Kering (EPA:KER) and L’Occitane (HKG:0973) have launched a €300 million Climate Fund for Nature for high-quality projects dedicated to nature protection and restoration.
- Kering and L’Occitane have launched a €300 million Climate Fund for Nature at COP15, intended to mobilise capital from the luxury fashion and beauty sectors.
- Projects eligible for funding will mostly be in countries where the investors source their core raw materials, with a particular focus on women’s empowerment.
- Investment in nature-based solutions needs to grow exponentially if we are to meet global climate change, biodiversity, and land degradation targets.
Who is behind the new fund?
Luxury group Kering, owner of major brands such as Gucci and Saint Laurent, and cosmetics producer L’Occitane have teamed up to establish a €300 million Climate Fund for Nature, unveiled at COP15. It will mobilise resources from the luxury fashion and beauty sectors to protect and restore nature, with a particular focus on women’s empowerment.
The pair has already committed €140 million and the fund will be open to new partner companies to support the scaling up of positive impacts. It will be managed by Mirova, the affiliate of Natixis Investment Managers dedicated to sustainable investing, relying on its expertise in natural capital fund management. Operations will start in the first quarter of 2023.
Marie-Claire Daveu, chief sustainability and institutional affairs officer at Kering, commented: “The Climate Fund for Nature provides an opportunity for the Luxury Fashion and Beauty sectors to collectively support biodiversity restoration and conservation at scale. Kering is proud to collaborate with Mirova and we welcome the fund’s first partner L’OCCITANE Group.”
She added: “Innovative financing mechanisms are crucial to channel much-needed investment into nature-based solutions if we are to reverse biodiversity decline by 2030 and, simultaneously, address climate change, which is intrinsically interlinked with nature. We entreat further companies to join this ambitious initiative to contribute to a nature-positive future.”
What projects will it target?
The fund will be dedicated to high-quality projects dedicated to nature protection and restoration, supporting farmers in their transition to regenerative practices, delivering carbon credits, and generating co-benefits for the communities with a specific emphasis on women’s empowerment.
Eligible projects will mostly take place in countries where the investors source their core raw materials. Their progress will be monitored to ensure they deliver measurable outcomes for nature, climate and livelihoods.
The projects supported will also be required to significantly contribute to women’s empowerment, by addressing existing gaps related to access to finance, land and training. To that end, the fund and Mirova will collaborate with 2X Collaborative, an industry body for gender lens investing.
Need for investment in nature-based solutions
The ongoing COP15 summit, focused on biodiversity, has drawn attention to the importance of protecting nature to ensure a sustainable future for the planet. While most of the effort has so far been on limiting global warming, it is paramount that this action is carried out alongside biodiversity initiatives.
Nature, however, remains severely under-financed, the United Nations Environment Programme (UNEP) said in a December 2022 report. If we are to meet climate, biodiversity, and land degradation goals, investment in nature-based solutions must be doubled to $384 billion a year by 2025.
The figure will have to increase four-fold by 2050 to reach a total investment of $10 trillion. Indeed, this same figure was estimated by McKinsey to be the yearly value of nature markets, which is equivalent to 11% of global GDP.
Alongside the obvious environmental benefits, nature-based solutions generate economic value and improve the livelihoods of underserved communities, especially in rural areas. According to another report released at COP15, the level of investment forecast by UNEP has the potential to create an extra 20 million jobs.
As such, it is crucial to raise as much funding as possible. The initiative by Kering and L’Occitane is an example of how companies can lead by example in their sector, all while involving their own competitors. This will be beneficial for companies involved as they will receive a return on investment while improving their sustainability profiles and potentially have the opportunity to offset some of their emissions.
