To what extent has L’Oréal been able to

improve its reputation through Corporate

social responsibility (CSR)?

Topic: the implementations of CSR methods used to improve the reputation of L’Oréal

Subject: Business and Management (HL)

Wordcount: 3887
Table Of Contents

Abstract 2

Introduction 3

Brief about L'Oréal: 3

What does L'Oréal do? 3

Defining Corporate Social Responsibility (CSR): 4

Methodology 6

The analysis of CSR Methods 7

Importance of Reputation through CSR methods: 7

L'Oréal commitment to the CSR: 7

Importance of sustainability: 10

L'Oréal and its sustainability 11

Changes of CSR methods 18

Competitors based on CSR efforts 23

Estee Lauder and L'Oréal 24

Boston matrix of L'Oréal and Estee Lauder 26

Long term implications and short term challenges 27

Conclusion 29

Bibliography 31

Appendices 36

1
Abstract

The purpose of this extended essay is to provide information about L’Oreal and how it

uses its CSR methods to improve its reputation which will be done by answering the

research question “To what extent has L’Oréal been able to improve its reputation

through Corporate social responsibility (CSR)?”. The report highlights key concepts of

how committed L'Oreal is through the sustainability programs and their social profile

based on their financial report. Furthermore, their sustainability programs increase their

reputation through their social profile which increases social marketing.

The dominant data was used from L’Oreal’s progress and financial report to determine

the usage of their figures, sales and their improvements and this is cross-referenced to

their webpage. Moreover, multiple data from many articles were used to find the

changes in their CSR methods and how L’Oreal overcame the controversial problems

they have faced.The firm was also compared with another competitor to show the

difference in CSR methods and show improvements of L’Oreal in conjunction with Estee

Lauder. In conclusion, the results showed a finding of L’Oreal being a highly improved

company based on their CSR efforts to improve their reputation through social

marketing, sustainability and is proven by their market share and the policies

implemented.

A conclusion was reached that the CSR policies implemented by L’Oréal have

contributed significantly towards the improvement of its reputation and an increase in its

market share and an improvement in its financial position.

2
 1.Introduction

Brief about L'Oréal:

L'Oréal is a French-based multinational company headquartered in Paris and produces

hair colors, skincare, perfume to makeup, and styling products. L'Oréal entered in 1909

with first launching its hair dyes in the market and is recognized by its globalization and

respects differences in tradition.

L’Oreal has established itself as the market leader in selling cosmetics to both men and

women worldwide while striving to achieve good quality, efficacy, and safety which also

shows their commitment towards the consumers and society as a whole.

L'Oréal has 85,400 employees and 27.99 billion dollars in sales in 2020 with over 150

countries having seen an increase (2020 Financial report). The pandemic interrupted

their figures as their sales dropped by 8%. In 2020 L'Oréal aims to spread awareness

by launching a program in the spring of 2021.

What does L'Oréal do?

The subject of L'Oréal and being ethical has always been an interest as I own products

that are sustainable to the environment and are also from L'Oréal, in this generation,

there is more action taken for this environment and it is also my role to act sustainably

towards the environment which is why I chose to base my EE on the ethical

implications. I tend to use sustainable products which helps environmentally and

3
socially as nowadays many companies especially in the cosmetic and fashion industry

does not follow the human right and continue to exploit their employees lower than the

minimum wage and using child labor. I also would like to look into L'Oréal as I tend to

recommend their safe products to other customers that are also looking into sustainable

products and to investigate this extended essay the research question is “To what

extent has L’Oréal been able to improve its reputation through CSR?”

Defining Corporate Social Responsibility (CSR):

CSR is defined as an ethical/moral principle that elevates decision making and strategy,

it helps balance the right or wrong a business action is taken from a society point of

view and acts morally towards internal and external stakeholders (Paul Hoang). It is the

consideration of ethical and environmental plays relating to the production of products.

In order to have a high reputation the business should have spread its programs and

services to maintain a CSR company that customers are aware of. According to Forbes,

many successful companies used CSR to gain customers for their loyalty which benefits

socially and the company. A business that is committed to CSR attracts more customers

by their brand image and helps their channel of distribution to be more productive and

positive which promotes motivation for their employees. Businesses that focus on social

responsibility are able to increase the audience's attention.

