1.1.3.4. Ethics, at the heart of the Group’s governance and commitments
L’Oréal has built up its business on the basis of strong ethical principles that guide its development and contribute to establishing its reputation: Integrity, Respect, Courage and Transparency. These principles underpin the Group’s culture and business model and its compliance, responsible innovation, CSR, philanthropy, Human Rights, and diversity, equity and inclusion policies.
L’Oréal’s commitments to act ethically and responsibly are set out in L’Oréal’s Code of Ethics. This document, available in 30 languages and as an audiobook in French and English, is made available to all employees worldwide. Country Managers (or for Corporate or Zone staff, the members of the Executive Committee to whom they report) are responsible for ensuring compliance with the Code.
1.2. The essentiality of beauty: supporting the growth of the beauty market
1.2.1. The essentiality of beauty
The desire for beauty is a universal aspiration that transcends time, borders and cultures. Beyond appearances, beauty is a journey that shapes our identity, individually and collectively. From the dawn of humanity to the metaverse, no human culture has existed without cosmetics.
Beauty regimes are an integral part of personal care and also play a role in social interaction. Personal hygiene rituals are a part of our lives from birth until death. All the major stages of life, whether individual or collective celebrations such as birthdays, weddings, births and coming of age ceremonies, with the first shave or application of makeup, are all marked by beauty rituals. Beauty is more than an individual quest; it is a social balm. It connects us to ourselves and to others.
Beauty and health are intimately related. Nearly two billion people(1) suffer from skin problems. The beauty industry plays a key role in preventing skin conditions such as melanoma (saving $250 million a year in the US alone(2)), and in effectively treating other skin conditions such as acne and eczema, which can have a detrimental effect on well-being and mental health.
Beauty gives us a sense of belonging to a community: there are conventions in beauty, makeup and clothing. It is a means of integration, but also of expressing difference. Mastering the language of beauty is a social asset. Beauty plays an important role in self-affirmation and identity: it builds confidence and enhances well-being. It reflects societal changes: it has always accompanied transformation, whether in terms of hair length or attitudes to makeup. It defies norms and stereotypes.
For several years now, we have been living in the era of “social beauty”, connected and shared, with the ubiquity of digital technology and social networks acting as a formidable accelerator for the beauty market. First, because the proliferation of tutorials and virtual trials is facilitating the adoption and correct use of beauty products. Furthermore, because buying products online has never been easier, the growth of e-commerce allows us to reach more consumers, well beyond the traditional retail sector. E-commerce now accounts for a quarter of beauty product sales worldwide, accelerated by the Covid-19 crisis. It will be the main distribution channel of the 21st century, and has immense potential for development in many countries.
Focused on consumers, L’Oréal acts responsibly throughout the value chain, driven by excellence and technology that enhances its innovation, production and logistics management capabilities. New solutions are being developed to respond specifically to the new challenges of personalisation expected by consumers, and of flexibility and traceability.
1.2.2. The beauty market, rapidly expanding in an ever turbulent macroeconomic environment
Important: the competitive positions and market shares held by the Group’s Divisions and brands mentioned in this Document are based on studies, panels and polls obtained from specialised organisations and companies, or, in the absence of comprehensive studies, are the result of estimates made by L’Oréal on the basis of available statistical data.
The beauty market is set to continue growing, driven by the same economic, technological, demographic and sociological changes that have been taking place for several years, notably the rise of the middle and affluent classes(3), and in particular the incredible appetite for beauty among younger generations on the Asian continent.
British Journal of Dermatology (2015).
National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP) – Health and Economic Benefits of Skin Cancer Interventions.
According to World Data Lab, 800 million people will join the ranks of the world’s middle class by 2030.
ESTIMATED VARIATION IN THE WORLDWIDE COSMETICS AND BEAUTY INDUSTRY FROM 2000 TO 2023(1)
The beauty market continues to distinguish itself as a dynamic sector, driven by constant innovation and sustained demand for high-quality, high-performing and meaningful products. Worth more than €280 billion in 2023(1) the beauty market has proved resilient, adaptable and prosperous, despite the geopolitical and economic upheaval surrounding it.
This industry benefits from many key growth drivers, including:
the increasing global population and the emergence of middle classes(2);
strong growth in the economies of emerging countries; and
the quest for quality and continued premiumisation (expectation of products with high added value).
The cosmetics consumer always looks for quality and puts a premium on trends, new ideas, or leading‑edge technology.
THE GLOBAL ESTIMATED COSMETICS MARKET IN 2023: > €280 BILLION(1)
BY GEOGRAPHIC ZONE
BY PRODUCT CATEGORY
