Stockholm, July 6th, 2022 - Klarna, a leading global retail bank, payments, and shopping service today announced it will invest USD 1.7 million from its internal tax on carbon1 in a number of climate initiatives, including in four carbon removal projects focused on permanently removing CO2 emissions from the atmosphere.
The commitment is part of Klarna’s unique sustainability approach designed to create maximum long-term climate impact. Instead of purchasing cheap carbon credits to make climate neutrality claims, Klarna focuses on investing funds from its internal carbon tax in a number of initiatives that tackle the most pressing challenges around climate change, including permanent carbon removal, which can have a greater climate impact.
This year Klarna is using part of the funds from its carbon tax (USD 1 million) to sponsor four projects2 that will potentially remove by 2030 11,587 metric tonnes of CO2 equivalents, or the electricity consumption of over 2,000 households in a year, to aim to accelerate growth in the carbon removal market and create as much impact per dollar as possible, including:
- Heirloom: a company in the US that is developing a promising and novel technology to capture CO₂ directly from the air using common minerals and storing it permanently underground
- Husk: A carbon based fertilizer company in Cambodia that creates biochar from the rice husks, which is then used as fertilizer by farmers, restoring soil health and increasing yields.
- InterEarth: a company in Australia that harvests plants’ above ground biomass and stores that biomass, and its contained carbon, underground.
- Silicate: a company in Ireland harnessing the power of mineral weathering to permanently remove carbon dioxide from the atmosphere.
Salah Said, Head of Sustainability at Klarna said: “We’re proud to join forces with four pioneers in the carbon removal space to help permanently remove CO2 emissions from the atmosphere and mitigate the worst consequences of the climate crisis. Our objective is to create as much impact per dollar as possible and to be part of the solution to the climate crisis.”
Klarna, along with its strategic partner Milkywire, selected the four initiatives from a poll of different projects, as they resulted to be the most innovative, effective in permanently removing carbon emissions, impactful, scalable and with great co-benefits for people and nature.
Klarna is investing the remaining USD 700,000 in the Climate Transformation Fund (CTF), the fund run by Milkywire, which finds and supports a wide range of projects addressing the climate crisis, including permanent carbon removal, reforestation, forest protection decarbonization and policy change initiatives. Last year, the CTF, which is funded via Klarna’s internal tax on carbon, was allocated to 11 sustainability projects including, Justdiggit in Tanzania to restore dry land, WithOneSeed in Timor Leste to grow and maintain new trees, MASH Energy an Indo-Danish green tech that takes waste and turns it into biochar and Human Rights Watch’s coal project to accelerate the transition away from coal.
The CTF focuses on selecting effective and transformative projects across all sustainability areas, addressing the urgent needs for further investments in the climate action space. Klarna aims to continue making meaningful contributions to carbon removal initiatives and to add capacity to the CTF, hoping to inspire other companies to follow.
While sponsoring impactful projects, Klarna also made progress in reducing its own emissions. In 2021 the company cut its own carbon emission intensity, which is Klarna’s total CO2 footprint by revenue generated in a business year, by 10 %. By 2030 the company aims to halve its emissions in line with the Paris agreement and by 2040 to operate at net-zero.
Klarna also encourages consumers to participate in the action, offering them the opportunity to donate to the same projects and more through a donation integration in its in app CO2 tracker, which allows its 150 million consumers across all markets to track the estimated carbon emissions of their purchases.
Note to editors:
1) Klarna follows the guidelines from the GHG Protocol Corporate Accounting and Reporting Standard, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The internal carbon tax is set at $100/tonne for all scope 1, 2 and travel emissions (remaining scope 3 emissions set at $10/tonne). In 2022, Klarna’s internal tax on carbon amounted to USD 1.67 million. For more information see Climate Report 2021.
2) In 2022, Klarna contributed USD 1.67 million to projects selected for the Climate Transformation Fund, including 715,000 to the WRLD foundation earmarked for projects within reforestation, nature protection and decarbonization, and USD 955,000 to four carbon removal initiatives, specifically USD 100,000 to Heirloom, USD 250,000 to Husk, USD 355,000 to Inter Earth and USD 250,000 to Silicate.
Founded in Sweden 2018, Milkywire is a new tech platform for impact. By developing digital tools and modern infrastructure for the charity sector Milkywire connects donors globally to carefully audited civil society organizations working to solve the most pressing planetary problems facing humanity. Through the Milkywire app, website, API tools, employee giving program and more users can discover, connect, and donate to projects around the world fighting the climate crisis, biodiversity crisis, and pollution crisis. Milkywire provides a unique and engaging experience by allowing users to support local grassroots projects directly, connect with the experts working in the field, and see proof of the impact by following their progress through weekly video updates on the Milkywire app.