4
L'Oréal has promoted embracing CSR in the 1980s by introducing health and safety at

work acts or environmental laws to increase their social awareness. This research

question also gains insight how CSR is important in the beauty industry as trends have

been focusing on environmental and social issues and other cosmetics brands like

Adorn cosmetics and Aesop have recently stopped animal testing to take interest in

wider social issues which can increase profit margin. The use of social marketing has

been very successful in the beauty industry as many campaigns are used to market the

brand’s products. Recently the cosmetic industry has been criticized for its unethical

source of ingredients and has been a big issue ever since 2019, which lead to being an

important problem in society which is why this investigation is important to determine

how ethical L'Oréal is.

5
 2.Methodology

The majority of the data that will be in use for this report is secondary sources of

websites, articles, case studies, and books which will organize the report and draw the

conclusion out. For example, the 2019 progress report will be giving me details about

sustainability and care for their environmental and social profile supported by data and

figures. Moreover, secondary sources will be reliable as cross-references with several

other sites will be done to make the report reliable while also using articles to gain

insights on a direct perspective of how L'Oréal uses the CSR policy to increase their

reputation while gaining their revenue. Websites to cross-reference will be Forbes and

Talko relating to the problems L'Oréal has faced.

Each source will give information about what L'Oréal has done and their programme

and how did increase their reputation and their revenue from it from their 2017-2020

financial and sustainable report, a comparison between their time when they haven't

applied the CSR policy and now products they used to increase social awareness will

be done and how they used social media to broadcast it in order to gain revenue from it.

Moreover, this report will be showing how L'Oréal uses CSR to improve its reputation

and help answer the research question.

6
 3.The analysis of CSR Methods

Importance of Reputation through CSR methods:

L'Oréal builds their products and sustainability in order to increase their reputation and

equity, L'Oréal has always been tive with their CSR methods in terms of awareness and

programmes that not only benefits the employees but also reinvent products that are

environmentally friendly. This also helps to achieve a positive community space for

stakeholders leading to better reputation and as well as financial reputation among the

business internally and externally.

L'Oréal commitment to the CSR:

L'Oréal has created a sustainable program called ‘Sharing beauty with all’ which was

launched in 2013. Changes include differences in product design and distribution,

furthermore, the source of their raw materials has changed to improve their CSR

methods towards their employees which could improve the employee productivity and

morale and motivate them further to work towards improving the reputation of L'Oréal as

well L'Oréal also maintains its commitment to its stakeholders and prompts diversity and

inclusion for all. As part of 2015 L'Oréal is proud to declare they have contributed to 14

of the 17 sustainable goals by the UN (L'Oréal). This positive publicity can help to

improve the reputation amongst all stakeholders especially when the word of mouth

spreads through all methods of social media.

7
As part of the commitment to CSR, Jean-Paul Agon the chairman and chief executive of

L'Oréal has stated that their goals are to reinvent the way they run their business by

spanning the value chain. 85% of their new products received positive reviews on social

and environmental factors (2019 Financial report). L'Oréal has also been evaluating its

suppliers based on 5 topics: the quality of the products, innovation, supply chain,

service, and competitiveness. These help ensure that the sources and materials L'Oréal

uses are environmentally and socially responsible for all stakeholders and they are

committed to sustainability.

In the EU, regulations/laws are often decided by the health authorities from the

European Commission as well as the European scientific committee for consumer

safety, they check up on the products that L'Oréal sells to keep the codes of ethics safe.

This helped increase CSR efforts and reputation. L'Oréal also removed ingredients in

2004 and improved their formulas which in 204 countries started to eliminate all plastic

microbeads which end in 2017(Inside our products).

Table 1: Table of CSR policies L'Oréal has implemented

Date CSR policy

of implementation

2002 L'Oréal Buy & care: This policy introduced daily consumers

with ethical values and it helped set a procedure for L'Oréal.

This is measured by ethical, social, and environmental criteria, it

has been carried out through the supply chain and allows

8
 respect of human rights, training, and a “Solidarity sourcing” (a

program created), which takes responsibility for the consumers.

