It’s been a tough year for sustainability professionals. Regulatory rollbacks are undermining progress, many companies are defunding or deprioritising ESG, and global polycrises are pushing people towards overwhelm and apathy. Amid it all, some companies remain committed to change, including beauty giant L’Oréal Group, which has managed to unlock over €300 million to scale decarbonisation and innovation.
At the Vogue Business Fashion Futures event in New York on Thursday, chief corporate responsibility officer Ezgi Barcenas revealed exactly how she made it happen. Here’s what you missed.
This conversation has been edited for brevity and clarity.
Vogue: You have managed to unlock €345 million for impact, innovation and decarbonisation across different projects. Why and how did you set up these funds?
L’Oréal has been looking upstream and downstream to reduce emissions across our entire value chain. Last year, we sourced 97 per cent of our electricity needs for our own operations from renewable sources, and we have reduced our Scope 1 and 2 emissions by half versus 2019. But the big challenge was Scope 3 (emissions the organisation is indirectly responsible for throughout the entirety of its supply chain). The more we have invested, the more we have understood where the challenges and opportunities are, and the more we have been able to acutely define where more work is needed.
Last November, we announced the Solstice Fund, which is a €50 million debt fund, with the idea of helping our supply chain partners decarbonise. It’s a way for us to test and learn innovative financing mechanisms.
Ultimately, we’re working towards our 2030 goals and our 2050 net-zero ambition, but there are very specific challenge areas where we are looking for new projects and partnerships. That’s why we launched the €100 million Sustainable Innovation Accelerator, which is designed to identify, pilot and scale solutions, from raw materials sourcing and bio-based ingredients to new circular packaging materials and low-carbon solutions for product end use. That sits alongside our €50 million Circular Innovation Fund, an impact investment fund focused on scaling break through circular innovative solutions.
The other critical element is climate adaptation and resilience, which is why we launched a Climate Emergency Fund in 2023. It’s a philanthropic fund of €15 million, which is there to invest in the preparedness and response of communities to the impacts of climate change. That includes a big effort to invest in mental health and boosting individual resilience in Kenya, reducing mental health stigma and supporting community efforts to that effect. We also have an innovative insurance mechanism in India, which helps 50,000 women workers in the informal urban economy access cash benefits or insurance payouts if temperatures reach a certain level. That has proven to be highly effective and scalable.
Heat stress lays bare the tension between climate mitigation and adaptation. Workers are caught in the middle.
On the resilience side, there is also the €80 million Fund for Women and the €50 million Fund for Nature Regeneration, the latter of which backs natural carbon sinks by supporting reforestation, wetland restoration and regenerative agriculture. That’s about understanding our impacts on nature and how we can use nature-based solutions to support climate action. So far, we have funded 17 projects in 21 countries.
Vogue: Who decides where investment is needed and how to measure its success?
With the Solstice Fund, the idea is to help small and medium-sized enterprises that are very strategic partners to us, but maybe aren’t as advanced in their sustainability journeys and need additional financing and support. It’s a debt endowment fund. We’re the investment partner and the fund manager is Chenavari. We wanted the fund to be independent from us, to be able to attract other investors into the effort, because we find that, when we ask supply chain partners to decarbonise or bring in a new solution, their other customers are often asking the same questions. So the more we can pool funding and come together, the more we’re able to accelerate and scale our efforts.
Others have a different structure. For example, in September 2024, we entered into a three-party agreement with biotech innovator Abolis Biotechnologies and chemical manufacturer Evonik to identify more efficiently some of the alternative ingredients that could help in our pursuit of green chemistry, and ingredients from natural and recycled sources. The bigger challenge was to help bring the alternatives we found to scale, so we brought in Evonik as an industrial partner, to help operationalise Abolis.
The idea is not to pursue a single metric, but to really understand the impact of climate change on the well-being of consumers and communities around the world, and how we can support them in the future. So each fund has its own governance model, KPIs and success metrics that we follow. As the funds come to an end, we will start thinking about how we can apply the learnings and renew the fund, extending the timeline or scaling the efforts further. If it’s internally managed, it’s a cross-functional team. If it’s externally managed, it’s still a cross-functional team. The governance is designed to meet the needs of the effort.
Vogue: Working with suppliers in this way requires a level of supply chain transparency that few brands have been able to achieve. How did you lay the groundwork for this fund?
We’ve been engaging with our supply chain partners for years now, in an effort to bring visibility and transparency to their own emissions reduction efforts and ambitions. We know that they are on that journey towards decarbonisation.
The baseline goes back to our core values within the company and what we call ‘dual excellence’. It’s about delivering economic performance at the same time as environmental and social responsibility. When you have that mindset, it allows you to open up these dialogues with your supply chain partners. For us, climate mitigation starts with sourcing, product design and operations. So we have worked closely with our supply chain partners over the years to co-innovate and co-design solutions, and to strengthen the resilience of our businesses together.
It doesn’t just sit in the corporate function that I lead; we actually work very closely with different functions across the business, be it research and innovation, operations, environment or sourcing. They follow very closely where the emissions are and where the opportunities could be. So this fund is a collaborative effort between operations, sustainability and finance.
Vogue: When different stakeholders are involved, have you ever found that the impact and the pursuit of ROI are in conflict?
A philanthropic fund is intended to deliver impact, and, of course, there is a return on investment in that it helps you and your partners learn. But I would say the biggest thing is how you operationalise sustainability and how you form partnerships to help deliver the ultimate aim, which for us is the future of beauty being more sustainable, more inclusive and more personalised. We live in a world of growing complexity. The more we know, the more we learn. So it’s really important to multi-solve. We constantly ask ourselves: how can we solve for environmental, social and economic stability at the same time?
Correction: The Solstice Fund is managed by Chenavari, not Avari Capital Partners, as a previous version of this article suggested. The Kenya project does not include a radio project and the insurance project is funded by the Climate Emergency Fund, not the Fund for Women (26/09/2025).
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