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Responsible Development2012

Arnica

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GROUPE CLARINS - 2012 - RESPONSIBLE DEVELOPMENT

ContentsEditorial

Messages


Group Presentation

p.18 Safe formulas

p.6Christian Courtin-Clarins

p.10Industrial organization

p.23 Protecting biodiversity

p.8 Philip Shearer

p.14 Key dates of Social Responsibility

p.35 Encouraging innovation

p.3

p.20Environmentally-friendly formulas

p.7Dr. Olivier Courtin-Clarins

p.12Responsible Commitments

p.30 Developing low impact products, packaging and POP

p.37Reducing greenhouse gas emissions and optimizingnatural resources

p.45Communicating Responsible Development values

p.56Being known as an exemplary socially-minded company

p.44Limiting unnecessary production and improvingthe supply chain

p.51Supporting employees

Editorial

Ambiaty

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Editorial

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Responsible Beauty

The Clarins Group is a French family enterprise witha pioneering vision; a vision of ‘Responsible Beauty’. We owe our success to nature and to women. Nature has given us the best ingredients and women have trusted our products to enhance their beauty. Protecting nature and making life more beautiful to women are our priority. Every day we work for a generous and beautiful planet, everywhere and for everyone, for today and tomorrow.

The planet’s current state made us take a closer lookat our development model. In our industry, we can work to ensure that the actions our products have on the skin, are also true regarding nature: nutrition, hydration, oxygenation, regeneration and preservation.

Our company is a creative force, one that lends to economic and social growth; one that interacts with the environment. We can help preserve the planet’s biodiversity and its natural resources while working to reduce unnecessary greenhouse gas emissions. We can drum up awareness around us and promote new behavior among our clients, employees and suppliers. Together, we can explore new, innovative, environmentally-friendly methods that will benefit everyone.

The Sustainable Development department, part ofthe Group’s Presidency since 2007, has worked primarily to communicate sustainable development values and goals among employees who are major assets forthe company. In this spirit, the Responsible Commitments spell out for employees, who are often passionate participants on a daily basis, the main ideas behind the Group’s voluntary activities.

Based on the Courtin-Clarins family’s initiative,the company’s history is dotted with wonderful human-interest stories and social projects that affirm, beyondany commercial performance, its status as a socially-minded company that is open to the world. The 2012 Responsible Development Annual Report affirmsthe continuity of such projects and illustrates the Group’s historical motto:“Do more, do better and enjoy doing so…”

When we protect nature,we’re protecting the future.And the future is our children.”Christian Courtin-Clarins

Messages

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At Clarins, we believe in beauty that respects the planet and mankind, and have thought so for nearly 60 years. Nature is our source of inspiration, Respect is our ethical code. This is conveyed in the special relationship we forge day after day with our clients. Responsible development is a voluntary yet concrete approach that all Group employees put into practice on a daily basis. In addition to a passion for beauty, what brings the men and women of the Clarins Group together is the motivation to get involved above and beyond the call of duty.It is the belief that, together, we can improve life for people now and for future generations.It is a commitment to responsible beauty.

Messages

“A voluntary and practical approach”—

Christian Courtin-Clarins, Chairman ofthe Supervisory Board

Messages

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Messages

I am convinced that beauty, self-confidence,and well-being have a direct influence on the body and our health. This is important for healthy women and for women who are not. Helping women feel more beautiful is not futile, it is extremely important when they are affected deep within themselves.Just as the French organizations ‘Etincelle’ (Spark) and ‘Belle et Bien’ (Look good, Feel better) help women support the physiological and psychological effects of cancer, the Courtin Arthritis Foundation, a unique foundation in France in the field of rheumatoid arthritis, gives hope to those affectedby this disease.

“A new hope”—

Dr. Olivier Courtin-Clarins, Managing Director,Chairman of the Courtin Arthritis Foundation.

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Messages

From the beginning, the managers of the Clarins Group have been fully involved in the commitmentto responsible beauty. These commitments reflectthe company’s collective awareness and concern everyone – both internally and externally – involved in our Group’s international success. Our development strategy consists in combining economic performance and durability, growth, social equity and the preservation of nature. Responsible development is an everyday matter whichwe experience like an incentive for change. Let’s rise to the boldest challenges together. Let’s dare to innovate!

“Challenges to be addressed, together”—

Philip Shearer, Chairman of the Boardof Directors

Presentationof the Group

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Skin care and perfumesare made in France—

Industrial organizationSince its start in 1954, Clarins has been a family-run operation that now has 1500 employees at four different sites in France: there are two production areas:one in Pontoise (north of Paris) and one in Strasbourg; the logistics platform in Amiens centralizes worldwide shipping and the head office is located in Neuilly, near Paris. Internationally, there are more than 5000 employees who work to implement the Group’s business plan. They are directly linked to 21 distribution subsidiaries or agents who manage the controlled distribution network at a global level.

Clarins Laboratories in Pontoise

Under the Clarins entity, the industrial site in Pontoise (which opened in 1983) consists of 61,000 m² and occupies a surface of 38,000 m². It is home to three main activities: research and development, the storage of raw materials and packaging components andthe manufacturing and packaging of all beauty products and scented derivatives.

In 2012, at Pontoise:2 977 tons of raw materials were used, 235 millions of units were produced.

Presentationof the Group

Black currant

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Presentation of the Group 11

In 2012, at Strasbourg:1 220 tons of raw materials were used,

85 millions of units were produced.

In 2012, at Amiens: 25 642 tons of merchandiseswere despatched.

Cosmeurop site in Strasbourg

The Cosmeurop site in Strasbourg has underground maceration tanks with a capacity of 734,000 liters.All alcohol-based products for the Group are manufactured here and packaging items and raw materials needed for this production are stored here.The facility follows strict guidelines for environmental protection and is particularly vigilant in this area.

Clarins Logistics platform in Amiens

Since its construction in 2001, the Amiens site, which occupies an area of 12,000 m², has been overseeingthe shipping and distribution of all of the Group’s brands. The ultra-efficient storage tower can automatically process 27,500 pallets. The order-preparation zone manages shipments to France, Spain, Germany, and,since 2011, Belgium, in just-in-time mode.

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Presentation of the Group

Out of respect for Man and Nature.—

The Group’s Responsible Commitments

These Responsible Commitments concretize the Group’s vision.They inspire all of our employees to look for ingenious solutions that will ensure the company’s longevity by balancing economic performance, social fairness and protecting the environment.

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1234

67

8

910

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Create

Develop

formulas that are saferthan ever

environmentally-friendly formulas

protect biodiversity

products’ environmental impact

greenhouse gas emissions and optimize the use of natural resources

unnecessary production andimprove the supply chain

awareness concerning Responsible Development values

members of staff and encourage their development within the Group

the Group as an exemplarysocially-minded company

innovation

Help

Minimize

Encourage

Reduce

Limit

Raise

Support

Establish

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CLARINS GROUP - 2012 ANNUAL REPORT RESPONSIBLE DEVELOPMENT


A corporate citizen company—

Key-dates ofsocial responsibility

A socially-minded company.Beyond business performance, the company’s historyis dotted with wonderful human-interest storiesand social projects that affirm its status as a socially-minded company.

1984Entry on the Stock Market;

shares given to staff.

1991Anti-Pollution Make-Up launch.

1993Beginning of the partnership with Alp Action

for the preservation of biodiversity in the Alps.

1999 Clarins stops using plastic bags.

1965First profit-sharing plan.

1989Creation of ARP(Association for Polyarthritis Research).

1992Launch of Thierry Mugler’s “Angel” refillable perfume and the start of a partnership with Pro-Natura International in Brazil to protect the environment there.

