Retail in Asia


Exclusive: L’Oréal’s sustainability play in North Asia 

At the France-China business meeting held last week, L’Oréal chairman Jean-Paul Agon committed to a three-year partnership with Alibaba Group to launch the first digital circular economic model in beauty.

SEE ALSO: Loewe opens first-ever Re-Craft store in Osaka

The collaboration, which will foster ‘green’ consumption by developing new products while creating measurable circularity solutions, is the latest step in L’Oréal North Asia’s path to sustainability.

L’Oréal North Asia, spanning Japan, Korea, and Greater China, became the first of the company’s zones worldwide to achieve carbon neutrality across all operated sites, offices, and research and innovation centres, achieved through a number of measures such as sourcing local renewable energy.

Retail in Asia speaks with Janet Neo, chief sustainability officer at L’Oréal North Asia, on the company’s sustainable strategy.

RiA: What are your thoughts on sustainable retail? How is L’Oréal making its retail touchpoints more attractive?

Neo: We see sustainable retail as a way the company influences how consumers select and purchase products with a sustainability mindset.

We will take on greater responsibility, engage our entire ecosystem and demonstrate that companies can be part of the solution to the challenges the world is facing.

L’Oréal has established ‘Sustainable Retail Box’ to ensure our retail environment are built in a sustainable way. We have comprehensive guidelines for our store display production, for example, only use FSC certified materials such as paper and wood. We also apply modular design to facilitate reuse and separability of point-of-sale displays.

In this process, we also consider eco-design challenges. Another practice we implement in eco-design displays is by reducing the weight of materials.

RiA: Can you share some key achievements and projects in this space?
L’Oréal Korea’s upcycled benches made from cosmetic bottles, installed at the Shinsegae department store in Gangnam, Seoul. Source: L’Oréal

Neo: We are very proud that all our new luxury stores in North Asia are 100 percent eco-designed displays and free-standing stores. We also provide consumers a way to return used empty bottles at our in-store counters, implementing consumer recycling programs in North Asia.

From 2020 to 2022, we collected more than 10 million empty bottles via Lancôme  in Mainland China. In Taiwan, we partnered with local recycling service provider to provide opportunities to hire people with disabilities to work as bottle sorters. This way, we can provide employment to underprivileged groups in our local community.

We also piloted an innovation project with Cainiao in Mainland China to help consumers recycle empty parcels. Consumers were provided the option to select ‘circular parcel’ at check-out. Each circular parcel is returnable, and can be reused up to 40 times.

In Korea, we joined hands with one of our largest department store partners, Shinsegae,  upcycling collected empty used bottles into community benches that members of the public can enjoy freely.

In Japan, we implemented the Beauty Assistant Uniform Upcycling project to address end-of-life beauty assistant uniforms contributing to waste and carbon emissions.

Across the various consumer experience touchpoints, we will continue to collaborate, innovate and co-create easy ways for consumers to take actions on sustainability.

RiA: How does L’Oréal plan to approach educating consumers?

Neo: Brand initiatives play an important role in educating and inspiring consumers. Today’s consumers expect brands to do more.

In 2022 market research, 90 percent of consumers expressed they are willing to pay for sustainable products. However, not all can follow through. We call this the ‘Say-Do’ gap, and one of the reasons is we believe consumers find a lack of information to help them understand and compare sustainable products.

The first step in sustainable consumption transformation is transparency. We developed a Product Environment Impact Labelling system, which provides a science-based methodology and scoring to help consumers make informed choices about sustainable products selection.

L’Oréal’s skincare brand Biotherm officially launched the system with four major e-commerce platforms: Tmall, JD, Douyin, and WeChat. The system informs consumers of the environmental impact of the products they buy throughout their product life cycle.

RiA: What sustainability initiatives are specifically in place and what else is coming in the region?

Neo: We joined forces with the industry’s first EcoBeautyScore Consortium, which brings together over 60 companies and professional associations from the cosmetics industry.

The consortium’s aim is to co-develop an industry-wide environmental impact assessment and scoring system for cosmetics products. In the near future, consumers can look forward to having a standardised eco-beauty score that they can use.

Until this new system is published, we will continue to deploy its own product impact display system, driving roll out of the product environment impact labelling across our portfolio of brands.

A single company cannot do it alone to achieve the speed and scale of sustainability transformation; partnering ecosystem to accelerate sustainable consumption is our key strategy. Top leadership must step up to lead this change.

On Earth Day, L’Oréal China will launch the 88 low-carbon campaign by providing its current portfolio of sustainable products that are refillable, rechargeable, and using sustainable packaging. Consumers will be able to search such products tagged with ‘low-carbon friendly’ label, and the product page will display the amount of CO2 emissions reduction of each product.

Across the other markets, we will continue to accelerate our green business planning with our retail partners and developing an accelerated strategy to educate consumers on the benefits of refillable models and making them available easily.

RiA: How did L’Oréal achieve its carbon neutrality in North Asia? 
Biotherm’s new Product Environment Impact Labelling system; Lancôme’s consumer recycling initiative in Mainland China. Source: L’Oréal

Neo: Other than reducing our own emissions, collaboration is key to drive sustainability, and we consider it our responsibility to engage our customers, suppliers, business partners and consumers in our transformation process.

In North Asia, L’Oréal have implemented dynamic measures and a variety of strategic approaches across the different sites.

In Mainland China and South Korea, CO2 emissions reduction through installing onsite renewable energy generating facilities has been an important contribution.

L’Oréal’s BeautyCos plant is a showcase of how diverse sustainable energy solutions work together to achieve CO2 emissions reduction goals. A Combined Heat and Power (CHP) system was built onsite to use biogas to produce steam, electricity and heat with high efficiency. The biogas is generated by a biomass energy project at Suzhou Industrial Park, which uses kitchen and landscaping waste as raw materials for energy generation.

We [also] pursued the best way to source local renewable energy. In Mainland China, L’Oréal’s Yichang Tianmei Plant achieved carbon neutrality with 100 percent use of hydropower. Other L’Oréal China offices and campuses adopted solutions through partnerships with a renewable energy project in Jiangsu Province.

L’Oréal Korea started participating in Korea’s RE-100 system, a global initiative on renewable power, in 2021 and received renewable energy certification from Korea Electric Power Corporation (KEPCO).

In Gotemba, L’Oréal Japan has installed new electrical boilers using renewable electricity, and participates in the Green Power and Heat Certificates initiative which sponsors renewable energy generation facilities that are validated by the local authorities.

L’Oréal Taiwan is the first company in the market to channel its renewable energy efforts through Power Purchasing Agreements.

Similarly, L’Oréal Hong Kong achieved carbon neutrality in 2020 with energy efficiency measures such as the installation of LED lighting and sourcing local renewable electricity for its office.

SEE ALSO: L’Oréal to acquire Aesop in USD2.5 billion deal

RiA: What are some next steps in terms of advancing your sustainability goals? 

Neo: With our Group’s decarbonisation strategy, we are aligned with leaderboard standards such as Science-based Targets initiatives (SBTi) and the Taskforce for Climate-related Financial Disclosures (TCFD) that requires signatory members to have a roadmap, action plan and financial trajectory to achieve net-zero.

With manufacturing capability in China and Japan, we see opportunities to utilise more localisation production, which will reduce transportation CO2 emissions.

The other opportunity is in partnering with our IT service providers to develop a greener data centre migration plan which can help to reduce our Scope 3 CO2 emissions footprint.