Finance & Investment
L’Oréal Launches €15M Climate Emergency Fund

Today, L’Oréal launches a €15 million endowment fund to support vulnerable communities to develop greater resilience in the face of climate disasters. The L’Oréal Climate Emergency Fund will support communities in the most exposed areas by enabling expert partner organizations to help them prepare for and recover from climate disasters.

The Climate Emergency Fund couldn’t arrive at a better time: The World Meteorological Organization estimates that climate-driven disasters have increased five-fold over the past 50 years — the most recent evidence being the wildfires that devastated Maui last month, the at least eight catastrophic floods that have ravaged cities across four continents just in the first 11 days of September, and Hurricane Lee — the 14th Atlantic hurricane of the year — gearing up to rock New England and eastern Canada sometime today.

Today, up to three billion people live in disaster-exposed areas, with the number predicted to increase to four billion by 2050. The L’Oréal Climate Emergency Fund will reach vulnerable communities through partnerships with both local disaster-relief organizations and international NGOs. The new fund builds on L’Oréal Groupe’s longstanding commitment to address growing humanitarian and environmental challenges, bringing the Groupe’s total investments to more than €200 million across several funds — including the L’Oréal Fund for Nature Regeneration, the Circular Innovation Fund and the L’Oréal Fund for Women.

“As an industry leader, L’Oréal has a responsibility to address the world’s most urgent environmental and social needs,” said Alexandra Palt, Chief Corporate Responsibility Officer of L’Oréal Groupe and CEO of the Fondation L’Oréal. “The urgent climate crisis we are facing necessitates action on all fronts and calls for global collaboration at every level. With the new Climate Emergency Fund, we are expanding on our commitments to help build resilience for vulnerable communities, together with organizations deploying innovative solutions on the ground.”

The funds will be directed toward two types of actions:

• Prepare — to help minimize the impact of climate disasters before they occur, through disaster planning and early warning systems; and
• Repair — to restore essential infrastructures and vital services such as healthcare, housing and access to food and water when disaster strikes.

The first two L’Oréal Climate Emergency Fund recipients are The Solutions Project — a US-based nonprofit organization that funds and amplifies climate-justice solutions created by frontline communities building power for an equitable and regenerative economy; and Start Network — a global alliance of more than 80 local, national and international NGOs that work with people on the frontline to provide early and effective responses before and when humanitarian crises strike.

“Whilst the climate crisis is global in nature, it is clear that some communities are at far greater risk of near-term climate disasters and must mitigate for these climate-related events to prevent them from becoming human disasters,” said Christina Bennett, CEO of Start Network. “In partnership with L’Oréal and local organizations rooted in their communities, we will support people at risk of crisis to prepare and protect themselves — with the assistance delivered by local teams familiar with their circumstances and best placed to ensure affected populations rebound more quickly.”

How the Climate Emergency Fund could be put to work

As an example of this in practice, Start Network has created new disaster-risk funding instruments — such as its Start Ready fund — that help ensure timely, reliable humanitarian funding in the event of a climate-fueled natural disaster. Start Ready pre-positions funding for crises that happen with regular and predictable patterns of recurrence — such as floods, droughts and heatwaves; funds are disbursed based on the prediction of a climate shock, to a pre-agreed level of severity, using live data and scientific modeling. The organization says that roughly 55 percent of humanitarian funding goes to these kinds of crises; but only 1 percent of this funding is organized in advance – despite this being a much more effective method of crisis response. The Start Ready Risk Pool — now in its second iteration — has amassed £7.3m to protect communities against droughts, floods, cyclones and heatwaves in Bangladesh, Democratic Republic of the Congo, Madagascar, Pakistan, Philippines, Senegal and Somalia.

Here in the US, The Solutions Project also mobilizes rapid-response grants for the often-underfunded frontline organizations providing on-the-ground disaster response and mutual aid during crises. According to the organization’s 2021 Impact Report, that year The Solutions Project scaled its on-the-ground impact by increasing grants by more than five-fold — from $2 million to nearly $11.5 million — and tripling the number of grantees it supports to 193 organizations across 26 states and territories, with 82 percent being People of Color-led organizations.