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L’Oréal cancels dividend increase and launches €150m social and environmental fund to support coronavirus response

L’Oréal cancels dividend increase and launches €150m social and environmental fund to support coronavirus response

“2020 will be a difficult year, L’Oréal will get through it” Jean-Paul Agon pointed out a few days ago. To this effect, L’Oréal’s Board of Directors took a series of measures yesterday, Tuesday, May 12. Among them, the cancellation of the 10.4% dividend increase but also the launch of a social and environmental solidarity programme: “L’Oréal for the future”. The world leader in cosmetics thereby hopes to rebuild a stronger economy after the pandemic through “green” and sustainable measures.

 

At the end of a Board of Directors held yesterday, Tuesday, May 12, the global cosmetics giant submitted many new resolutions in light of the current exceptional economic situation.

 

A series of budgetary and financial measures

 

In the context of the economic crisis linked to the Covid-19 pandemic, L’Oréal has decided to maintain its dividend but has decided not to increase it.

 

The Board has indeed decided not to maintain the planned 10.4% increase in the dividend, and to propose a dividend of €3.85, identical to that paid in 2019. The dividend will be payable on Tuesday, July 7, 2020, with a record date of 00:00 hours (CEST) on Friday, July 3, 2020.

 

The Board has also decided to renounce to any share buyback operations for the whole of 2020, which amounted to 750 million euros in 2019.

 

In a spirit of solidarity, the Chairman and Chief Executive Officer of the Jean-Paul Agon Group has also informed the Board that he is renouncing, with immediate effect for 2020, any compensation based on the financial objectives of his annual variable compensation, which represents a reduction of 30% of the maximum amount of fixed and variable compensation to be allocated for 2020, as well as any allocation of performance shares, should a plan be decided in 2020.

 

Also, strongly aware of the challenges ahead and the importance of committing to a more inclusive and sustainable world of tomorrow, L’Oréal has decided to expand its corporate social and environmental responsibility policy.

 

A green stimulus policy

 

The French industrial group has also announced the launch of a new social and environmental solidarity programme called “L’Oréal for the future”, for which CEO Jean-Paul Agon has announced the allocation of 150 million euros to respond to two major global challenges that the Covid-19 pandemic has highlighted: the climate emergency and the vulnerability of women.

 

The group will therefore commit 50 million euros to support associations that support women in highly vulnerable situations throughout the world, victims of the social and economic crisis.

 

The crisis linked to Covid-19 spares no one, but it does exacerbate inequalities and hits harder those whose economic or social situation was already difficult or who are victims of violence, first and foremost women“, explains Alexandra Palt, the group’s Director General for Societal and Environmental Responsibility, in a press release.

 

An additional €100 million will be dedicated to the fight against global warming and the preservation of damaged natural ecosystems.

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“Over the coming months, our societies will face social crises giving rise to situations of great human suffering, particularly for the most vulnerable. At the same time, we are fully aware that environmental challenges are increasingly pressing. It is essential not to step back from the sustainable transformation that the world needs. We therefore wish to reaffirm our commitment to the environment and to the preservation of biodiversity, and to help mitigate the social crisis for women. These two causes reflect the values and the historic commitment of L’Oréal.” stated Jean-Paul Agon.

 

As such, the cosmetics manufacturer intends to finance projects for the restoration of marine and forest ecosystems, but also projects related to the circular economy, particularly in terms of recycling and plastic waste management.

 

These announcements are to be supplemented by the presentation of a sustainable development programme for 2030 at the L’Oréal General Meeting that will take place behind closed doors on June 30, 2020.

 

The world leader in beauty thus formalises its commitment to a green recovery in the wake of the economic crisis caused by coronavirus.

 

Read also > L’Oréal : luxury division results “negativily impacted” by coronavirus

 

Featured Photo : © L’Oréal

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