(L'Oréal)

2010 “Solidarity sourcing”: This program was introduced for social

inclusion, in 2018 234 projects were released where 56, 842

people took part including people with special needs. L'Oréal

has also introduced to suppliers on their programs and 13% of

their suppliers have deployed them and their goal for 2020 is to

increase it by 20%. This policy was not recognized by

consumers as this was an internal change however this

improved their goals based on CSR. (L'Oréal)

2012 L'Oréal created a materiality analysis to understand the

sustainable development issues from internal and external

stakeholders which helps them improve the issues that they

face and overcome them. In 2016 they updated its matrix and

highlighted 10 more issues to cover in order to follow the CSR

methods.

2013 Sharing beauty with all: based on a single conviction to impact

on the value chain and introduce every business line and

product. From research operations to marketing to improving

9
 communication with the customer, this eventually helped

relation with consumers increasing their reputation.

2017 Human rights policy: Using the UN standards of Human rights

policy, they have added it to their pre-existing employee human

rights policy which assures the social standards for the staff

who produce the products.

2020 Prioritizing learning and development: L'Oréal has

committed to ensuring that 100% of their employees would

have one training session by 2020 which has now grown by

88% with an online training portal (MyLearning)

(Source: My learning, L'Oréal )

Importance of sustainability:

According to Harvard Business School, it is crucial to set a sustainable business

strategy that would make an impact. To ensure the value chain follows CSR, companies

like L'Oréal have designed a new package with an environmental mindset to ensure that

the product and chain are sustainable.

10
L'Oréal and its sustainability

Looking at L'Oréal’s 2019 annual report, sustainability to them is “evaluating the

environmental and social profile for all of its products”. L'Oréal has been assessing the

environmental and social impacts to improve their approach to it.

L'Oréal has improved 85% of the biodegradability of their products to natural

microorganisms and reduced their water footprint by 46% from the aquatic environment

which has been benefited by the consumers. This has enabled L'Oréal to be one of the

highest levels of performance on sustainable water management which was conducted

by CDP improving its reputation and improving the brand image. This has also improved

their reputation by their renovated products and increased their social profile by 40%

(2019 progress report, L'Oréal) .

To maintain a sustainable firm, in 2014-2016 their packaging and research team used

the sustainable product optimization tool (SPOT) which evaluated the social and

environmental profile of the brand to see the assessment of impacts. Using the SPOT

tool, in 2019, 2,180 products were completely redesigned to reduce the social and

environmental impact in order to maintain the CSR policy, and is starting to display the

tool to inform consumers about its products background. This will enable consumers to

assess their products and increase their reputation through social marketing. Packages

also stated their source of material which consumers have acknowledged the sourcing

of the material in order to notify the awareness of product optimization.

11
L'Oréal has also increased customer awareness on social and environmental impacts

by more than 30% (L’Oréal, 2019 progress report) “sharing beauty with all” campaign

that was released in 2013. The environmental footprint was assessed and 57% of the

program was done by other companies. Another cooperation, La Roche-Posay has

been influenced by this campaign in which they released an action to prevent skin

cancer which helped their reputation to boost up amongst their consumers. The

Lancome brand has also been influenced by L'Oréal and created a campaign “Write her

future” which fights against English and literature for young girls and has supported up

to 13,000 girls to this date. L'Oréal uploads all its achievements relating to Social and

environmental changes on social media for its consumers to recognize and gain more

support and increase their brand image.

L'Oréal has taken responsibility for social aspects by introducing the “Solidarity

Sourcing” program” in 2010. This benefitted the suppliers to assess sustainable income

and fair trade, this helped many people in poverty to be employed and worked in fair

incomed labor which enabled 70,912 in 2019 to worldwide. L'Oréal has also increased

its reputation by including a global policy which was to promote people with disabilities

and L'Oréal was ranked the top 100 of promotional inclusion.

Finally, L'Oréal has prioritized their employees who benefited from health cover and

their ambition is to give their employees full access to health cover and financial

protection to have an improved working environment which reduces their social impact.

