Within its responsibility to ensure the respect of human rights in its global supply chain, L’Oréal took the commitment to pay a living wage to all its employees by the end of 2020 and to enlarge this payment of a living wage to the employees of its strategic suppliers by 2030.

A responsibility to respect human rights

L’OREAL announced already before 2020 that ‘within its strive to bring beauty to all, it had a clear responsibility to ensure the respect of human rights within its supply chain’, a commitment that is reflected in its Code of Ethics and present in the Group’s human rights policy adopted in 2018. L’Oréal also took a series of initiatives for responsible sourcing, fighting against discrimination at work, inclusive training and hiring of people at risk. At the beginning of 2020, it took major steps to bolster its human rights progress through its new employee human rights policy.

A public commitment to pay a living wage

It is at that time that L’Oréal started its partnership with the Fair Wage Network. Our work consisted in helping L’Oréal to define its living wage policy, and then to provide all the necessary living wage data so that L’Oréal could start comparing its own employees’ wage data to the FWN living wage thresholds. it took the important public commitment to pay all its employees (more than 85,000) at least a living wage in 2020:
‘Receiving a fair remuneration for one’s work is a human right. The idea is that all workers and their families should be able to afford a decent, even if basic, lifestyle, one that is not necessarily secured by national minimum wages’ [1].

A commitment extended to its strategic suppliers by 2030

Another impressive step forward consisted for L’Oréal to expand this commitment to all the employees of its strategic suppliers as part of L’Oréal for the Future.[2] Strategic suppliers responded to this call. As an example, Firmenich, L’Oréal number one Fragrance house Supplier, also committed publicly to pay a living wage.[3]
Since then L’Oréal acted as a leading voice in this area, by stimulating many other brands to take similar commitments through bilateral cooperation and within International fora like the UN-Global Compact, the OECD (Business for Inclusive Growth B4IG) and among other stakeholders’ fora.[4]

[2] For Alexandra Pratt, Chief corporate sustainability officer at L’Oréal: ‘This would lead to a huge transformation of our suppliers’ business model, will question their way of doing, but to achieve this we need to cooperate with other companies and on a large scale’. https://www.youtube.com/watch?v=w-eo-h67Krc
[4] L’Oréal supported B4IG resolution on the living wage as a corporate priority: https://www.b4ig.org/wp-content/uploads/2021/06/B4IG_BM_20210621_PR_ENG_CP.pdf

A methodology and a process to reach the target

Not only L’Oréal took a public commitment to pay a living wage but it immediately put in place a multi-step process to implement it, by following the FWN data and methodology. Moreover, the fact that L’Oréal decided to reach the defined target on both fronts at the same time, for both own employees and employees of strategic suppliers, is an additional sign of its determination to succeed.
To facilitate their understanding of this process, L’Oréal organized in 2022 training sessions for its strategic suppliers’ HR and Comp&Ben managers while the FWN is providing them technical support to get access to the living wage data and to carry out a living wage gap analysis. Remediation activities will also be organized to help them filling the eventual gap.

A process endorsed and communicated by the top management

Since the beginning of its living wage journey, the process benefitted from the support of the top management with the CEO also repeatedly emphasizing the importance of this commitment for L’Oréal’s overall strategy and supply chain management. [5]

[5] For Nicolas Hieronimus, CEO of L’Oréal “In the current difficult global context, companies, more than ever, can and must take action to alleviate poverty. One way we can help mitigate inequality is by applying a Living Wage policy. First, we must apply it to our workforce but then also extend the principle to our supply chains. Living Wages help to improve the livelihood of our communities and also to significantly reduce the gender pay gap since the poorest workers are mostly women”, 21 June 2021, p.2 at https://www.b4ig.org/wp-content/uploads/2021/06/B4IG_BM_20210621_PR_ENG_CP.pdf

A living wage policy accompanied by other Fair Wage developments

Along its commitment to pay a living wage, L’Oréal is also ensuring that other fair wage practices are followed, like the absence of wage discrimination (article 3 of its Employee Human Rights Policy), but also freedom of association and collective bargaining (article 4), the decent number and payment of working hours (article 9), the payment of wages in time and in full (article 9), and the provision of benefits (parental leave; medical coverage etc.) (article 9), with the long term aim to somehow extend such fair practices to their suppliers.