1997Creation of Clarins ‘Most Dynamic Woman’ Award to support actions to help childrenin need.

1954Jacques Courtin-Clarins founded Clarins.

The 100% pure plant extract oils were launched.

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2004The first ClarinsMen Environment Award given to the ethno-botanistJean-Pierre Nicolas andhis organization called ‘Jardins du monde’(Gardens of the world).2006

Creation of the Courtin Arthritis Foundation (replaces the ARP). Good Laboratory Practices

certification for the Pontoise site.

2007Creation of the Responsible Development department at the Clarins Group.Start of a project in Madagascar to plant 10,000 Katafray trees.

2009Planting of 12,000 trees in Burkina Faso and training programs carried out regarding how to protect them with ‘Jardins du monde’.

2011Clarins participates in a medicinal plant census of an area of 104,000 hectares inthe northern Mongolian forest. The Mugler Forest named in Peru.

2008The first Carbon Assessment carried out. Drinking water supply network set up in

the village of Morarano and the expansion of the school in Marovoay, both in Madagascar.

Partnered with the village of Vinh Kim in Vietnam for the harvest of Vu Sua.

Communication of the Group’s responsible commitments. Group left the Stock Market:

long-term strategy established.

2010The Year of Biodiversity: partnered with

Tchendukua and Deyrolle to carry outan awareness campaign.

Opened controlled-atmosphere production rooms at Pontoise. The ClarinsMen

Environment Award given to Bertrand Piccard for his ‘Solar Impulse’ project.

2012Water access program established in

Madagascar and Burkina Faso. Support for the ‘FEED’ program, a worldwide initiative to

improve childhood nutrition.Launch of a depollution program and a social

and environmental eco-system regeneration initiative with Pur Project in China.

The French Ministry of Ecology presented Christian Courtin-Clarins with

the Legion of Honour.

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Présentation


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Responsible Development2012Let’s take a closer look at the new initiatives carried out by our brands, production sites and employees in France and around the world throughout 2012.Discover how the Group pursued its commitments to a more Responsible Beauty day after day.

Lingustrum Japonicum

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Create formulae that are safer than ever

Efficiency and safety

The Group is proud of its “Made in France” productionof all of its skin care products and derivatives.This geographical centralization guarantees traceability and optimal quality control of product manufacturing. Product efficacy and safe use, strict production procedures and traceability measures that adhere to industry regulations are a priority for the Clarins Group. A team of experts with complementary areas of expertise (chemists, biologists, toxicologists and lawyers) all havea common mission: guarantee the safe use of all products following the European Regulation 1223/2009. A series of both in-vitro and in-vivo tests systematically validate the stability, efficiency and tolerance of each formula. Complementary methods that ensure thorough product quality control during both the manufacturing and packaging processes. At the site in Pontoise, a Cosmetic Vigilance department was set up within the Laboratory itself.

Beauty that is “Made in France”—

Create formulae thatare safer than ever

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Create formulae that are safer than ever

In 2007, Clarins Laboratories’ Cellular Culture unitwas the first in the industry to receive a Good Laboratory Practices certification from the French National Medication Safety Agency (ANSM). This accreditationwas renewed in 2010 and the unit received an “A” grade, the highest one given. In this unit, the same methodsare used as in the pharmaceutical industry. The weighing of ingredients, product manufacturing and filling take place in controlled-atmosphere rooms following very strict hygiene regulations. A Quality Control team of48 people make sure that the Good Laboratory Practices protocol is followed. Employee safety is also a priority for the Group and has been the topic of an awareness campaign and training program that began in Pontoise in 2012 and will be carried out at other industrial sites throughout 2013.

The production sites are committed to making continual progress in terms of reducing their environmental impact. These improvements are being overseen bya special team which was restructured in 2012 arounda new HSE Manager.

All those major investments are made to ensurethe safety of our clients, employees and the environment.

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Conceive environmentally-friendly formulas

Ingredients policy

At Clarins, observing nature has led to finding the most effective ingredients so that the skin can better protect itself. The Group uses more than 250 natural raw materials of vegetal origin. Owing much to nature,the Group has always worked to protect these resources. The plants used are chosen with care working in collaboration with Jean-Pierre Nicolas. When ingredients offer the same efficacy and sensorial aspects, a strict ingredient policy favours plant-based raw materials, organic ingredients, locally-grown plants and if they come from afar, plants from fair trade practices.

Clarins does not use rare or endangered plants.The Clarins Group respects the Rio Convention and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Known for their high standards, Clarins Laboratories accepts to pay the right price for a sustainable ingredient supply. Because plant traceability is important, suppliers must fill out a very complete questionnaire. The origin of the plant is precisely defined along with production methods, harvesting techniques, transformation, transportation, fair trade agreements and any other pertinent aspectso that each raw material can be carefully studied forits sustainability.

For Clarins, the plant world isan endless source of inspiration and innovation.”Dr. Olivier Courtin-Clarins

Pioneer plants forVital Light range

Cochlearia officinale, waltheria,

spergularia. The Laboratories

have selected these plants that

botanists call « pioneer plants »,

as they help to regenerate life

on earth. They have formulated

an innovative complex used in

the new Vital Light Serum,

which was launched in 2010.

Over 250 natural ingredients of vegetal origin—


Spergularia

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Fair trade

Whenever possible, the Group develops partnerships that combine helping local populations, economic development and improved harvests with the purchase of the plant-based ingredients at the right price. Projects are carried out which aim to develop collective infrastructures and the transfer of knowledge. These fair trade partnerships help assure for local populations ‘an existence that is worthy of human dignity’,(article 23 from the Universal Declaration of Human Rights).

For example, in Madagascar, the 1200 inhabitants ofthe village of Morarano have access to clean drinking water since 2008 thanks to funds collected fromthe purchase of Cedrelopsis grevei, more commonly called Katafray, the key ingredient in Clarins HydraQuench products. It is reasonably harvestedin order to preserve local ecosystems. This practiceis also carried out for Ambiaty (Multi-Active range)and Antsemby (Extra-Comfort Foundation). Furthermore, 5% of the purchase price is dedicated to local collective-interest projects such as renovating buildings in the villages of Sakalava, Amboharabe and Andaingo. This support can take the shape of a medical center, like the one in Andaigno whose construction began in 2012. Likewise, the harvesting of Vu Sua,a citrus fruit-based major ingredient found in the Bust Care range, has allowed Clarins to help build a schoolin the village of Vinh Kim in Vietnam.

Katafray

Key ingredient of

the Hydraquench range,

the supply of Katafray has

been respecting a fair trade

agreement since 2008.

Launch of a replanting projectof 10 000 katafray trees

in Madagascar over 5 years.

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Centella Asiatica picking,a key ingredient in Double Serum, Clarins anti-ageing treatment.

Natural Resources Stewardship Circle (NRSC)

Our company is a member of the Natural Resources Stewardship Circle, a group that brings together leaders from the cosmetics and fragrance industry, those whouse natural raw materials. Despite being competitors, they have decided to look beyond their competitiveness and work together to reduce their impact on biodiversity and improve the living conditions of local populations.

The founders, who met in October 2008 in Grasse, approved a declaration based on the UN’s Biodiversity Convention, the Declaration on the Rights of Indigenous Peoples, the Global Compact and the International Labour Organization. The common goal is to make durable the fragile natural raw materials channels that are important to the industry by studying all aspectsof the network, from the quality of the product tothe everyday conditions of the people who harvestthe crops.

Guidelines were written and signed by all members of the NRSC in October 2010 in Paris. They were presented during the International Biological Diversity Convention in Nagoya, Japan. This initiative was applauded bythe United Nations, our industry being the first to have presented such work.

