Dive Brief:
- L'Oréal Groupe and credit specialist Chenavari Investment Managers launched a debt fund last month to help small- and medium-sized enterprises address scope 3 commitments, according to a Nov. 18 press release.
- The Solstice fund aims to enable easier supplier access to funding to make progress on decarbonization industrial projects and initiatives, according to the press release. Outside institutional investors can also contribute to the fund.
- L'Oréal has committed an initial €50 million ($53 million) to the Solstice decarbonization fund. Qualifying projects can include industrial process and supply chain, clean energy and clean transportation.
Dive Insight:
The Solstice fund builds on L'Oréal’s existing sustainability efforts. In 2020, the group launched L'Oréal for the Future with the intention of driving decarbonization throughout its value chain, including raw material sourcing, manufacturing and packaging. The program also engages with L'Oréal’s suppliers to address emission targets.
The company also has set up a Green Sciences transition program that targets the sustainable sourcing of raw materials, according to the press release.
Scope 3 emissions represent a majority of L'Oréal’s carbon footprint, according to its most recent climate transition plan. The company aims to reduce its scope 3 emissions by 28% by 2030, compared to a 2019 baseline.
A majority of the company’s scope 3 impact is related to supplier activities, according to L'Oréal’s climate plan.
L'Oréal intends to train and support its suppliers’ understanding of climate change, and directly work with them to reduce scope 1, 2 and 3 emissions. The cosmetic company will also help its suppliers identify the main drivers of industry decarbonization and set expectations. Increasing supplier transparency and tracking for product emissions is also a main goal.
Securing funding for decarbonization initiatives and projects can be a hurdle for many suppliers, and collaborative financing tools can often help bridge that gap. In 2023, retail giant H&M launched the Future Supplier Initiative in partnership with Singapore-based bank DBS to enable suppliers to access infrastructure investment loans.
