Fintech
UBS backs $37 million donation to climate fintech startup Doconomy
From left to right: Johan Pihl, creative director and co-founder of Doconomy, and Mathias Wikstrom, CEO and co-founder.
Doeconomics
The credit rating agency S&P Global joined the group as a new investor, in which current shareholders Motive Ventures, PostFinance and Tenity also participated.
Founded in Sweden in 2018, Doconomy works with the likes of Boston Consulting Group, Mastercard, S&P Global and the United Nations Framework Convention on Climate Change to calculate the climate cost associated with financial transactions.
Among the company’s tools is AIand Index, a cloud-based service for banks that helps their customers convert each transaction into the corresponding CO2 footprint. The index is used by more than 100 financial institutions in more than 40 countries.
Doconomy plans to use the fresh cash to push expansion into North America and launch new products, CEO and co-founder Mathias Wikstrom told CNBC in an interview.
“Looking to the future, we want to enable every bank in every corner of the world to engage their customers in their ESG strategy [environmental, social, and governance] bank’s work,” Wikstrom said. “We see a connection between E and S, environmental and social. We cannot isolate these two different flows.”
Wikstrom said he was “very happy” to see partnerships emerging with the likes of UBS and Commerzbank, describing them as “a winning alliance of money and intellect to get this under control”.
News of Doconomy’s latest funding follows the company’s February 2023 agreement to acquire Dreams Technology, a platform that uses behavioral science to increase digital engagement and customer financial well-being.
Wikstrom said Doconomy’s valuation in its Series B round is unchanged from the price at which it raised money in its Series A, which saw the company raise cash from the likes of Quote Initiatives, MasterCardand Ikea’s parent company, Ingka.
Doconomy’s growth story has not come without challenges. More recently, the company has faced attacks from right-wing online commentator Jordan Peterson and his followers.
It’s not really hurricane season anymore, it’s the season of fear.
Mattia Wikstrom
CEO, Doconomy
Last week, Peterson took aim at the company in a post on social media platform X, labeling it the “soft, positive voice to save the planet from the worst corporate/fascist/green tyranny imaginable.”
The Canadian psychologist, who gained internet fame criticizing so-called political correctness, is a well-known skeptic who has described climate change as “the socialist get-out-of-jail-free idiot card.” He once defined the increase in greenhouse gas emissions as a positive factor in making the planet “green in the driest areas”.
Climate scientists say this is misleading, as it does not take into account the negative effects that intensifying droughts, wildfires and heatwaves caused by global warming have on plants and ecosystems.
Wikstrom told CNBC that the situation surrounding Peterson’s attacks on his company “shows that we need to educate a lot of people.”
“Fear will lead to frustration and frustration will potentially lead to protests, and protests will lead to violence and violence will lead to harm,” he told CNBC.
Wikstrom said he hopes that the more people like Peterson and other climate skeptics continue to “beat the drum,” the more likely their feelings will ultimately feel “hollow.”
“Looking at what’s happening in Hawaii, in Canada, in France, in Spain, in Greece – we have the floods, we have the fires, we have so many concerns right now,” he said. “It’s no longer hurricane season, it’s fear season.”
Climate fintech is a niche area of financial technology that has attracted growing interest from investors as global governments push companies to meet ESG goals and reduce carbon emissions associated with their operations.
Michael Baldinger, UBS’s head of sustainability, said the bank’s venture capital investment in Doconomy “underscores our focus on driving innovation to deliver the actionable data and insights our clients need to make choices inform them about their investments and make the change they want to see.”