How we invest money to achieve the greatest impact
We’re 100% transparent on how we invest money and what impact that creates. Here are our guiding principles.
When taking climate action, impact transparency is key. You need to understand if you are achieving the best you can from the input you give, whether that’s your time, money, or effort. To help you evaluate Klima’s impact performance, we're sharing the guiding principles that inform how we allocate user contributions to create impact in a holistic and efficient way.
Klima's number one KPI is CO2e. More concretely: how we can take the most CO2e out of the atmosphere as quickly as possible. Every decision we make follows from there, especially how we use funds.
No profits from offsets
Klima does not take any profits from offset subscriptions. Every cent that we receive will be invested into creating climate impact as detailed below. That means zero percent spent on investor returns and shareholder dividends, 100% spent on growing quantifiable climate impact.
No App Store fees
Many apps have to pay 30% in fees to Apple or Google for purchases made through the app. With Klima, this is not the case. Because Klima provides real life services rather than digital goods, we were able to build our own payment system free of App Store or Play store charges. That means, neither Apple nor Google receive any cut from your carbon offsets.
A holistic approach
Carbon offsetting is a powerful tool for individuals to mitigate the immediate effects of personal greenhouse gas emissions. But individual climate action alone can not solve the climate crisis as long as it lacks a collective framework. And carbon offsetting alone is not a sustainable strategy unless combined with long term emissions reduction.
That’s why Klima follows a holistic approach towards carbon offsetting, that combines individual, collective and sustainable impact.
1. Individual impact - Offsetting emissions
Carbon offsetting is the one thing any of us can do to take our personal footprint out of the climate equation immediately. That makes it an extremely powerful and important aspect of any climate action strategy. And that’s why the Klima journey starts here. It’s also where we allocate the majority of user contributions. In 2021, 70% of all funds went directly into individual carbon offsets. But if we stopped here, we would fail to address a systemic element of the climate crisis — which is that nobody can solve it alone.
2. Collective impact - Growing a movement
There are no individual solutions to the climate crisis. We either succeed collectively or we fail. That’s why, for each individual offset, Klima also invests a portion into community building: growing our collective impact by reaching more people through online campaigning and communication. Every dollar we spend here has roughly six times (!) more climate impact compared to offsets alone, due to the collective climate action it ignites. In 2021 Klima invested 20% into growing collective impact.
3. Sustainable impact - Reducing and improving
The science is clear: Rapid decarbonization is paramount to solving the climate crisis. Any holistic climate action strategy must therefore include concrete and quantifiable measures to reduce source emissions step by step. What’s more, we need to constantly improve the tools and tactics we have today to meet the increasing challenges of the future. That’s why in 2021, we’ve put 10% of all funds towards improving Klima further, with a focus on improving personal carbon reduction features.
Business model transparency
Transparency also means sharing that the user contributions we allocate towards community growth and improving Klima currently do not pay for our actual cost. That’s normal. We’re just starting out. It means that we’re relying on outside investment to make up for the difference, and as a matter of fact the Klima experience is heavily subsidized by those outside funds.
As you know, we’re not taking any profit from offset revenue. So how are we going to provide a return on investment to our backers? The answer is that we’re building additional revenue streams besides offsetting. Those will be services offered to companies, helping them to achieve their internal climate goals or advertise their climate solutions to our user base. The fees from those enterprise partners are how we refinance investments.
Carbon credit transparency
All climate projects supported through Klima are certified by the biggest international standards for carbon offsetting, either the Verified Carbon Standard or the Gold Standard. Each credit represents 1 ton of certified emission reduction and is issued with a unique ID that can only be 'retired' (aka claimed for offsetting) once. Klima keeps a public ledger to document every carbon credit it retires on behalf of its users and links to the respective carbon registries. The public carbon ledger is available here.
Every year we publish an annual Spending and Impact Report to document in detail how we invested the money we received from our users and exactly how much impact it created. You can download our first annual report here.
Any questions or suggestions?
If you have any feedback or ideas on how we can improve Klima further, we’d love to hear it! Just drop us an e-mail at firstname.lastname@example.org.