Money & Career

Why Ethics Is The New Black In Business

We speak to L’Oreal’s chief ethics officer Emmanuel Lulin

At L’Oreal, ethics isn’t a division or a job: it’s a mission. And the company’s chief ethics officer, Emmanuel Lulin, is a man on a mission.

With 86,000 staff across 70 countries, L’Oreal is the world’s largest beauty products company – and it’s leading by example, following its strong moral compass. As consumers become more and more conscious about the products they use and the brands they engage with, having a firm moral code is increasingly important for business success. Put simply, Lulin says companies without an ethical agenda will ultimately fail.

“I would say that ethics is the beauty of inside. So as a world leader in beauty, it is natural and proper to be concerned about the beauty of the inside as well,” explains Lulin, a former barrister and “Nazi hunter” in his youth, who joined L’Oreal two decades ago and founded the ethics mission in 2007. “Working as a Nazi hunter for ten years taught me very early on that as an individual you can change things if you speak up and have courage.”

Lulin’s mission at L’Oreal started with an ethics day. Every October, for the last 10 years, the company has held a 24-hour forum where thousands of staff across the world join a web chat with chief executive officer Jean Paul Agon to raise their issues and concerns, ask questions and give suggestions.

Over the decade, the participation rate in the day has more than tripled worldwide with thousands of anonymous questions being asked. These have evolved over the years, which Lulin sees as a step in the right direction: “We’ve seen an evolution in more discussion on the business-related issues, and less complaints about HR-related issues. I think the more discussion that you have internally on ethical issues, the better the organisation. It’s a sign of maturity.”

While in the beginning, the majority of questions for the CEO were about pay rates and overtime, last year Agon was asked about the company’s supply chain, human rights, diversity and corruption.

These are the issues that Lulin is working to address, along with his team of 75 ethics correspondents in offices around the world. “[Like all companies] we have issues. But what sets us apart is the level of sincerity that we address these issues. We don’t bury them, we address them,” says Lulin, who is guided by four principles: integrity, respect, courage and transparency.

It’s an approach that’s worked well. While there have been royal commissions into the dubious practices of some of Australia’s biggest corporations, who have charged fees for no service and shared their customers’ personal details, L’Oreal has successfully navigated difficult issues including gender equality, sustainability and morality. Last year, L’Oreal was ranked one of the World’s Most Ethical Companies by the Ethispher Institute. It also ranks first in Europe for gender equality and was recognised as by the United Nations for being one of the highest-engaged participants of the world’s largest corporate sustainability initiative.

Speaking about the rankings, Agon said, “All L’Oreal employees around the world will be very proud of these exceptional recognitions. Bringing about change requires both the long-term commitment of top management but also the daily engagement of each employee. It is only together that we can further our efforts as an ethical corporate citizen.”

More than the accolades, Lulin says he is proud of the “visionary” programs L’Oreal has created. There’s the For Women In Science Initiative, which supports and recognises accomplished female researchers and aims to encourage more young women to get into the male-dominated STEM industries. Plus, there’s the Beauty For a Better Life program, giving vulnerable women (such as cancer patients) self-esteem-boosting wellbeing treatments. Lulin’s favourite? A training program for hairdressers to teach them how to recognise the signs of domestic violence and help women in need.

There is both moral and literal value in L’Oreal’s devotion to integrity. “Trust is the currency of ethics,” Lulin explains. “The more ethical you are, the more you will generate trust. The more you generate trust, the more you generate real value to the company. The long-term value of trust is a currency that lasts.”

Last year, L’Oreal reported operating profits of AUD$787 billion. As it goes, trust is an extremely valuable currency.

But it’s not profits that drive Lulin; it’s a deep sense of purpose. “Justice is very difficult. For this type of mission, you need to be strongly motivated.”

As well as motivation, Lulin says it all comes back to the pillars of integrity, respect, courage and transparency. His advice for companies wanting to build trust is to practice what they preach. “It’s all about sincerity, you need to walk the talk,” he says.

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