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Klarna’s Latest Move Helps Consumers Shop Responsibly

Klarna just rolled out another sustainable tool for its shoppers.

The global payments provider and shopping service has launched conscious badges in the Klarna app in collaboration with Clarity AI, a global sustainability tech platform. With this feature, Klarna users can access comprehensive metrics about their electronic purchases, including information on brands’ greenhouse gas emissions, energy derived from renewable resources and more.

“We’re thrilled to deepen our partnership with Klarna to develop conscious badges, the first-ever assessment of electronic brands’ achievements providing transparency at scale for consumers around the world. We believe there should be nothing ‘black-box’ about metrics, and we’re excited Klarna can leverage our AI capabilities to provide detailed information for Klarna shoppers who want to know more,” Angel Agudo, board director and head of product at Clarity AI, said. “There are multiple dimensions to ensuring a company is on the right path to net zero. Yes, reduction in emissions is of course key, but so is a commitment and a plan to reduce emissions to truly have an impact of appropriate size and so we wanted to provide consumers of all those dimensions with the conscious badge experience.”

Shoppers increasingly demand greater transparency about the environmental impact of their purchases, with over half (56 percent) of global consumers wanting more information about the environmental impact of their brands and products throughout their shopping experience, according to Klarna’s Shopping Pulse. The quarterly report also found that more than a third (37 percent) consider it important for brands to act with consideration for the environment. In response to this demand, Klarna launched “Conscious Collections” in the app in 2022 to inform shoppers about brands’ sustainability performance in fashion and footwear. Brands featured in the collections include AsketPangaiaMara Hoffman and Nudie Jeans.

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Electronic brands can earn up to five badges. The first, lower direct greenhouse gas emissions, is reached if the company is among the 10 percent of Clarity AI-tested comparable companies with the lowest direct and energy-related greenhouse gas emissions. Similarly, the lower indirect greenhouse gas emissions badge is achievable if the company is among the 10 percent of Clarity AI-tested comparable companies with the lowest indirect greenhouse gas emissions. If the company has committed to reducing greenhouse gas emissions in line with the goal of limiting global warming to 1.5 C, they earn another badge. The same goes for if a company discloses direct, energy-related and indirect greenhouse gas, and another badge is earned if over 90 percent of the energy used by the company comes from renewable sources.

“The rollout of conscious badges in the Klarna App marks a significant milestone in our continued effort to empower shoppers to vote with their wallets,” said Salah Said, head of sustainability at Klarna. “Following the successful launch of ‘Conscious Collections’ in the Klarna app last year to bring greater awareness to environmentally and ethically friendly brands within the apparel and footwear verticals, we are thrilled to team up with Clarity AI to deliver the world’s first unbiased, AI-driven environmental assessment for electronic brands.”

Conscious badges are currently accessible to consumers after they make an electronics purchase via the transactions details page of the Klarna app. In the coming weeks, the badges will also be visible to consumers through Klarna’s CO2e tracker, regardless of whether they’ve made an electronic purchase.

“While the badges are currently available to consumers in the app after making a purchase, by equipping consumers with insights around the sustainability practices of the brands they’ve purchased from, our hope is that they will then be inspired to take a more mindful approach while shopping in the future,” a Klarna spokesperson said to Sourcing Journal. “For example, if a brand that a consumer has shopped with has not received any badges, they will be redirected to explore brands that have environmental badges, supporting more conscious shopping behavior.”

This new feature follows several recent initiatives by Klarna to promote its environmental achievements and provide consumers with the tools and insights they want to shop more consciously. In January, Klarna launched a resell feature, enabling shoppers in Sweden to resell their previous purchases directly through the app. It also introduced “Shop Circular” collections, spotlighting brands with circular services to reduce waste and maximize the use of products, and upgraded its CO2e tracker in the app. This tracker now provides users with emissions data at a product level for nearly 60 million items in every step of the product’s lifecycle. Over 324,000 consumers, on average, actively track their carbon footprint through Klarna each month, according to data accessed last December.

“This is the first time an assessment of Electronics brands’ environmental achievements has been made available to consumers, ever, and this is also our very first iteration of the product,” the spokesperson said. “Looking forward, our aim is to have the feature and data provided embedded more in relevant touch points throughout the entire user journey, ultimately with the goal to drive conversion of more sustainable brands.”

Klarna has also made other sustainable commitments. By 2025, the buy now, pay later giant will ensure that all its locations use 100 percent green electricity. By 2030, it will reduce 50 percent of its carbon-intensity-based emissions in line with the Paris Agreement. And by 2040, Klarna claims it will operate net-zero.

Klarna and Clarity AI initially partnered last December so the former can provide environmentally conscious brands to its more than 150 million shoppers.  

Clarity AI is a sustainability technology platform that uses machine learning and big data to deliver environmental and social insights to investors, organizations and consumers. As of November 2022, Clarity AI’s platform analyzes over 50,000 companies, 320,000 funds, 198 countries and 188 local governments, delivering data and analytics for investing, consumer research and corporate reporting for sustainability regulations worldwide.