Members of the NRSC are convinced that we are entering a new era, where the value of a company isn’t just measured by economic terms but also in terms ofits social and environmental impact. Taking this impact into consideration opens the doors to new possibilitiesin regards to a new model of balanced interests inour chain of values.

Respect, Transparency and Responsibility arethe founding commitments of the members of this Circle, co-chaired by Christian Courtin-Clarins.

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Help protect biodiversity

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Biodiversity can be defined as the variety and variability of all living organisms and their interactions.It is the source of our most essential requirements: feeding ourselves, looking after ourselves, breathing clean air, drinking clean water, fertilizing soil, pollinizing plants, etc… biodiversity truly is life itself.It has an immeasurable value and Clarins knows this well and knows how to draw inspiration from it.

Biodiversity is Life.Protecting it gives meaning to our lives.” Christian Courtin-Clarins

As a pioneer, Clarins has always looked to offer the best from plants while respecting nature and biodiversity. This concern is taken into account when creating products, from ingredient selection to the choice of packaging and throughout the entire development process.

Since the 1980’s, the Group has continuously worked to protect biodiversity and raise public awareness through a variety of activities. For example, the ClarinsMen Environment Award supports organizations involvedin protecting biodiversity. Clarins also strives to put in place long-term partnerships. And since solutionsare locally managed, the Group supports programs in regions such as Africa, Asia, South America and Europe.

Oxydendron

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The ClarinsMen Environment Award

The first ClarinsMen Environment Award was presented toJean-Pierre Nicolas in 2004 to encourage his work with‘Jardins du monde’ (Gardens of the world), an organization whose goal is to improve people’s health through the use of traditional medicinal plants in parts of the world where access to conventional medical care is not available. Jardins du monde intervenes at the request of villages or local institutions and always works with them to adapt its action to the cultural context. With his teams, Jean-Pierre Nicolas, who holds a Ph.D. in anthropology and is an ethno-botanist, also the founder and president of the organization, restores traditional pharmacopeias and teaches people how to best use the plants as well as how to grow them. He has also written teaching manuals to help improve people’s health, mainly by promoting the use of local medicinal plants.

Clarins has continually supported this organization since 2004 and in 2012, several projects were developed in Madagascar and Burkina Faso.

The ‘Jardins du monde’ association is acting in Madagascar to develop the culture of local plants.

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Long-term partnerships throughoutthe world

EUROPE

Alp ActionBetween 1993 and 2004, Clarins helped protect the rich natural and historical environment in the Alps withAlp Action, an organization founded by Prince Sadruddin Aga Khan. Together, they developed 5 programs to protect the ecological chain at the heart of Europe which includes butterflies in Antagnes in Switzerland (1993),an orchid species in Judenburg, Bavaria (1996),the restoration of wetlands in the Marais de la Cluse near Annecy (1999), very rare plants in the Italian Alps (2001), and the reintroduction of the Bearded Vulture inthe Bargy Mountains in Haute-Savoie, France (2002).

EUROPE

AstersThe work which began with Alp Action continueswith the Asters organization. The Bearded Vulture (Gypaetus barbatus), one of the largest birds in Europe, disappeared from the Alps at the beginning of the 20th century. One century later, it is back. A miracle? No, just the result of a long-term international project. “Thanks to Clarins’ support over the past 10 years, we have been able to continue our work to help bring the Bearded Vulture back to this region,” said Christian Schwoehrer,the organization’s director. This partnership made it possible to open the only breeding centre in France, managed by Asters, as well as actions linked tothe Natural Wetlands Reserve at Bout du Lac,near Lake Annecy.

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AFRICA

In Burkina Faso With Clarins’ support, Jardins du monde has been carrying out an ambitious program since 2004 to help protect local biodiversity and development. Its continuity and effective results are known by local authorities and have been reinforced with a water access project in 2012.

The initial sustainable development program reaches 40,000 people and includes several complementary projects: local villagers are helping build a tree farm and planted 6000 plants in 2009 and 6000 in 2010 thanks to Clarins’ partnership with Douglas. They are also caring for and watering the young plants and protecting the planting areas. Awareness campaigns have been carried out among the local population and child health and nutrition seminars set up for mothers.

The trees that were planted (Moringa, Tamarind, Nere and Shea) were selected with a long-term vision in mind following their importance for their dietary, medicinal, artisanal or cosmetic use and following a harvest schedule spread out over the year so that local populations achieve food independence. The local team added fruit trees that the villagers enjoy.

In 2012, following an initiative by the Clarins subsidiary in Dubai and the tenacity of Jardins du monde’s local teams, a water access program was established in the villages of Poun and Mogueya after a meticulous anthropologic field study was carried out to definethe program best adapted to the needs and means ofthe population. 16,000 meters of lines of stone anda large base were built to channel and retain water.This water available over a longer period of time allows for a second harvest that improves both the food supply and revenue for the villagers. Three new wells were also built and the one at the Poun school was renovated.

The weighing and measuring of children is part of the health program here taking place in

the village of Mogueya.

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AFRICA

In MadagascarOn-going support from the Clarins Group to Jardins du monde in Madagascar makes it possible to put in place training activities regarding the use of medicinal plants, the creation of learning gardens and the distribution of pamphlets (“Family health and medicinal plants in northern Madagascar”), available in French and in Malagasy, distributed in the first place to health workers.

Several ingredients used in our skin care productsare from Madagascar. Water-related diseasesare the second cause of mortality after malaria. In 2012, Clarins started a purification and drinking water access program whose aim is to improve the local population’s health. The program was financed in a creative way during the launch of HydraQuench Serum that also brought awareness to our employees and clients.The 50,000€ that were raised made it possible to build6 wells, install 7 pumps and provide running water fora medical clinic. Training programs have also been carried out to ensure the long-term aspect of these projects and water use. Approximately 10,000 people benefit from these projects in the Tulear region locatedin the southern part of the island.

The “Feuille d’Eau” (or water “leaf”)

by France-Libertés.

This unique client gift

helped finance water

access programs

in Madagascar.

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SOUTH AMERICA

Thierry Mugler Forestwith Pur Projet in PeruAfter the launch of the eco-designed fragrance, Womanity, in 2010, then Eau pour Elles in 2012,Thierry Mugler Perfumes continues to demonstrateits responsible fragrance approach that began withthe Angel launch in 1992.In 2012, they made durable their biodiversity protection program in partnership with Pur Projet in Peru:a botanical garden was planted in Santa Rosa to highlight medicinal plants, flowers and local aromatics. The goal is to preserve traditional knowledge and plant native trees to complement cocoa following the principles of agroforestry while working to preserve 10,000 hectaresof forest.The creation of a Woman’s Committee in 2012: women are very involved in the development of their community. They come together to sell their food production locally (cocoa powder, plantain banana flour and wheat).

SOUTH AMERICA

Kogis Indianswith Tchendukua in Colombia The goal of Tchendukua is to help the Kogis Indians regain their ancestral lands, transmit their traditional knowledge and restore biodiversity in their manner and the link that unites Mankind to Nature. Since 2010,the Group has been happy to support Eric Julien andhis organization. In 2012, this support was renewed which helped return 8 hectares of land to this pre-Columbian community.

In Liming (Yunnan),focus on the transmission

of herbal knowledge.

In Qinlong (Hebei),5000 fruit trees

were planted in 2012.

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2 depollution and regeneration programs that focus on social andenvironmental eco-systems.

