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Brand leaders have a duty to pay a premium for sustainability to improve industry, says L'Oreal supply chain chief

Big brands have a responsibility to pay top whack for sustainability solutions such as recycled plastic, the Asia Pacific supply chain head for the world's largest cosmetics firm says. L'Oreal recently announced new commitments to 'operate within planetary boundaries'.

Industry-leading companies have a responsibility to pay a premium for sustainability solutions to drive the market towards better environmental and social outcomes, the supply chain head for the world’s biggest cosmetic firm has said.

Speaking to Eco-Business after L’Oreal announced a series of new long-term sustainability targets, Antoine Vanlaeys, its Asia Pacific senior vice-president of supply and operations, said the company had invested heavily in solutions to reduce the company’s environmental footprint.

To help the maker of brands such as Garnier, Maybelline and Lancôme meet its new target for 100 per cent of the plastics used in its packaging to be recycled or bio-based by 2030, Vanlaeys said L’Oreal had been paying 30 to 40 per cent more for recycled plastic than it would for virgin plastic.

The relative price of recycled plastic has risen sharply in recent months, as the Covid-19 pandemic has led to falling oil prices. The price of virgin plastic is closely tied to the price of oil.

“We know that post-consumer plastic resin right now is more expensive than virgin plastic. But we want to make sure that we are actively driving the market for post-consumer plastic resin,” Vanlaeys said.

We believe that with our scale and commitments in place, we can improve the system [for plastic recycling].

Antoine Vanlaeys, senior vice-president, supply and operations, Asia Pacific, L’Oreal

L’Oreal could help develop the recycled plastic market with investments that add scale and transparency to the industry, Vanlaeys added. Earlier this year, it emerged that factories in China have been mixing virgin plastic with recycled content and selling it as 100 per cent post-consumer content.

“We believe that with our scale and commitments in place, we can improve the system [for plastic recycling]. It’s not something you can do just by putting money on the table,” he told Eco-Business.

L’Oreal has also made major investments in carbon emissions reduction, as the firm aims for a new target to be carbon neutral across all of its sites, including offices, warehouses and factories, by 2025.

Through energy efficiency and renewable energy investments in key territories such as China and India, L’Oreal has reduced the carbon footprint of its Asia Pacific operations by 55 per cent while growing its business by 400 per cent since 2005, Vanlaeys noted.

L’Oreal is already carbon neutral in China, its third largest market by sales globally, and will be carbon neutral across the region by 2022, three years before other key regions, Vanlaeys predicted. The company uses a mixture of solar, wind, hydro and biogas as energy sources in Asia.

In June, L’Oreal, which generated €29.87 billion in global sales in 2019, said it would invest €150 million (US$177 million) in addressing social and environmental challenges through impact investing and financing projects linked to the circular economy, nature restoration and supporting vulnerable women.

“We believe it’s [investment in sustainability] the right thing to do, and it is also our responsibility as a leader in our industry to sometimes pay a premium [for sustainability solutions],” said Vanlaeys, who has worked for L’Oreal since 2002.

L’Oreal announced new sustainability targets for the next 10 years on 25 June, committing to new goals for 2030 concerning climate, water, biodiversity and natural resources. 

“We needed a new perspective and we needed to be more ambitious,” said Vanlaeys of the “L’Oreal for the future” 2030 sustainability plan. 

Among the company’s pledge to operate “within planetary boundaries” is a commitment for its product ingredients to be deforestation-free by 2030. L’Oreal is considered a frontrunner in eliminating deforestation from raw ingredients such as palm oil.

However, in other areas such as animal welfare, some advocacy groups have pointed out that L’Oreal continues to source ingredients that are tested on animals, as it operates in China, where animal testing is mandatory.

L’Oreal’s new sustainability commitments came 10 days after rival consumer goods firm Unilever said it would pump US$1 billion into a climate and nature restoration projects over the next 10 years, and would be a net-zero emissions company by 2039. Unilever has committed to cut its plastic footprint in half by 2025.

In May, another consumer goods multinational, Henkel, pledged to be a “carbon positive” firm—that is, shift to renewable energy-powered production and supply surplus energy to third parties—by 2040 and also cut the volume of virgin plastic it uses by 50 per cent by 2025.

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