12
 L'Oréal has implemented a working sustainability program in which it helps to reduce

the environmental footprint in which 52 competitors have participated. This also satisfied

the employees needs by prioritising their physiological and esteem needs helping to

increase their reputation amongst the employees as well so that the motivated

workforce would further contribute towards L’Oreal’s success.

Overall L'Oréal has been improving their social profile by 40% through their renovated

and new products with an increase in the biogadability of their products. Moreover,

reducing their water footprint improved their brand image and helped their reputation

based on sustainable efforts. Furthermore with the use of social marketing, this

increased their social marketing as well as uploading their achievements for recognition.

Table 2: Types of stakeholders relating to L'Oréal

Table of stakeholders

Types of stakeholders Positive impact Negative Impact

Employees: Provided social protection This was only applied to 67

In 2012, L'Oréal included a and financial support of of the 150 countries which

program (Share & care) that security to stakeholders. benefited

has social/health protection L'Oréal has provided flexible

and a safe workspace for all hours for employees and

employees working. reinvented their working

environment into a dynamic

layout of spaces. Included a

13
 minimum of 14 weeks of

maternity leave, death or

other disabilities gained

security for families. This

allowed 63, 584 members in

low-income families to be

accessed to fair

employment.

Customers: A strategic way for satisfying Building a new marketing

L'Oréal has introduced the social market and hub increased the carbon

universalization that respects includes every customer's footprint for L'Oréal which

every different need, culture, preferences. This benefitted increased their CO2

and tradition. L'Oréal has all of the countries with 497 emissions. This also created

developed research and patents registered causing a an increase in costs as

marketing hubs for the US, positive reputation on social formulas in products were

Japan, Brazil, China, India, and change and inclusivity. redesigned and old products

South Africa. were wasted.

Chairman/CEO: As mentioned before 85% of This movement wasn’t

In the 2019 Progress report, their products were recognized by the public and

14
 Jean-Paull Agon mentioned remodified and now are many consumers did not

sharing beauty with all which produced sustainability while appreciate the efforts of

links to sustainable growth at increasing their sustainable growth

every value chain which is the environmental profile. The according to the CSR of

growth of the channel of reduction of CO2 emissions L'Oréal Alexandra Part.

distribution and improving their by 78% was also stated

environmental and social while increasing 37% of their

profile. He has also stated that production.

he worked immensely and

actively working with their

suppliers.

(Source: Student-Generated)

With stakeholder engagement this allows sustainable changes through programmes

and supports long term sustainability. Moreover, allowing stakeholders to be

empowered also increases the efficiency of the business as the groups engage in

programmes such as “share and care” which helps employees to to be motivated and

work harder thus improving their reputation through internal factors.

15
Figure 1: The graph showing the correlation between the importance of stakeholders
and the importance of L'Oréal’s activities

(Source: L'Oréal)

16
Looking at figure 1, cross-cutting issues such as human rights, business practices, and

governance issues have been of big importance for L'Oréal, this shows that the firm has

been working internally to improve their employees' access to thus increasing their CSR

methods has been proven. Another key point is the control of social and environmental

profiles has been of major importance towards stakeholders which helps all of the

stakeholders with being responsible towards the CSR methods. This has increasingly

improved their reputation by the actions L'Oréal has done as stated above, for example,

the share and care program or sharing beauty with all. As this graph is from 2016 and

from L'Oréal’s point of view, trends have changed. On table 2, it correlates the

importance of stakeholder on the graph as L'Oréal is putting the safety of the employee

forward which shows the importance.

Changes of CSR methods

As L’Oreal modifies their packaging to be more environmentally friendly some

ingredients in their packaging are not recyclable, as a result, they are not fully

eliminated from their Carbon Dioxide emissions. Before reinventing their products and

redesigning, L'Oréal has been faced with many problems about the ingredients in their

products, for example, cancer-causing agents, parabens, and many more. In march

2019 ethical consumers analyzed the harsh ingredients that were used which impacted

not only the consumers but was also banned from the EU and USA (“L’Oreal Eye

Makeup, Kids’ Shampoo Contain Cancer-Causing Chemicals - Safe Cosmetics”). This

proved to be a challenge for L’Oreal to show that it always strives towards achieving

good CSR practises.