ASIA

In ChinaIn China, the environment has been highly affected by accelerated economic growth including desertification, damaged eco-systems, air and water pollution, food crises, population displacement, etc. The Group decided to invest in this growing market, where the Cangzhu plant comes from (used in Double Serum), not only for business purposes but also to help the people who live there too. This is how the two social and environmental regeneration programs came about in partnership with Pur Projet and with the strong participation of the villagers themselves who have been sorely impacted by the deterioration of their environment.A pilot depollution program, a fight against desertification and replanting according to the principles of agro-ecology, started in 2012 in Qinlong, a village located in the province of Hebei. With the planting of 5000 fruit trees in year 1, it was the beginning of a new economical dynamics that will benefit the 110 families in the village.

In Liming, another rural community located inthe province of Yunnan, a program to plant traditional medical plants is taking place. The main goalis to transmit knowledge and to teach agro-forestry techniques. Women in the Lisu communityare particularly involved in this project.


30 Develop products and POP material with as low environmental impact as possible.

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Develop products andPOP material with aslow environmental impact as possible.Respecting the planet means never developing a product without adding a social or environmental element to it. Even if a product’s impact seems minimal on the scale of the product, when added to other products, could represent a non-negligible impact on the scale ofthe brand. This is why the group is evaluating and working to reduce the environmental impact of all products. All the brands of the Group are workingtoward continual progress to reduce this effect.

Double-sided printing and lighter packaging components for

the Double Serum outer carton.

This is a good example of

eco-development during

the packaging development process.

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Develop products and POP material with as low environmental impact as possible.

The Brands commitments:a continuous progress

The first Carbon Assessment was carried out in 2007 at the different French sites and allowed us to attest that product packaging is the primary source of the Group’s greenhouse gas emissions.

In order to reduce these emissions, and taking care not to simply transfer this impact to other activities, the brands put in place voluntary actions such as reduced product weight and volume, the choice of recycled and recyclable materials, raising awareness for their reuse, looking for new printing techniques and new communication methods and staging.

These actions are the result of a brainstorming that included different development teams. People from marketing, purchasing, development, merchandizing and the creation studio from the head office participated in specific training programs beginning in 2008. Simulation tools regarding products’ carbon and water footprints were made available to developers to help guide them in their choices.

Certain measures have already been adopted and already produce concrete results: 98% of our documentation is printed on FSC paper (Forest Stewardship Council) or PEFC (Program for the Endorsement of Forest Certification Scheme). The coating on outer cartonsand showcards has been eliminated, merchandizersare delivered folded flat for less volume, etc.

Never develop a product withoutadding a social or environmentalelement to it… this is the continuous progress pledge that all brandshave adopted.

Ginkgo biloba

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Clarins

The Clarins brand develops products that meet clients’ needs and expectations while respecting the environment too. While redesigning its skin care line, Clarins evaluated its 50ml jar from an environmental perspective and made a conscious decision about choosing to use glass or plastic. The glass jar, overall, was less impactful to the environment than plastic. It was selected but improved upon to be about 12% lighter in weight (24g per jar).This reduced weight jar is being used for all products as the new packaging charter applies.

Clarins Make-Up

Developed without using

ballasts, compacts are light

in weight, both for the hands

and for the planet.

Packaging updates might not be noticed by clientssince they do not affect product use or enjoyment.Efforts to reduce the use of resources continue: superfluous packaging is no longer used to wedge small products, outer cartons are lighter, product informationis printed on both sides of the outer carton, decorationis minimal, ballasts are no longer used in the new Make-up compacts, new recycling programs have been set up in Clarins boutiques in France, product merchandizers are now delivered folded flat to reduce transportation volume, cardboard is selected instead of plastic for time-specific counter merchandizers, etc.

Product launches throughout 2012 exemplifiedthese efforts: Facial Cleansers were re-launched without outer cartons (a savings of 97 tons of cardboard),the plastic coating on ClarinsMen outer cartonswas eliminated which saves 4 tons of plastic film per year, Double Serum, one of Clarins’ “star” products, now comes in an outer carton with product information printed on both sides so that the product insert is no longer needed.

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Clarins Fragrance Group

The Clarins Fragrance Group has always looked to achieve a balance between environmental concerns and sales. The “Source” is a key sustainable development concept that Thierry Mugler Perfumes has been using since the launch of the perfume Angel in 1992. The main idea behind the “Source” is really quite simple. Sincea fragrance’s packaging (bottle) represents the element with the highest environmental impact, and because clients come into a store to purchase a fragrance, why sell the bottle each and every time? They only need one bottle which can be refilled as often as needed. In 2012, both the Angel and Alien “sources” have made it possible to save around 1.3 million perfume bottles and outer cartons, all sizes combined.

La Source

The “Source” has been the key sustainable

development concept for Thierry Mugler Perfumes

since 1992.

Throughout its history, the brand has continued and expanded on its environmental plan. Life cycle analyses were carried out on the best-selling fragrances Angel and Alien in order to identify where improvements could be made. The results of these analyses served as a base upon which a Responsible Development Charter was written which later led to the development of the fragrance Womanity, an eco-developed perfume launched in 2010, followed by Eau pour Elles in 2012. Refillable bottles that could be taken apart to facilitate recycling, lighter weight recyclable outer cartons made from recycled card stock and an ultra-light glass refill when the “Source”is not accessible. In 2013, the “Source” will soon offer the ability to refill 4 women’s fragrances from Thierry Mugler.

In 2012, this initiative spread to other Brands and Licenses that the Clarins Fragrance Group works with: Titan, the third major launch for Porsche Design, offered a refill system for the first time. These eco-friendly savings are passed on to the client since the refill costs approximately 30% less than the retail product itself.

Albizia

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My Blend by Dr Olivier Courtin

Created in 2007 to widen the Group’s high-end product offer, My Blend is a range of custom skin care products that, from the beginning, was designed using refillable packaging in order to optimize the longevity ofthe materials used.

We want to use a new sales model that allows us to respond to environmental questions better. We want to bean active part of this new era.”

Dr Olivier Courtin-Clarins, Managing Director.

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Encourage innovation

Clarins Laboratories,where major scientific discoveriestake place—

Encourage innovation Clarins Laboratories constantly keep an eye on what’s happening in the scientific and technological world. Products they have developed are considered to be major skin care innovations, from sun protection to well-being: the 100% Pure Plant Extract Oils, Double Serum,Eau Dynamisante, etc.A number of scientific discoveries have also been made: the Anti-Pollution Complex, found in all of Clarins daytime moisturizers, protects the skin fromthe potentially damaging effects of the environment; the Phyto-Sunactyl 2 Complex helps sun care products protect the skin from UV rays; the three plant extract Firming Complex increases skin’s resistance, etc.These innovations are regularly recognized by the most sought-after beauty awards: Prix d’Excellencede la Beauté Marie Claire, Madame Figaro, etc.All of Clarins formulas are ‘open’ formulas, meaningthey can be updated and improved upon whenevernew discoveries take place.

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Encourage innovation

The Group’s perfume business (Clarins Fragrance Group) owes its success to a clever mix of audacity, creativity and expertise without restraint. This has led to a solid relationship with clients. Angel, a truly unique, hearty fragrance, is a wonderful example and celebratedits 20th anniversary in 2012!

A forerunner in its field, Groupe Clarins encourages innovation when it can. It was one of the first companies to support Bertrand Piccard and André Borschberg’s Solar Impulse project, the very first solar-powered airplane. The project’s goal is to make an airplane take off and fly on its own, during both the day and the night, using only solar energy (no fuel and no pollution). The Solar Impulse project is scientific but also philosophical since it hopes to raise public awareness regarding saving energy resources and respecting the environment. Building and flying an airplane that does not use fuel is a way to attract public attention to the essential changes that need to be implemented to ensure the future of our energy sources and overall ecology. Supporting the Solar Impulse project shows that we believe in mankind and his ability to find solutions for a sustainable future for all.

