Fintech leader Klarna has partnered with climate tech start-up Vaayu and impact-tech start-up Doconomy to provide shoppers with granular carbon footprinting for more than 50 million fashion items.
- Klarna’s upgraded CO2e tracker will use Vaayu's technology to automatically calculate carbon emissions for fashion purchases on a product-level in real-time.
- The cradle-to-grave lifecycle assessment (LCA) approach will provide users with an enhanced breakdown of a product’s CO2e emissions along different stages of its lifecycle, allowing Klarna’s 150 million consumers to develop a deeper understanding and sensitivity for their shopping choices.
- These stages include everything from raw material extraction and processing to product assembly and delivery to the end user.
General Principles: The emissions tracker uses the most accurate data as possible to calculate the CO2e emissions estimates per purchase.
If the data is available, Klarna calculates the estimated CO2e emissions of each single product purchased with Klarna individually (product level estimations).
- The product level estimations are based on the product category e.g. “cardigan” or “hooded sweatshirt” and, if available, data points like material composition and weight of the product.
- If the CO2e emissions of all products of a given purchase can be calculated individually, the sum of the CO2e emissions of each individual product represents the total estimated CO₂e footprint of that purchase.
- If Klarna is not able to estimate the CO₂e emissions of each single product individually, estimates the CO₂e emissions on a purchase level combining the total price of a purchase and the merchant category of that particular purchase. A merchant category is a high-level summary of the products a merchant sells. e.g. “fashion and apparel” or “consumer electronics”.
The LCA in Question: The methodology used by Klarna covers a complete assessment of the following six stage of a product’s lifecycle, often also referred as the 'Cradle-to-Cradle' approach: raw material extraction, raw material processing, product assembly, deliveries, use phase of the product and end of life/recycling.
- Wherever an emissions breakdown along these lifecycle stages is shown, the emissions are attributed to each of the stages depending on the structural characteristics of an average product within the given product category.
The Calculations: To monitor the product-level CO2e emissions, Klarna has partnered with Vaayu. Vaayu offers the world’s first automated carbon software tailored to retailers — their proprietary technology enables retail businesses to track, cut and communicate their carbon emissions.
- Vaayu is providing Klarna with essential tools and data, enabling the latter to monitor and display product-level carbon emissions in real-time and at scale.
- For purchase level CO2e emissions estimates, Klarna has partnered with Doconomy, which uses the Åland Index for the calculation.
- The Åland Index was launched in 2016 by Ålandsbanken and has been further developed in cooperation with S&P Global Market Intelligence and Trucost.
- The index is managed and developed by Doconomy in Sweden.
What They Said:
The world is currently at an inflection point. Climate change is the biggest threat our planet faces and we need to address it with the urgent action it requires. But to make an impact, both retailers and consumers alike need to have access to accurate carbon data to make better decisions. Vaayu’s world-first technology provides robust carbon emissions insights for Klarna and empowers its customers with meaningful information on the carbon impact of their purchases.
— Namrata Sandhu
CEO & Co-founder
Vaayu
The data couldn’t be clearer – more and more shoppers demand transparency into the environmental impact of their purchases. But in order for consumers to make considered choices, they require unbiased and reliable information that they can understand. By feeding Vaayu’s rich and granular data into our CO2e tracker, we give shoppers even deeper and clearer insights into the CO2e footprint of their purchases, empowering them to vote with their wallets and enact real change.
— Salah Said
Head of Sustainability
Klarna
