emissions (see § supplier decarbonisation).
   • POS material and advertising components: As part of its L'Oréal for the Future programme, the
     Group is working to improve the environmental footprint of its advertising materials for points of sale, by gradually increasing the proportion of material that complies with eco-design principles.
     To reach its 2030 target, the main areas for decarbonisation will consist of:
   • • overhauling its POS, broadly applying its eco-design guidelines to lighten its creations, move to single-material content and reduce waste;
     • using more recycled materials for display materials;
     • continuing to reduce electricity consumption linked to permanent point of sale displays, by optimising them and benefiting from the positive impact of its retail partners' switch to

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renewable sources of electricity.

1. Logistics flows with suppliers and retailers (which could contribute around 10% towards the 2030 target)
2. • Logistics: L'Oréal has long been committed to reducing the emissions generated by the transport and storage of its products. Its 2030 programme is built around the following main pillars:
   • • reducing air transport by prioritising local production as much as possible, by adopting multi-sourcing approaches in the Divisions and optimising planning with a shift from air freight to rail/maritime;
     • rolling out our new solutions to promote as much as possible multi-modal transport (moving from road to sea, road to rail, for example);
     • optimising the load factor (particularly on road freight in Europe and North America);
     • using fuels with the lowest emissions (for example biogas, biofuel vehicles, SAFs or fuels with low carbon content for maritime freight, and electric vehicles and cargo bikes for the "last mile");
     • encouraging upstream and downstream suppliers to reduce their emissions from transporting products, particularly by developing pilot programmes for the adoption of battery electric vehicles for long distances.

1. Business travel (which could contribute around 5% towards the 2030 target)
2. • L'Oréal will continue to reduce all emissions related to business travel by implementing an improved mobility policy.

1. Other areas of decarbonisation (which could contribute around 5% towards the 2030 target)
2. • Other areas of decarbonisation will contribute to reaching the 2030 target. This includes decarbonising the energy mix in countries in which L'Oréal and its suppliers operate.

1. Supplier decarbonisation (which could contribute around 30% to the 2030 target)
2. • The Group's total footprint is mainly linked to the impact of business activities of its suppliers across all Group purchasing categories.
     Since 2007, the Group has involved its strategic suppliers in the process of measuring and reducing its greenhouse gas emissions by encouraging them to participate in the CDP Supply Chain programme.
     This ongoing work is essential to the full decarbonisation of the Group's value chain. In the future, the Group's main objective will be to work with strategic suppliers, not only to reduce emissions linked to their Scopes 1 and 2 but also to their Scope 3. Its main areas of work are as follows:
   • • continuing to train and support its strategic suppliers in order to raise their awareness of climate change challenges;
     • continuing to support its strategic suppliers in identifying the main decarbonisation drivers in their business sector, by studying ways to accelerate their progress and by taking measures to promote the reduction of their emissions;
     • setting new expectations for its suppliers, so that they can develop their own climate transition plans, including Science Based Targets (or equivalent strategies to reduce emissions);
     • boosting the transparency and monitoring of the emissions of each supplier/product in order to monitor progress and stimulate change.

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1. Could you also indicate the amount of investment necessary for each of the actions implemented across your three scopes? Please indicate the time horizon for each of these investments.
   The information required here is different from the amount of CAPEX/OPEX aligned with EU Taxonomy, which covers only investments in your sustainable activities and excludes those related to your overall decarbonisation plan.

The new Net-Zero trajectory was submitted to SBTi for validation in October 2023, as specified in the 2023 Universal Registration Document filed with the French Market Authority ("Autorité des Marchés Financiers") on 19 March 2024.

The SBTi confirmed mid-April that L'Oréal's short-term and long-term decarbonisation targets, as detailed below, had been approved.

Financial forecasts will be published in detail next year in the 2024 Universal Registration Document, in line with the new CSRD framework.

1. On which reference scenario(s) is your decarbonisation strategy based (for the three scopes)? Is this in line with a 1.5°C scenario? Has it been approved by an independent third party such as the SBTi or ACT-
   ADEME?

Please provide the name of the reference scenario(s) and the reference organisation(s) (e.g. IEA, IPCC, etc.).

In 2017, L'Oréal set decarbonisation targets in line with the 1.5°C scenario (under Scopes 1 and 2) and approved by the SBTi. The Group is committed to reducing CO2 emissions for Scopes 1, 2 and 3 by 25% in absolute terms by 2030, compared with the 2016 baseline.

In accordance with the revised requirements of the Science Based Targets initiative (SBTi) Net-Zero standard, which is based on the International Panel on Climate Change (IPCC) special report on the impacts of global warming of 1.5°C (SR15, 2018), the Group re-submittedits new 2030 and 2050 decarbonisation pathway in October 2023. On the date the Board of Directors approved the Management Report, L'Oréal was awaiting the SBTi's approval of this new pathway. It will be published in detail in the 2024 Universal Registration Document.

The SBTi confirmed mid-April that L'Oréal's short-term and long-term decarbonisation targets, as detailed below, had been approved.

The Group's revised target was an opportunity to update the baseline year to 2019, in line with the other targets of the L'Oréal for the Future programme. These new targets, approved mid-April by the SBTi, break down as follows:

• A short-term reduction (by 2030) of 57% for Scopes 1 & 2 and a 28% reduction for Scope 3 (GHG Protocol categories 3.1 Purchased Goods and Services, 3.4 Upstream transportation and distribution and 3.6 Business Travel) in absolute terms from the 2019 baseline;
• A long-term reduction (by 2050) of 90% in absolute terms for Scopes 1, 2 and 3 from the 2019 baseline, with residual emissions offset to reach net zero.
  Question 2
  There is still insufficient consideration of biodiversity-related risks, impacts, dependencies and opportunities in companies' business activities (internal operations, supply chain, products, customer services, etc.). However, the context and the tools (e.g. TNFD, SBTN, GRI) are improving, as are related practices.
  This issue may seem somewhat immaterial for some sectors. However, we feel it nonetheless warrants an analysis by all parties.

1. Have you taken any steps to assess, monitor and reduce your dependencies, your risks and your footprint while also exploring your opportunities (investment in projects that have nature-positive impacts, services that promote biodiversity, etc.) with respect to biodiversity and nature?

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