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ESG at Klarna

Download 2023 ESG Report  

Klarna's ESG Strategy

 

As Klarna grows, so does our responsibility to our stakeholders, society, and the planet. We recognize the impact we have on global ESG issues, such as consumers’ financial wellness and stability, climate change, and human rights, and we understand how these issues affect our business. Klarna is committed to setting a new standard in environmental, social, and governance (ESG) performance by empowering consumers to take control of their finances, promoting ethical business practices, and supporting global climate solutions that catalyze climate action. We are committed to fair, transparent financial services, promoting responsible spending, financial literacy, and preventing financial crimes. We also foster an inclusive, empowering environment for our employees.

 

Corporate governance is the backbone of our ESG efforts. Klarna maintains strong sustainability governance practices to gain and preserve the trust of all our stakeholders. We believe that responsible, efficient, and sustainable business practices contribute to good corporate governance  and ensure long-term value creation for all involved.

 

ESG Focus Areas

Our key ESG focus areas reflect Klarna’s commitment to addressing the most material sustainability challenges identified through our materiality assessment:


Climate action: We are committed to making a meaningful contribution to global climate goals: we are reducing our greenhouse gas emissions towards our 2040 Net Zero goal and we support the innovative climate solutions needed to reach global Net Zero with annual climate contributions, financed through our internal carbon fee. 


Social responsibility: Klarna prioritizes working conditions for both our employees and workers within our value chain, ensuring fair labor practices, safety, and inclusivity. We are committed to equal treatment and opportunities by promoting diversity, equity, and inclusion. Additionally, we proactively support financial wellness and stability for our consumers by offering tools that promote responsible spending and financial literacy.


Governance: Strong corporate governance is fundamental to our business. We are committed to transparency and ethical governance, ensuring compliance with all regulatory frameworks, including anti-money laundering, countering terrorist financing, and sanctions regulations. Klarna also upholds corporate culture that reflects integrity and responsible business conduct.

ESG Governance

At Klarna, corporate governance is structured to integrate sustainability and ESG risks and opportunities into decision-making processes across the organization. The governance framework involves the Board of Directors, the Group Management Team, the Audit, Compliance & Risk Committee (ACRC), and the Remuneration Committee (RemCo), all of which play critical roles in ensuring Klarna's sustainability objectives are aligned with business goals.

ESG Governance

ESG Materiality Assessment

Klarna’s materiality assessment is prepared in accordance with the guidelines set by the Corporate Sustainability Reporting Directive (CSRD) and follows a double materiality approach. We consider how sustainability issues affect Klarna’s performance and how Klarna’s activities impact people, the planet, and long-term value creation.

Our materiality map reflects our analysis of significant ESG factors, categorized under:

  • Financial materiality: Evaluating risks and opportunities that influence Klarna’s financial performance, such as regulatory changes and market shifts related to climate action.
  • Impact materiality: Assessing Klarna’s environmental and social impacts, including emissions, biodiversity, and human rights within our operations and supply chain.

Klarna Materiality Matrix

Klarna Material Topics

Key ESG Initiatives

Financial wellness

Klarna actively supports financial wellness by offering tools that promote responsible spending and financial literacy.

  • Budgeting tool: Klarna’s app includes a budgeting feature that allows consumers to set monthly spending limits and track their expenses in real-time, helping them stay on top of their finances.

  • Spending insights: Klarna provides personalized spending insights to help consumers understand their financial habits, empowering them to make smarter financial decisions.

Conscious shopping

Klarna encourages conscious shopping by providing consumers with information that helps them make smarter purchasing decisions.

  • Conscious brands: Klarna highlights brands with strong sustainability credentials, making it easier for consumers to shop with companies that align with their values.

  • CO₂e tracker: This tool in the Klarna app shows the estimated carbon emissions of purchases, helping consumers get a better sense of the environmental impact of their shopping habits.

Circularity

Klarna promotes the circular economy by offering services that help extend the life of products and reduce waste.

  • Resell: Klarna’s resell feature allows consumers to easily list and sell items they no longer need, encouraging second hand purchases and reducing waste.

  • Second hand vs. new: Klarna provides comparisons between buying new and second hand products, helping consumers save money and make more environmentally conscious choices.

Climate action

Klarna is committed to reducing its climate impact and contributing to global climate solutions.

  • Internal carbon fee: Klarna levies an internal carbon fee on its annual GHG emissions and uses the resulting funds to support innovative climate action projects through the Climate Transformation Fund.

  • Emission reductions: Klarna has ambitious GHG emission reduction targets in line with the Science Based Targets Initiative to set clear milestones on its journey to reach Net Zero emissions across its value chain by 2040. 

Reporting

As part of our commitment to transparency, Klarna aligns its non-financial disclosures with global best-practice frameworks. Our ESG (Environmental, Social, and Governance) Report details sustainability programs, policies, and metrics, following leading standards such as the European Union (EU) Taxonomy, Corporate Sustainability Reporting Directive (CSRD), Non-Financial Reporting Directive (NFRD), and Task Force on Climate-related Financial Disclosures (TCFD). 
In compliance with the Annual Accounts Act for Credit Institutions and Securities Companies and EU Directive 2014/95, Klarna reports on its environmental, social, and governance strategies and performance in the 2023 Annual Report.

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