How Klarna put an internal price on carbon

illuminem summarizes for you the essential news of the day. Read the full piece on GreenBiz or enjoy below:

🗞️ Driving the news: Klarna, a Stockholm-based global payments platform, has implemented an internal carbon pricing system, setting aside $2.35 million in 2023 for its climate action strategy
• This initiative aims to fund climate projects rather than offset Klarna's own emissions, with a focus on accelerating global decarbonization efforts

🔭 The context: Since 2021, Klarna has applied an internal carbon fee of $100 per ton for Scope 1 and 2 emissions, including employee travel, and $10 for Scope 3 emissions
• The accumulated funds, over $5 million to date, support climate projects through Milkywire’s Climate Transformation Fund
• This approach differs from the more common practice of shadow pricing, emphasizing direct financial contributions to climate action

🌍 Why it matters for the planet: Klarna's innovative funding mechanism underlines the company's commitment to driving global decarbonization rather than solely focusing on becoming climate net zero
• By investing in quality carbon projects and supporting climate disruptors, Klarna fosters a broader impact on environmental sustainability

⏭️ What's next: The company's strategy includes not just financial contributions but also a cultural shift within Klarna, promoting transparency, responsibility, and active engagement in climate efforts
• Klarna's model serves as a blueprint for other companies, particularly in low carbon intensity industries, to adopt similar measures for climate action.

💬 One quote: "It’s not about making our own business climate net zero. It’s really about how do we get the world to net zero," (Salah Said, head of sustainability and ESG at Klarna)

📈 One stat: Klarna set aside $2.35 million in 2023 for its climate action strategy

Click for more news covering the latest on environmental sustainability