In 2012,Angel celebrates its 20th anniversary

Solar Impulse project,the first solar-impulsed plane.

37


Reduce greenhouse gas emissions and optimize the use of natural resources

Priority levers of action—

Reduce greenhouse gas emissions and optimizethe use of natural resources

Help fight against greenhouse gas(GHG) emissions

The first Carbon Assessment carried out in 2007 at all French sites served to measure the sources of greenhouse gas emissions generated by the Group’s activities and identify priorities regarding how to reduce them. In 2011, a new Carbon Assessment was completed at the same sites and confirmed that the primary areas affected were: packaging and promotional material (responsible for 41% of emissions) and transportation (merchandise and business travel- responsible for 23% of emissions).

Actions developed include environmental concerns for every aspect of the company because we all contribute, directly or indirectly, to emissions. For packaging and promotional materials (client gifts, promotional displays, advertising and communication material), evaluating the carbon footprint is part of the development process teams must follow. Environmental impact is just as important as economical, technical and commercial aspects. High-performing video-conferencing tools are being used to reduce business travel. Rules have been established regarding the shipping of merchandise and logistics teams work to optimize shipping by air and truck.

Consumables 0,2 %

Buildings

Fees

4 %

4 %

Industrial waste at sites 1 %

Freight

Transport of persons

11 %

Liquid refrigerants 0,3 %

Energy 5 %

I.T. 1 %

1 %

Raw materials

12 %

12 %

Food services 0,5 %

End of life of Packagings & POP 7 %

Machines

Promotional materials

Packagings

14 %

27 %

Source: Global Carbon Assesment, all French sites,fiscal year 2011, Toovalu software.

Emissions posts GHG Emissions (in Tons) 2012

n° Description CO2(Tons)

CH4(Tons)

N2O(Tons)

Other gases(Tons)

Total(TCO2e) Uncertainties

1 Direct emissions fromfixed combustion

2125,98 0,19 0,1 2159,68 107,98

2 Direct emissions frommobile thermic motor source

3 Direct emissions from processes excluding energy

4 Fugitive direct emissions 0,05 170,66 51,2

5 Direct biomass emissions(soils and forests)

Sous-total 2125,98 0,19 0,10 0,05 2 330,32 159,18

6 Electricity use 853,14 102,38

7 Indirect emissions linked to vapor heat or cold use 0,00 0,00

Sous-total 853,14 102,38

Greehouse gas Emission Report, French regulatory perimeter (Beges)

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Since 2011, the Group, following new French regulations, publishes a Greenhouse Gas Emissions Report (GGER, called Beges). This report primarily focuses on emissions linked to energies used at sites while the overall (voluntary) Carbon Assessment takes into account emissions generated by our activities on a wider scale. In 2012, the Asian region carried out a voluntary carbon assessment and put in place an action plan to reducethe Group’s carbon footprint in 7 subsidiaries in the region. Priority was given to air transportation of merchandise because it represents an important partof the regional carbon footprint.

French regulatory greenhouse gas emissions report, Clarins France 2012. Toovalu software.

2011 2012 Change

Electricity 13 702 14 106 3 %

Gas 12 305 10 597 -14 %

Fuel 249 244 -2 %

Total MWh 26 256 24 947 -5 %

Emergy use (French sites) in MWh

White hoe

39



Limit energy use

Energy use represents 5% of the Group’s global carbon footprint at industrial and administrative sites in France which is an annual energy use of 25,000 MWh oran average energy use below 0.1 KWh per unit produced.The environmental report done internationally showed that the Group’s energy use across its subsidiariesis about 12,000 MWh or 30% of worldwide consumption (37,000 MWh).

As a way of reducing greenhouse gas emissions from energy use, the Group has chosen to use renewable energy sources when possible, high-performing equipment and improved methods and processes: ungrouped switches, light timers, sensors, new servers, lower temperatures in certain cleansing processes, etc… All of these help lower CO2 emissions as well as lowerthe energy bill. A goal was set to reduce energy use by5% for the year 2013 compared to 2012.

Today, because administrative offices in Neuillyare spread out among several buildings, it is difficult to target minimizing energy use at the head office.In 2014, a new, low energy “green” building will openand will house the entire head office in one location. This represents huge progress in this area. The goal is to gain 30% in energy use at the head office between 2012 and 2015.

Water consumption - Total sites France

2011 2012 VariationTotal m3 54 888 53 122 -3 %

40



Save water

Our bodies are 60% water and need this water in order to function properly. Water is also essential for our products since water generally makes up for 50% of our skin care products. Source of life, water is a rare, fragile resource that is unequally distributed throughout the world.Less than 3% of the Earth’s water is fresh water.The water cycle makes this a renewable resource but it is still vitally important not to release unclean water into nature. This is another serious environmental concern the Group takes seriously.

The Group is striving to limit water useand avoid its pollution

The water cycle explainedby Clarins to clients duringthe launch of HydraQuench Serum in 2012.

Water usage at our subsidiaries’ logistics and administrative sites (13 countries) is around 30,000 m3. In France, it is 53,122 m3 at the 4 industrial, logistics and administrative sites, therefore an estimated worldwide water usage of 83,000 m3.

At Pontoise, the osmosis water purification systemhas been in place since 2009 to guarantee high quality water used in product manufacturing. It does, however, have a disadvantage in that it is a highly aquavore system. Research is taking place right now to decrease water consumption but also maintain the safety benefits ofthe osmosis-purified water. Since September 2007, automatic thermal decontamination has been used to clean vats which makes for a better control of water quantities and detergents needed to clean the product-filling lines. Other cleansing operations were optimized and automated to reduce water use.

At industrial and logistical sites, all loading and unloading areas are airtight and made to recuperateany accidental spills so as to avoid the risk of groundwater pollution.

Internationally, the same processes apply to logistical sites. In Switzerland, two reservoirs (30 m3) capture rain water to supply running water to two buildings at the site.

2011 2012

Dangerous waste (T) 214 273

Non dangerous waste (T) 2 484 2 939

Total waste produced (T) 26 256 3 212

Waste-to-energy recovery (T) 1 226 1 330

Recycling (T) 1 472 1 871

% Recycling (T) 55 % 58 %

Waste management - Total French sites

41



Reduce waste

Avoiding and reducing waste are also part of our environmental policy that is managed by a dedicated team of people restructured into a group in 2012 as part of the Hygiene and Environmental Safety Department. Personnel is regularly trained regarding the recycling and sorting methods required to treat dangerous waste (solvants, alcohol, inks, etc.) and regular waste (paper, cardboard, plastic, glass, metal and wood).

The Clarins Group invited the sculptor Aligna, nicknamed the Gentleman Flower, to create flowers (cf. photo) made from 100% recycled material from

obsolete packaging and POP material fromthe Group’s different brands.

Recycling has increased by 3%

Every year, new initiatives are put in place to improve waste management and increase our recycling efforts.In 2012, at the different sites in France, various programs made it possible to recycle 1867 tons of material. As a frame of reference, the environmental benefits associated with these recycling programs are estimated to be:15,000 MWh of energy (or, an average domestic use of 1460 households in France), 52,000 m3 of water (the Group’s annual use or 960 French households) and800 tons CO2 equivalent (source: Eco-Emballages e-tons). In 2012, recycling increased by 3% at French sites.

Similar initiatives have been developed internationally in subsidiaries that have warehouses: in the UK, they do their own sorting and compacting of plastic materials. In Canada, there is a ‘Zero Waste’ goal and as a result, trainings are carried out for their personnel with this in mind. In France, an awareness campaign for all employees took place from June-September 2012:all employees were invited to bring in all packaging material from the Group’s skin care or fragrance products so that they could be properly recycled.

