Strategy

The L’Oréal Group’s ethics policy: a first for Europe

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Emmanuel Lulin

In January 2016, Emmanuel Lulin, Senior Vice President & Chief Ethics Officer of L’Oréal, became the first European senior executive to receive the Carol R. Marshall award for Innovation in Corporate Ethics. Read on to learn about his strategy to make L’Oréal a global model in corporate ethics.

Blazing the trail in Europe

Taking as its starting point the principle that ethics precedes law, L’Oréal refused to wait for national and European rules to be imposed before tackling the question of corporate ethics. “L’Oréal takes a conviction-based, proactive approach – we do not merely react to problems when they occur”, begins Emmanuel, recalling the Group’s core values of integrity, respect, courage and transparency. The Group has founded its ethics culture upon seven pillars: freedom of expression for everyone, good organisational justice, internal information-sharing, clear expectations, top-down leadership, local management and trust between teams. “These pillars ensure that our ethics policy is properly disseminated throughout the Group”, he explains. In practice, this approach translates into systematic audits of the Group’s six to seven thousand suppliers. The Group’s own plants and production facilities all have to meet the same international standard (SA 8000), and one hundred or so of them are also externally audited. “This enables us to draw up a risk map to flag issues that could potentially cause problems in different countries”, says Emmanuel.

Free speech and accountability

Employees are not so much obliged as encouraged to embrace L’Oréal’s ethics culture. Self-assessments allow managers to evaluate their working environment, the challenges they are facing, and where they stand compared with risk assessments. First introduced two years ago, the assessments are now being used in over 80 countries. “We realised that managers are more than willing to share their results. This promotes valuable dialogue within management committees”, Emmanuel explains. Employees are also made accountable through an e-learning platform that provides individual online courses based around light-hearted scenarios covering topics associated with L’Oréal’s Code of Ethics. “Some countries have hit 100% enrolment”, says Emmanuel with satisfaction.

Global events are also used to promote engagement. The biggest is the Group’s annual Ethics Day, when L’Oréal’s 83,600 employees get to ask their questions to CEO Jean-Paul Agon, who answers them directly. The event takes the form of an online chat, with multiple sessions organised for different time zones. “Half of our workforce took part in one of the most recent Ethics Days and raised over 4,000 questions”, says Emmanuel. More local questions are addressed in a webchat held on the same day with Country Managers. The next Ethics Day is scheduled for October, 13th.

A culture of integrity that speaks to everyone

How does L’Oréal promote its ethical vision worldwide? In the first place, by taking a multilingual, multicultural approach. The Group has set up a whistleblowing system available in 26 languages so that people can report concerns specific to individual countries and their cultural particularities. The Code of Ethics has been translated into 45 languages as well as braille, so everyone can read it in their native language.

L’Oréal has also appointed more than 70 ethics officers worldwide. Drawn from every business function, from Communication to HR, Finance and Operations, these individuals provide advice and guidance. “They are the ones who raise – and do their best to answer – the awkward questions”, says Emmanuel. And then there are the Ethics Cafés, where a senior colleague and an outside expert chat with employees about different topics, from diversity and harassment to privacy, big data and conflicts of interest, through the prism of ethics.

The last word

Emmanuel sums it up: “How we do things is as important as what we do. We believe that having a strong culture of integrity can create value within the business. To achieve our goal of adding one billion new consumers worldwide, we have to be an exemplary company, especially if we want to reach out to emerging countries, some of which face issues of human rights and corruption in business practices”.

On the strength of this policy, L’Oréal has been named for the seventh time one of the most ethical companies in the world by the Ethisphere Institute.

CSR | October 2016