L’ORÉAL ANNOUNCES THE LAUNCH OF A NEW CIRCULAR INNOVATION FUND TO SCALE BREAKTHROUGH CIRCULAR INNOVATIVE SOLUTIONS FROM AROUND THE WORLD
Managed by Demeter and Cycle Capital, the impact investing Circular Innovation Fund
aims at scaling growth stage circular innovations
Clichy, 21st April 2022 – Acknowledging the increasing pressure on natural resources and the urgent need to scale-up circular economy solutions, L’Oréal announces on Earth Day the creation of the Circular Innovation Fund. As an anchor investor, L’Oréal is contributing 50M€ as part of its L’Oréal for the Future sustainability program to this new 150M€ fund. Operated by Demeter and Cycle Capital, pioneers and leading cleantech-focused capital managers firms, the Fund will also benefit from a broad range of investors including, strategic investor Axens, family offices including Haltra and Claridge, as well as private investors and the managers.
The Circular Innovation Fund will support start-ups and companies across North America, Europe and Asia, which are developing circular use of resources across various sectors, including new materials from the bioeconomy, circular solutions for packaging, recycling & waste, logistics, eco-efficient processes.
As an impact investing fund the Circular Innovation Fund utilizes a robust, reliable, and innovative impact measurement methodology which integrates due diligence and continued monitoring on critical non-financial KPIs including greenhouse gas emissions reductions, resource use and diversity over the investment horizons of portfolio companies.
Projects supported by the Circular Innovation Fund target as examples companies like the circular fashion start up For Days, a service starting a circular revolution by recycling consumers' old clothes with the Take Back Bag and offering a robust catalogue of 100% circular, recyclable and eco-designed clothing. A second project, Aphea.Bio whose mission is "Applied Nature for better Agriculture" develops new and superior agricultural biologicals to reduce or substitute chemicals application.
“L'Oréal is the initiator of the Circular Innovation Fund and its first investor with 50 million euros. I am convinced that finance can play a decisive role in mitigating the impacts of climate change and can be a vehicle for progress. We believe impact investment is one of the ways we can contribute to spur innovation in the circular economy space as part of the L'Oréal For the Future program. Impact investing is a perfect illustration of sustainable finance, that is to say, the ability to combine financial value creation with environmental and social value creation”, said Christophe Babule, Executive Vice-President, Chief Financial Officer of L’Oréal.
“As organizations and individuals are feeling the pressure of climate change, sustainable investing strategies will continue to soar. This strategic collaboration between impact investors and established institutions comes at a pivotal point as we need to re-think how we consume goods globally. The Circular Innovation Fund has the potential to drastically re-design how we extract, manufacture, consume and dispose of goods and materials. Together, we can deliver value to the market with returns and, most importantly, deliver purpose and new innovation-driven technologies developed by talented entrepreneurs that have the potential to mitigate the environmental crisis humanity faces”, explains Andrée-Lise Méthot, Founder & Managing Partner of Cycle Capital and Stéphane Villecroze, Co-Founder and Managing Partner of Demeter.
“The latest IPCC report confirmed that “it is now or never” that we can act to stave off the worst impacts of global warming. As a leader, we want to act in two complementary and strategic ways: on one hand, reduce the impact of our business – by sourcing our ingredients in a sustainable way, using more materials from recycled origin, etc. On the other hand, contribute to addressing some of the most pressing environmental challenges, such as waste management, plastic pollution and also biodiversity loss. That is why, in addition to be the anchor investor leading the new Circular Innovation Fund, this year, we continue to invest to regenerate biodiversity through a new ambitious and innovative French tech project”, comments Alexandra Palt, Chief Corporate Responsibility Officer and CEO of the Fondation L’Oréal.
Update about L’Oréal Fund for Nature Regeneration
The first 50M€ L’Oréal impact investing fund, the L’Oréal Fund for Nature Regeneration, has been launched in June 2020. L’Oréal has teamed up with Mirova, an asset management pioneering in natural capital investment. It gets involved in the seed phase to catalyze innovative, scalable financial models based on carbon credits and other ways of creating value from ecosystem services. The Fund will include projects that support the restoration of forests, mangroves, marine areas and degraded lands.
Last year L’Oréal started with a 1st project in the UK, the investment in Real Wild Estates Company (RWEC). It aims to restore up to 50,000 hectares of degraded landscapes across the UK and more widely in Europe.
This year, the Group is investing in Rize, a French technological start-up created in 2020 and part of the Station F “Future 40” ranking. Its mission is to accelerate the low-carbon agricultural transition by facilitating access to carbon financing for farmers. Rize has developed a complete and unique digital solution to support farmers from the diagnostic phase of their farm to the marketing of carbon credits, including technical assistance for improving practices and impact monitoring.
The L’Oréal Fund for Nature Regeneration is investing in this start-up, aiming to:
- regenerate more than 2.5 million hectares of agricultural land,
- sequestrate 4 million tons of CO2,
- support 75,000 farmers in France and Europe.