2011 2012

Road 61 % 62 %

Sea or river 33 % 32 %

Train 4 % 5 %

Air 2 % 2 %

Total tonnage shipped (%) 100 % 100 %

Shipping from Amiens per transportation mode

42



Minimize the impact of transportation

Products shipping11% of our GGE are generated by our activities in France, and shipping represents the 4th source of these emissions following packaging, promotional tools and business travel. This includes the transport of suppliers’ packaging to our production sites, the supply of finished products from our sites to the logisitics platform and finally, product shipping from Amiens to our clients worldwide. Air transportation, while relatively low in volume,has a high impact on the environment and thereforeis the object of a restrictive authorization procedure. The services involved in the management of this kind of movement are all aware of the environmental concerns and are attentive and avoid unnecessary travel: ordersare grouped, direct shipping from the supplier tothe final destination for POP materials takes place whenever possible.Finished product shipping managed at the Amiens site to the rest of the world: 61% by truck; 32% by ship; 5% by train and 2% by air. Air freight (2%) has been stable for several years.

Cornflowers

43



Business travelsBusiness travel represents 12% of the Group’s GGE (in France). Over the year 2012, business travel completedby employees of the Group worldwide represented16 million km/by car (20 countries reporting) and28 million km/by plane (17 countries reporting).This area has seen different action plans put in place to reduce impact: employees are requested to minimize their business travel, especially by plane, and to optimize the use of alternative and CO2-reducing methods when available. 9 subsidiaries or sites are equipped with video-conference tools that make it possible to limit business travel while maintaining a link with business partners: Geneva, Hong Kong, Montreal, Neuilly (2), New York, Pontoise, Singapore and Strasbourg. To incite carpooling, since 2010, a website was set up for employees to use either for an on-going transportation need or punctually to facilitate carpooling. For national travel, the UK and Japan optimize the use of train travel which represents the majority of transportation costs of these two subsidiaries.Concerning company vehicles, rules apply in France and at all subsidiaries to reduce the carbon footprint per distance covered. In 2012, the maximum allowed was 140g CO2/km with local adaptations like in Canada where climatic conditions require using more powerful vehicles.

Land footprint

On the Group’s scale, the area used by administrative and logistics buildings totals 217,875 m² worldwide. French sites occupy 105,457 m² of floor area. Whenever possible, the sites undergo landscaping approval.For example, when the Amiens site was built, more than 8500 trees and shrubs were planted on the site’s12 hectares. New construction projects comply withthe architectural environment, such as in Bavaria, where the site has small windows to fit in with the local spirit.

Oats

44


Limit unnecessary production and improve the supply chain

—

Limit unnecessary production and improve the supply chainAdjusting stock levels and sales forecasts, reducing product returns and destructions, finding ways to save, reinventing processes and the logistics “flow”: all ofthese are imperative for the economy andthe environment and are at the heart of the Group’s concerns. Waste is not allowed and a product’send-of-life is studied in order to maximally reduce excess or obsolete stock. The SCOOP project brings together employees from all areas of the Group to work togetherto reduce impact.

45


Raise awareness concerning Responsible Development values

—

Raise awareness concerning Responsible Development valuesThe Group accords extreme importance to raising awareness of Responsible Development, both internally and externally. Raising awareness among employees is the main mission of the Responsible Development department, which works directly with the Group’s Presidency. Communicating these ‘responsible’ valuesto all concerned is the work of everyone: clients, advisors, distributors, suppliers, journalists, etc.

46



Priority to raising employees’ awareness

Communicating the values and stakes behind sustainable development does indeed target employees first and foremost so that we can all work together as one.These values are included in the introduction seminar for all new employees. Detailed information can also be found on the company’s intranet site and an informative monthly e-newsletter (also translated into English)has been published since 2009. Each subsidiaryhas appointed a Responsible Development Coordinator who is in charge of communicating good practices and initiatives between the head office and various countries. Seminars are also a great time to remind employees what the Group is doing in regards to its Commitments.

Employee dedication to the company’s values and commitments is a key to success.

During yearly evaluations, employees have a chance to talk about their own responsible commitments they apply at work. It is a great way to measure their understanding of the stakes at hand. In 2012, three of the Group’s Responsible Commitments at the top of employee concerns were:• Saving resources and limiting GGE (commitment no. 6)• Developing products, packaging and POP elements with

the lowest possible impact on the environment (no. 4)• Promote and communicate responsible development

values (no. 8)

The Group’s employees, supported and stimulated by their works’ councils, are actively involved in the Group’s values. The variety of initiatives in France and abroad is representative of all the challenges that Responsible Development aims to meet. Many take part in activities to collect funds for medical research: Polyar’trottons,La Parisienne, les Restos du Coeur, and many other races in London, New York, Quebec (“Fast and Female”), and in the rest of the world, examples include the supplying locally grown fresh fruits and vegetables to corporate food services; delivering fresh and organic fruit and vegetables to the office to be taken home (Fresh Corner service in Neuilly); setting up systems to recover used clothing, etc.

47



Raising business partners’ awareness

An ethics charter has been defined for suppliers. Subsidiaries and agencies regularly implement local initiatives to raise their partners’ awareness. This may be part of their standard exchanges, or sometimes for specific events. There is a forum for the Group’s responsible commitments in the primary communications tools such as the Clarins Group magazine published by Travel Retail, in C à Vous (magazine for Clarins France beauty advisors), andat the various sites. A film about the Clarins brand’s values is shown during internal training sessions,at training sessions for beauty advisors and at many sales meetings. Christian and Olivier Courtin-Clarins actas ‘ambassadors’ for the brand during press conferences all over the world and receive an enthusiastic welcomeby journalists.

In 2012, for the launch of Womanity Eau pour Ellesby Thierry Mugler, the Clarins Fragrance Group launched a press campaign among journalists to raise awareness around its vision of Responsible Luxury. Luxury based on talent and inspiration, high quality know-how and continual efforts to reduce environmental impact.

Patrick Schwab, General Manager of the Clarins Group, illustrates the Group’s commitment to renewable energy in this advertising poster in Geneva, Switzerlandin November 2012.

The Group is aware of the important roleit plays when promotingSustainable Development valuesamong all of its partners.

Whenever possible, the Group is ready to mobilize everyone involved, including neighbors. This isthe case for the subsidiary in Switzerland who organized an awareness campaign regarding renewable energy in Geneva in 2012.

48



Educating the general public

In addition to the information available to the general public on the brands’ websites, the Group’s responsible communication is growing. In a series of articles which appeared in the magazine Neo-Planet (see photo left) and in Terra Eco, the Group highlights its understanding of biodiversity and its know-how of local populations through its sustainable development programs.

In 2012, the Group participated in a major Sustainable Development event: the Earth Workshops which take place every year with over 800 participants from all over the world. Christian Courtin-Clarins partipated inthe different debates and presented his vision of Responsible Development and co-creation withinan enterprise.

Christian Courtin-Clarins at the Ateliers de la Terre

(Global Conference)

49



Raising the consumer awareness

New kinds of sales activities are an apportunity to share the Group’s vision with consumers worldwide.Built on these values, they highlight the projectsthe Group supports mainly helping needy childrenand the protection of nature.

In Canada, Clarins celebrated its 6th annual ‘Month of Hugs’(Mois des Câlins): with the purchase of a lip product, half of the sales price went to the St. Justine Hospital to help sick children. 107,000 Canadian dollars were raised in 2012. It has become a special sales activity that clients look forward to every year. Likewise,in Portugal, a Christmas sales activity benefitedthe organization ‘Novo Futuro’ (new future) forthe second year in a row. This project helps build homes for children who do not have a family structure.