17
Campaign for safe cosmetics has also supported ethical consumers that chemicals in

the products that L'Oréal sell include links to cancer and the CEO of the campaign for

safe cosmetics put pressure on L'Oréal to eliminate the chemicals that cause cancer for

the consumers. In the summer of 2014 Campaign for safe cosmetics also ran many

digital databases which show that the ingredients that are shown below are linked to

cancer.

Table 3: The ingredients listed that are not safe

The campaign of Safe cosmetics analysis of chemicals in L’Oreal’s products

List of ingredients found in L’Oreal’s Products that include the ingredients

product

Benzophenone-1 L’Oreal Colour Riche and Maybelline

Color Show nail polishes

Carbon black Eyeliner

Titanium dioxide eye shadows and Maybelline blushes and

pressed powders

Formaldehyde releasing preservatives (causes skin irritation and swelling of the skin)

DMDM hydantoin Kids shampoos

Imidazolidinyl urea mascaras, eye shadows, and both L’Oreal

and eyeliners

18
 Diazolidinyl urea facial toner and BB cream

Quaternium-15 Mascara

(“L’Oreal Eye Makeup, Kids’ Shampoo Contain Cancer-Causing Chemicals - Safe

Cosmetics”)

However, the federal law in the USA did not find irregularities and it did not ban the

ingredients listed in table 3 which makes it questionable that they are likely to cause

cancer.

Taking into consideration that the advertisements of their products are falsely advertised

with photoshopping effects, a lawsuit was brought that resulted in issues of

self-confidence in women. This drew back the movement of sharing beauty with all and

was sued by the FDA. Another false advertisement was regulated in China in June

2018. A news article from the campaign has stated that L'Oréal China has got a $28,

455 USD fine due to the false advertisement of the Biotherm product (Gu). The

advertisement led to almost 30, 000 posts discussed on the website which brought the

brand reputation down and the advertisement was withdrawn from society.

The reputation of this still remains on the internet and till today is brought up in many

articles such as the talko and Insider which is based on a woman who has faced many

skin damages due to the ingredients in L'Oréal. Their reputation from the ingredients,

advertising, and packaging has not impacted their sales/revenue since L'Oréal

dominates the global market share in the cosmetic industry. However, L’Oréal’s decision

19
making towards their allegations is quick which helps them to recover their reputation

for example after the false advertisement was immediately taken down. These sorts of

challenges do exist in real world and L'Oréal could try to mitigate these challenges by

further improving and implementing new CSR activities and also emphasizing the

importance of CSR to all their stakeholders both internal and external could improve

their reputation across the society and this will help them earn a good reputation across

the globe.

SWOT analysis of L'Oréal:

Table 4: The table showing the SWOT analysis

Strengths Weakness

1. High quality 1. Diversity and inclusivity

2. Sustainability 2. Profit margins

Opportunities Threats

1. Expansion in developing countries 1. Social media presence

2. Increase in customer awareness 2. Market trend

(Appendix 1)

20
Looking at Appendix 1, the majority of their strengths are based on their increased

profile in sustainability which means they have implemented acts of social marketing to

ensure the safety of their employees, they have also taken action into producing higher

quality while reducing their level of output in terms of energy. Quality would also include

a good reputation and the CSR activities would help to improve their quality and

reputation further as it becomes a socially responsible brand. This would help them

further to work on their strengths and improve on them further.

However, the inclusion and diversity of their products have been one of the main issues

on why their sales and profit margin are not increasing and as well as the new formula.

For example, their hair products are targeted at straight hair rather than curly hair. As

such targeting more consumer groups would be important and with a good reputation

surrounding CSR as well as its existence in the market for a longtime could contribute

towards greater market share and performance in the future and also make it easy to

introduce products for other customer segments not targeted before due to the good

reputation held in other segments. Moreover, their research and development have not

been proven to be effective because their profit margin is still the same (Kiesha frue).

