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Klarna has announced a significant increase in its Climate Transformation Fund, in collaboration with Milkywire, by injecting an additional $2 million. This announcement marks a strategic step in Klarna's continued commitment to combat climate change.
Initiated in 2021, the Climate Transformation Fund serves as a central platform for companies to invest in meaningful climate solutions. Klarna's total investments in climate projects now stand at an impressive $7 million since its inception. By the end of 2024, the company plans to support over 45 organizations dedicated to addressing the climate crisis.
By renewing its financing models, Klarna is adopting a unique approach by calculating the annual contribution amount through a "carbon tax" applied to its greenhouse gas emissions. Instead of opting for carbon offsetting, Klarna directs these funds towards impact-focused climate solutions, reinforcing its commitment to mitigating the harmful effects of climate change. Klarna has doubled the rate of its internal carbon tax to $200 per ton of CO2e for Scope 1 & 2 emissions, effective from 2024.
Alexander Farsan, Head of Climate and Environment at Klarna, expressed enthusiasm for the company's forward-thinking initiatives, stating:
"We continue to innovate in our funding models and have doubled the topline rate of our internal carbon tax. Since 2021, Klarna has committed $7 million in impact-focussed projects that otherwise may have fallen through the cracks of the voluntary carbon market. We’re super excited to support 13 new carbon removal innovators from across the globe with funding in the year ahead"
At the Innovation Zero Conference in London, Klarna unveiled its partnership with 13 promising startups dedicated to removing CO2 from the atmosphere. Among them are:
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Aquarry, an American startup transforming flooded mine sites for carbon capture
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Ucaneo, a German company utilizing solvents and biocatalytic properties for air carbon capture
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BIOSORRA, a Kenyan organization focused on sustainable agriculture and CO2 sequestration in soil through biochar production
Klarna's climate strategy aligns with the "Beyond Value Chain Mitigation" guidance from the Science Based Targets initiative, thus setting a standard for companies worldwide. The funding for climate solutions complements Klarna's significant achievement of reducing its absolute emissions by 25% in 2023. As Klarna continues to lead by example, its proactive approach to climate action sets a benchmark for corporate sustainability efforts and drives meaningful change in the fight against climate change.
In summary: -
The announcement brings Klarna's total investments in climate projects to $7 million since 2021.
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13 new impact-focused carbon removal innovators have been selected for funding.
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The announcement coincides with Klarna reducing its own absolute emissions by 25% in 2023.
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Additionally, the internal carbon tax is doubled to $200 per ton of CO2e for Scope 1 & 2 emissions.
Source: Klarna Press Release