Subsidiaries actively participate inthe communication of the Group’s values and commitments.

Clarins USA continued throughout 2012 its action to help feed needy children and fight malnutrition. Working with the FEED project, this sales activity supported food programs managed by the United Nations. Each FEED bag raised enough money to supply a certain number of meals (5, 15 or 25 depending on the bag’s value) to school children. The Clarins Million Meals Concert for Feed held at the Lincoln Center on May 30th in New-Yorkwas a major achievement in 2012. The goal is to provide 1 million meals over a 2 year period. During Christmas, the operation is carried out on the e-commerce website of 4 countries (Germany, Spain, France and the UK) which raised money for 180,000 meals that will be provided to needy children.

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Winning entries to the Biodiversity photo contest in Singapore, in 2012.

Lizard by Wong Chek Poh,

Park and Health by Li Zhi Wang,

Vision of Future by Dr Ee Kiam Shua.

Act for nature Through a campaign ‘A City in a Garden’, Clarins Singapore promotes the value of biodiversity and raises awareness among clients about the need to protect it.A photo contest which took place between June 2011 and June 2012 encouraged Singapore residents to get outside and enjoy the many gardens and parks, the countryside or seaside to learn about biodiversity. The Grand Prize winner was Dr. Chua Ee Kiam, an amateur photographer and fervent adept of biodiversity. His photos capturedthe beauty of wildlife and rare species of the fauna around Singapore and allowed residents to discoverthe hidden treasures of their highly urbanized region.As a prize, he won a trip to Burkina Faso where he will learn more about the local biodiversity there andthe actions being led by the Clarins Group to help preserve and help local populations.

51


Support members of staff and encourage their development

—

Support members of staff and encourage their developmentThe company's employees represent one its most important assets and the goal of HR is to provide leadership and encourage professional education as well as mobility between brands and countries as well as a diversity that respects differences. Ongoing internal communication encourages the exchange of information and contributes to a cohesive team and to motivatingthe staff.

Alchemilla

52



Main social indicators

WorldwideToday, Clarins has 6,800 employees worldwide. The large majority are women (86%), but there are also men inthe ranks (14%). The average employee is 37 years old and has been with the company six years.

FranceThis information is calculated using the total number of employees (permanent and temporary) as of31 December 2012.

The total number of employees increased from 2011 to 2012, with an additional 12 long-term temporary team members being added as of 31 December 2012. This represents +0.8% when compared to the previous year.

The percentage of women (70%) and the number of women in management (70%) has remained the same.

The average age has also been stable. The average age of employees in 2012 was 41.2 years old.The average age varies according to the site:• Production sites: 43.0 years old in 2012 compared to 42.9 years old in 2011• Neuilly sites: 38.9 years old in 2012 compared to 39.1 years old in 2011

An employee's length of service to the company remained stable as well and was 10.5 years in 2012.The average length of service varies according to the site:• Production sites: 12.3 years with the company in 2012 compared to 12.0 years in 2011• Neuilly sites: 8.3 years in 2012 compared to 8.6 years in 2011

A significant number of interns are welcomed into the company each year and receive training by the various teams. In 2012, there were 94 trainees from prestigious business schools and universities who spent six months at the company's French locations.

Recruitment and internal mobility

During 2012, we recruited 127 long-term temporary employees, 73 of whom work at the Neuilly sites and54 of whom work at various production sites.

Mobility remains a top priority within the Group, andit continues to play an important role withinthe openings at company headquarters.

As a result, in 2012, 28 employees had the opportunity to grow with the company and move into new departments, new companies or business lines.

A valuable communication tool for disseminating information about openings at company headquarters as well as some of its subsidiaries is the Espace Carrière et Mobilité (Careers and Mobility Area). This internal job board was launched in 2009 and is accessible viathe Group's Intranet.

53



Disability policy

Defined according to the Groups four values and work in this area over the last few years, the company's disability support group had significant achievements in 2012 with regard to its goal of making the entire company aware of the needs of the disabled workforce and meetingthe expectations of this group of individuals.

The disability support group's activities helped to bring this theme to the forefront for all employees. Its goals are clear: remove taboos, create meaningful interaction, encourage valuable recognition of disabled workers and offer purposeful interaction with the disabled members of the team. This contributes to providing them witha superior work environment.

To reach these goals, a Disability Commission was created in 2012. It is made up of staff representatives, individuals from the Human Resources management team, and managers within the Disability Focus Group.

This Commission is a forum in which all types of health issues can be discussed and where solutions can be found that address the specific needs of each disabled worker.

Used throughout Clarins sites in France, the word disabled is, in fact, associated with high performance. 1,500 employees in France participated in the 2012 Disability Challenge, as part of six teams and three educational challenges that brought participants together for a common goal. As a result of a high level of involvement and participation, € 15,000 were raised for three associations devoted to aiding the disabled.

In 2013, the disability support group will continue to pursue innovative ideas to show that skills, and not differences, are at the heart of our exchanges.

White Tea

54



Training policy

For several years, Clarins has devoted a part of total labor costs to employee education in a wide range of areas: job-related expertise, personal development and management training.

2012 training was successful in terms of financial investment, time devoted to training and equal opportunities for all employees.

In 2012, the number of employees receiving training was significantly higher than in 2011 within the three headquarter entities (Clarins, Clarins France and CFG): 466 employees received training at least once (71% of total staff), 757 training activities took place and around 9,900 hours of training were offered. This resulted inan overall training expenditure of 2.47% of total labor costs.

Clarins University was founded two years ago and, in 2012, it continued to be a forum for offering specific training cycles.

Again this year, the collective development of job skills for employees at headquarters continued to be emphasized. In fact, this initiative represents 55% of all training activities that occurred during the year. The focus was on developing the following programs:• For Clarins France and Clarins, the Category

Management cycle for marketing, sales and merchandising teams.

• For CFG France, the sales cycle for sales teams.• For Clarins France, the "sales tips" training for teams

in department stores and institutes,• For the Purchasing, DOSI and HR teams,

the professional cycle.

The Clarins Group has continued to investin developing its teams' managerial skills through Manager Engagements and the Manager training cycle.

55



The Intranet Group, a place to communicate, share and exchange information

For several years, the Group's Intranet has followedthe daily activities of the company's employees in France and abroad. Articles and videos on the Intranet shareup-to-date information about the company's brands and new products but also highlight the Group's strategies and new projects. It provides a place where employees and management can share ideas. The Intranet isa repository for company history and the company's core values as well as a place where new employeescan become familiar with the Group after first joining the team. It also houses internal tools such as employee biographies and organizational charts available to all, facilitating daily team work. The Intranet also provides an entire section devoted to Responsible Development as well as a mini-site focused on the integration of disabled workers, two important movements at Clarins.Due to the Intranet's role as an indispensable communication tool within the Group, the siteis also accessible by all subsidiaries.

The Group's Intranet is a place to discover, discuss and move forward together.

56


Establish the Group as exemplary socially-minded enterprise

—

Establish the Group as exemplary socially-minded enterpriseThe Clarins Group supports medical research carried out by the Arthritis Foundation as well as diverse associations including cancer support groups such as "Look Good Feel Better" in France, the United States and the United Kingdom. This same organization is called "La Forsa e il sorriso" in Italy. These entities help female cancer patients combat the appearance-related side effects of cancer treatment. Since 1997, Clarins' ‘Most Dynamic Woman’ Award has been awarded for actions promoting child advocacy. This spirit of community and cooperationis strongly supported in all locations, by all the company's brands and by all employees.