Looking at the opportunities and threats, L'Oréal has recognized many sustainable

factors for their products but still faces the ingredients which are very volatile and

harmful which impact their reputation. With the CSR activities adding more value to their

brand they will find it easier to expand into developing countries.

21
Since social media is a growing trend it can be a weakness as the word can spread fast

about negative publicity but the CSR activities can actually make it an opportunity where

the positive image and reputation can be spread. Furthermore, consumers are

becoming more and more aware of what is going on and they have started to prefer

brands that practise CSR and as such CSR is a main part of any business that can add

towards better reputation and help to increase the market share further.

Competitors based on CSR efforts

Table 5: Implementation of CSR methods based on competitors

Competitor CSR efforts

Estee Lauder 1. Update of their code policy (2020)

Estee lauder worked with experts such as BSR, EcoVadis, and the

rainforest alliance to provide an equal and diverse workforce while

protecting the environment.

2. Pilot program (2020)

Using blockchain technology, Estee lauder was able to trace the

vanilla supply chain which validates quality to increase fair business

practices.

22
 3. NDPE policy

This policy analyzes the source of raw materials to implement an

ethical supply chain in agriculture, this is done by assessments

through suppliers and is reported on the annual report.

(Source: Student-Generated)

Estee Lauder and L'Oréal

L'Oréal is one of the dominant companies in the cosmetic industry with selling products

that are suitable for all levels of family income while Estee Lauder sells more high-end

products and is focused more on the make-up line rather than on spending costs on

skincare products. During 2014 and onwards both the brands have increased their

revenue, L'Oréal having 7.95% growth to $30.95 billion while Estee Lauder grew by

24.8% to $13.69 billion in 2020 (Statista). Although L'Oréal does have higher revenue,

Estee Lauder's percentage of growth is higher which shows the efficiency of their sales

is more productive.

According to the annual report in 2020, L'Oréal has a market share of 13% in the beauty

industry while Estee Lauder has a market share of 10.1% since 2020. Based on these

figures, L'Oréal dominates 2.9% more in the cosmetic industry and is able to receive a

larger customer base from the market. To support this based on their revenue, Estee

23
Lauder has 14.29 billion USD in sales while L'Oréal has 34.95 billion USD in sales

(Statista).

Looking at the ethical implications L'Oréal has not been using animal testing which

satisfies the social marketing aspects, this helps consumers to know that the products

that are used are coming from an ethically sourced channel of distribution. However,

Estee Lauder still tests on animals legally in China which impacts their brand image and

reputation as it does not act socially responsible. Thus the impact of this could also be

seen in terms of the revenue made by L'Oréal as compared to the amount made by

Estee Lauder (Statista).

24
Boston matrix of L'Oréal and Estee Lauder

Figure 2: The table of Boston Matrix

(Source: Statista, 2020 annual report, L'Oréal)

Figure 2 shows that Estee Lauder has a higher market growth rate with an almost 25%

increase which is stated from Forbes, this is good for Estee Lauder to have a long-term

survival in the cosmetic industry and is easier to receive new investments/assets from

different stakeholders. Although Estee Lauder has a lower market share than L'Oréal,

25
they still manage 10% of their market share in the skincare industry and are still

recognized by consumers. Moreover, L'Oréal has a high market share which allows

them to increase their supply chain and increase operations while gaining more profits,

this also puts other companies at a competitive disadvantage. However, having a low

growth rate as they are growing by 5%, generates slow income for the business, and

L'Oréal should increase their quality of service or provide campaigns that are related to

their consumers. Overall L'Oréal still does operate on a bigger scale and still receives

high revenue sales. This does not show how much these brand follow CSR methods but

it shows how much influence it has on a market, even though Estee lauder has a high

growth rate, many consumers are still not supporting Estee lauder due to the influence

of animal cruelty, this in fact reduces the market share as they lost some customer

base.

Long term implications and short term challenges

CSR activities have helped the employees as they feel that they are treated well and

this can improve motivation and drive them to work even harder. L'Oréal’s reputation

amongst the employees who are an important asset to them would increase and this

would help them in the long run to be able to recruit more employees and hire the most

talented ones as more will want to work for L'Oréal increasing their access to a large

recruitment base.

