No Business Can Skip Sustainability Today, Says Palt

Has covid accelerated both consumer and corporate shift towards sustainable products and practices?

What has changed is that young people, especially, are more eco-anxious . So, you have the younger generation that is more anxious, demanding, more worried; that’s why you have the climate strikes and you have all these movements. That does not forcibly translate into consumer behaviour (change). In opinion polls, consumers do say they want sustainability and they are ready to pay more or they will refill plastic bottles, etc. We push a lot of refill and recharge, but people are yet to overcome some hurdles to change behaviours. However, that doesn’t influence our commitment. We are convinced that consumers will come to it and we will help them get there. We put a lot of products out in the market that will accelerate this sustainability journey for them, too.

How concerned are consumers in markets like India where we're seeing a boom in the beauty business?

I don’t want to generalize and I’m not an expert on the Indian beauty market. When you look at how people behave—it’s me, myself, the people who are close to me, my community, etc, and then it’s the environment. Consumers are always more concerned when they think about ingredients but when it comes to recycling, waste and other sustainable behaviour those come a little bit later, and I don’t think India is an exception in that.

What about sustainability and business opportunity—can they go hand-in-hand because these large-scale commitments also come at a cost?

I don’t understand how any company (today) can think that they might still be able to be in business without being sustainable. I don’t understand how companies want to operate in destroyed environments, unstable societies, and societies that are in conflict because that is what the future is going to look like if we don’t build more resilient and environmentally-conscious societies and if we don’t fight climate change.

Overall, do consumers really care about how sustainable brands are?

It depends how we define care. I’m not sure they want to spend a lot money on it—there I would say maturity is very low. When it comes to caring, I would say maturity is very high. People expect us to do the right thing—even more so from aspirational brands or luxury brands, it’s part of the price for them. I think if you ask consumers to put more money for a sustainable product—I don’t know. But if you ask them if they care or are concerned the answer will be “very high".

Does India become a key sourcing market for alternative raw materials or natural ingredients?

We have ingredients that we source from India and we have challenges because they are already very impacted by climate change. We source guar (gum) from Rajasthan and it is impacted by climate change (drought). We have been able to work a lot on a sustainable sourcing programme here offering benefits to farmers. We source this for export markets. We have an advanced research facility here that does this kind of work with our sourcing and sustainability teams in Paris. Yes, we can source something, and of course, India is an interesting market. But it is about the way we want to do business everywhere we are, we have the same standards globally. And sometimes that makes it difficult because we have very high environmental standards and we apply them everywhere. Our factory in Baddi in Himachal Pradesh reached 100% carbon neutrality; our Pune factory is set to reach this goal this year.

Will L’Oréal reach its 2030 goals earlier in certain markets?

No and we will be very happy if we reach all of our targets in 2030. Let’s be clear—that is a very ambitious transformation that is 95% of our ingredients coming from natural or biotech sources and so on; 100% of recycled plastic, it is 100% of carbon neutrality. It’s also 50% reduction in carbon footprint per finished product unit. This is a complete transformation so that is so ambitious and visionary—we will need all our energy and all our work to achieve it by 2030.

As climate events get more erratic does it impact how you source raw materials especially as L’Oréal has pledged that 95% of its ingredients in formula will be bio-based, derived from abundant minerals or from circular processes by 2030?

Definitely—we have anticipated that but we see already that our supply chains are more resilient, that we have better quality, that we have better relationships with our suppliers because we worked for the last 15 years on sustainable sourcing. We work with our suppliers of natural ingredients on how to better protect soil, their crops, how to do sustainable sourcing, how to manage co-cropping. It’s not just in the interest of sustainability or in the interest of humanity only, it’s also in the interest of business.

Across the consumer goods industry, why is there a premium on sustainable products?

We do not put the cost on consumers at L’Oréal. Refill and recharge only work because the recharge is less expensive. We have to make a price benefit for consumers, otherwise they don’t go for behaviour change. We have to make sustainability and economic opportunity work at the same time for the consumer because otherwise we’re not going to succeed.