57



Arthritis Foundation Courtin

Severe rheumatism affects more than 1% of the French population--more than 700,000 individuals,4,000 of them children. The goal of the Courtin Arthritis Foundation is to promote and contribute to rheumatism research and encourage the discovery of innovative treatments, leading to improved communication and scientific training sessions.The Foundation was established as a non-profit on26 June 2006. Its current incarnation allows it to make an even greater impact; in 2008, the foundation absorbed the Rheumatoid Arthritis Research Association (Association pour la Recherche sur la Polyathrite or ARP) which had been co-founded by Jacques Courtin-Clarins and Denis Bloch in 1989. Rheumatoid arthritis mainly affects women and Mr. Courtin-Clarins wantedto improve these women’s feeling of well-being.The scientific board of the Foundation brings together leading European research scientists and rheumatologists and contributed € 759,000 to related research in 2012. The Clarins Group finances operational costs so that the Foundation can use 100% of donations for research. Over 600 projects have been completed and they all have the same goal: give hope to those affected by this serious illness.2012 was a year of innovation and multiple successes.In 2012, a major step forward in fund raising wasthe hosting of the Foundation's first charity gala. It was entitled "An evening of innovation-advances in research." This event was a great success and raised €160,000 for research and for the creation of a much-needed annual meeting for long-standing donors.

A spirit of community and cooperationis strongly supported in all locations, by all the company's brands and by all employees

Happiness bracelets: the collection of four braceletswas sold at the 270 Beauty Success perfume retailers and raised € 35,000 for rheumatoid arthritis research. Asa tribute to their grandmother Maria Luisa, who suffered from rheumatoid arthritis, Virginie, Claire, Prisca and Jenna, the four granddaughters of Clarins’ founder Jacques Courtin-Clarins, created four different bracelets for the Summer 2012 collection, each highlightinga miniature Clarins product. To explain their broader meaning, the four young women recall the words oftheir grandmother: “Beauty is the best way to combat illness. When a woman feels more beautiful, she feels better and suffers less. "

Roses

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Etincelle Association

The Etincelle Association is active in the Paris regionand the Languedoc-Roussillon region of France. Clarinshas contributed to the association's finances sinceit was founded. Trained in the Clarins' Method,its estheticians have received specific information on socio-esthetics. Close to 800 services were offered in 2012.

Belle et Bien

This is the new name of La Vie de Plus Belle (Life is Even Better). This organization is active in 22 hospitals in France. In 2012, 2,144 women benefited from248 workshops organized by estheticians who donate their personnel time. When the workshops are finished,a collection of products is offered to attendees.The organization is active abroad, specifically inthe United Kingdom, the United States and Canada under the name “Look Good Feel Better” as well as in Italy where the name remains essentially unchanged as“La Forsa et il Sorriso”.

59



Dynamic Women : a growing community

Since 1997, first in France and now in 13 countries, Clarins ‘Most Dynamic Woman’ award supports women who devote their energy to improving the lives of disadvantaged children. These women offer hope and dignity to the children they serve. 70 Dynamic Women have already been recognized throughout the worldand they make up a formidable community within Clarins.

The Clarins ‘Most Dynamic Woman’ award continues to support the associations involved in the years that follow an Award. This ongoing support is valued bythe associations for the security it provides fortheir projects. After the initial donation is made by Clarins, internal initiatives contribute additional financial support. Company employees and committees generously contribute to the associations as well.In 2012, Clarins spearheaded a colorful and creativefund raising effort: perfume bottles containingEau Dynamisante individually decorated by well-known artists. These unique works of art were then auctioned off.

For 15 years,Clarins ‘Most Dynamic Woman’ award support women who work to improvethe lives of disadvantaged children

The impact of such action is not lost on Clarins’ subsidiaries. They also faithfully take care of "their" dynamic women, with or without an official award. Spain, Malaysia (Clarins We Care), Italy, Switzerland, Great Britain, the United Sates and other locationskeep the momentum alive.

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Germany

In its seventh year, the Courage Award was bestowed on Christine Bronner. She is the founder of the "Mobile Children's Hospice of Munich" (AKM). This organization provides qualified help for families of children who are seriously ill with no cure in sight. The organization accomplishes its mission with a mindset unique to Christine Bronner and her team: "Don't look at life asa series of one day following another—live each day toits fullest!" Life is synonymous with joy and delight and time spent with parents, brothers, sisters and friends should be happy." In Germany, sustainability is simply expected: each award recipient receives € 20,000 andthen € 5,000 for the next three years.

France

The new link in the chain of the Clarins’ heartis Lisa Lova-Smith. She is the recipient ofthe ‘Most Dynamic Woman’ award for 2012, the 15th year that this award has been in existence in France.She is being honored for her advocacy for children in Ghana. During a trip to Ghana, this former fashion editor was deeply moved by the plight of the children there. As a result, she radically changed her life and now devotes all her energy to helping children who are orphaned or separated from their parents due to economic or health reasons. Her foundation, Orphan Aid Africa, protects children and works to keep families together. The ‘Most Dynamic Woman’ award will contribute to making thisa sustainable project.

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United Kingdom

The 2012 Dynamic Woman in the United Kingdomis Lucy Buck. This award supports the association that she created to help abandoned children in Uganda. Child’s iFoundation focuses on ensuring that each child is cared for, and that family ties are maintained by placing children within their extended family. This isthe 11th consecutive year that the Clarins UK subsidiary has awarded the ‘Most Dynamic Woman’ award and,this year, Christian and Olivier Courtin-Clarinswere present for the ceremony.

Switzerland

In 2012, Clarins welcomed two women intothe Dynamic Woman family: Beatriz Aristimuño and Vanessa von Richter along with their Anouk Foundation. Founded in Geneva in 2008, the Anouk Foundation improves hospital stay conditions and hospital arrivals by creating an appealing and comforting environment.

Decor has a direct impact onthe morale of the children being cared for. We would like to thank Clarins for this wonderful gift thathas changed the daily atmosphere.”

Dr Hugo Ubieto, Saint-Gall Hospital, Switzerland.

Their teams of artists decorate and brighten wallsby adapting their work to the specific requirements of each establishment. They work hand-in-hand with caregivers. It has been proven that a welcoming environment offers multiple benefits for both the patient and the medical staff. Its positive effects contribute to successful care.

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Do more, do betterand enjoy doing so.”

"Do more, do better and enjoy doing so" has, sincethe beginning, been the company's motto and this isthe phrase that best expresses its pragmatic and practical vision for Responsible Development.

On 6 March 2012, when Christian Courtin-Clarins received the title of Chevalier de la Légion d’Honneur from the Ministry of Ecology and Sustainable Development, it was recognition of his long history of working for humanistic and ethical leadership, servicein the name of family businesses, community, citizenship and respect for the environment. It was recognitionof this splendid human journey, based on the values of founder Jacques Courtin-Clarins and perpetuated byhis two sons, Christian and Olivier. It is a source of pride and motivation for everyone in the company whois committed each year to bringing new projects to fruition. These projects differ in their execution but all are in pursuit of the same objective: make life better today as well as tomorrow and proudly promotethe company's values:Respect, Innovation, Performance and Sustainability.

The company's valuesmake its employees proud.

Yvette JamesHead of Responsible DepartmentGroupe Clarins23, avenue de Neuilly - 75116 Paris

[email protected]+33 1 46 41 41 80

Responsible Development Make lifemore beautiful

Chrstian Courtin-Clarins receiving the title ofChevalier de la Légion d’Honneur from the hands of Bertrand Piccard at the Ministry of Ecology.

Documents

Responsible Development - groupeclarins.com Clarins... · Responsible development is an everyday matter which we experience like an incentive for change. Let’s rise to ... initiative