As customers nowadays prefer companies that are socially responsible (Schaeffer) The

26
CSR activities of L'Oréal are likely to increase the customer's perceived value towards

the company as well as satisfaction and loyalty which could help towards improving the

reputation of the company and could also improve the brand value. The long term

effects of this could be that they are able to increase their customer base which would

generate more revenue and profits helping to satisfy their shareholders through higher

dividend and returns as well as being able to provide more bonuses to the employees

so that they would also be satisfied.

Competitors would also be forced to shift their focus towards CSR and other firms in

other industries would also benchmark L'Oréal and they would be able to earn a better

reputation in the world. Society as a whole would also benefit as more firms tend to be

more socially responsible and this can lead to an improvement in living standards for

both the current and future generations.

Nevertheless, the short term challenges do exist in terms of having to spend more time and

money to implement these methods and have an effective and efficient CSR program.

Furthemore, getting shareholder approval and the additional efforts needed to be put into these

activities would also require more cooperation amongst the different stakeholders.

27
 4.Conclusion

In response to the research question “To what extent has L’Oréal been able to improve

its reputation through CSR?” It could be deduced that the CSR policies implemented by

L’Oréal have contributed significantly towards the improvement of its reputation and an

increase in its market share and an improvement in its financial position.

The policies of L'Oréal Buy & care, Solidarity sourcing, Human rights policy,Sharing

beauty with all,Prioritizing learning and development have contributed towards the

improvement in reputation as seen by L'Oréal having 7.95% growth of revenue to reach

$30.95 billion from 2014 to 2020. Despite the Covid-19 impact.

Nevertheless, there were some issues raised about the ingredients used by L’Oreal that

were considered to be substances causing cancer. Hence, more would have to be done

to improve its reputation affected by these issues raised by awareness groups.

However, overall the CSR efforts carried out have been able to compensate for the loss

of reputation caused by the cancer causing ingredients.

In view of the above and the continuous implementation of CSR activities continuing

into the near future and the increase in market share based on the latest details

available in 2020 the essay concludes that the CSR activities of L’Oreal have improved

it reputation as seen by a greater market share. By reducing the variables and focusing

on the main aspects of CSR as well as the most appropriate sources, the 4000- word

28
count was met effectively. However there is a scope for further research regarding the

other factors outside of CSR that could have affected the reputation and other CSR

policies implemented by competitors.

29
 5.Bibliography

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 6.Appendices

Appendix 1: SWOT analysis

Strengths Weakness

1. Diversity and inclusivity

1. High quality L'Oréal has struggled with inclusivity for

L'Oréal also has an aspect niche market the past decade, although they have

that is for consumers with higher income started the inclusion for other ethnicities,

which specific products are sold to. it started off for mostly Caucasian women

with straight hair, this resulted in

2. Sustainability revamping many products especially their

L'Oréal has introduced many campaigns hairline for curly girls but till this day the

such as share and care, sharing beauty sales are low due to the ingredients being

with all in order to reduce the harsh harsh

chemicals ingredients while increasing 2. Profit margins

their value chain. As stated before L'Oréal’s profit margin

has been decreasing while research and

development have been expensive in

order to stay in the cosmetic industry, this

further escalates the cost of production

which will be impact the profit margin.

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 Opportunities Threats

1. L'Oréal has a chance of expanding 1. Social media presence

in developing economies as they L'Oréal has received many articles from

have high brand recognition and the use of harsh chemicals, false

the affordability of the products will advertising, and the diversity of their

also allow new consumers to test products which has caused pressure

them out group action due to the term “whitening”

used in L'Oréal’s skincare products loss

2. Increasing customer awareness of sales, reputation was ruined.

As L'Oréal controls a big percentage of

the market share, releasing a fully 2. Market trend

eco-friend product will help increase the In the cosmetic industry, the market trend

awareness about social change and as moves very quickly, and as L'Oréal

well have a good image for the social spends time on research and

market which has been increased since development which will have a loss in

2020. This will introduce many consumers preferences for consumers' taste. As

who are vegan and allergic. newer products are released, many older

products start to decline, and soon there

is a loss in profit margin.

(source: Frue)

36