The quarter-percent promise
L’Oréal · The CSR analysis model and the index · Read the study: maxnoble.com/study/0016
For the class
Tasks in Word – type the answers on a computer.
1What is a sustainability-linked bond, and what did L’Oréal promise in its own?
2Use the five-step CSR analysis model on L’Oréal’s promise. What were the results, and what is the explanation?
3Index L’Oréal’s emissions with 2019 = 100. What do the two indexes show, and which law does the study prove?
Answers · for the teacher
No. 0016 · The quarter-percent promise
1What is a sustainability-linked bond, and what did L’Oréal promise in its own?
A loan where the company pays its lenders extra if it misses its own green targets. L’Oréal promised, by 2025 against 2021: 14% less carbon per product sold (cradle to shelf), zero carbon from its own sites, and half its plastic packaging recycled or plant-based. Missing any target cost 0.25% of the €1.25bn borrowed.
In the study: Screen: The promise
2Use the five-step CSR analysis model on L’Oréal’s promise. What were the results, and what is the explanation?
Results: plastic 50.14% (met), sites 96% (missed), carbon per product −5% against −14% (missed). Explanation: its own factories moved fast, but suppliers and transport, where most of the carbon is, did not; and a fine of about €3.1m was too small to force the change.
In the study: Screen: The tool
3Index L’Oréal’s emissions with 2019 = 100. What do the two indexes show, and which law does the study prove?
Own sites and bought energy: 2025 = 42, ahead of its 2030 target. Everything it buys and moves: 2025 = 105, against a 2030 promise of 72, so it went the wrong way. Law No. 32, Make the Promise Cost More Than the Excuse: the fine was about €3 million, next to about €6 billion of profit.
In the study: Screens: The tool and The law it proves
Hand out page 1 after the reading. Page 2 holds the answers. Every answer is in the study; nothing new is added.