You’re probably familiar with Stripe.com if you own an online business. It is used by thousands eCommerce merchants to process payments, and it is one of the most widely used eCommerce tools for merchants.
Stripe Climate was launched in October 2020. This allows businesses to use a portion of their earnings to grow carbon removal technology. It is as easy as a few clicks. These technologies are still in development, but you could be one of the growing number of businesses who want to make a difference in carbon removal.
Stripe Climate is less then a year old when we wrote this article. We’re providing all the information currently available to help people get to know Stripe’s climate initiative.
It’s hard to run an online business. But, allowing customers to live and retain their ethical standards is a different challenge.
Imagine that you are committed to ethical business practices, such as selling products that reflect your values and helping to reduce climate change. You can make it easier for customers to do the exact same.
This is about a payment system that allows carbon removal customers to purchase carbon.
Are you ready? Great. Let’s get started!
What is Stripe Climate?
Stripe Climate was launched by Patrick and John Collison, co-founders of payment platform Stripe. Stripe Climate was initially only available to US users, but it has been made globally accessible since February 2021.
Nan Ransohoff (Stripe’s Head for Climate) said at the launch: Many of our users told us that they want to tackle climate change, but it can be difficult and time-consuming. Stripe Climate makes it simple for any business to fund frontier carbon removal, making it easier to address climate change.
Stripe Climate allows businesses to take action against climate change. They direct a portion of their revenues towards projects that permanently remove carbon dioxide (CO2) from our atmosphere.
In our review, we will discuss how it is done.
Stripe Climate’s current statement is this: “We direct 100 percent of your contribution towards carbon removal.” Our scientists advisors maximize the long-term effect. Stripe purchases carbon removal from exactly the same projects.
Stripe Climate was tested in an early beta stage by 25 companies, including major players like Flexport, OpenSnow and Substack.
So far so good – let’s have a look at the way this works:
What it costs and how it works
Stripe Climate is completely free to sign up. The platform does not charge any fees for regular transactions. However, it doesn’t take any money for climate contributions. In that sense, Stripe’s commitment to climate change is free.
How does it work? Here’s how:
Stripe account holders all have a dashboard that allows you to view the Stripe Climate settings. You can sign up to Stripe Climate, pause or change your contribution level.
Stripe Climate offers a revenue percentage contribution when you sign up for Stripe Climate. The amount processed through Stripe determines the percentage. You can either set a fixed monthly contribution, or you can customize your percentage if you feel it is too low or high.
Let’s say you choose to give 1%, and that you sell something worth $200. You’ll pay $2 in transaction fees. Stripe typically debits your Stripe Climate contribution from the balance within 1-3 days.
You can find more details about Stripe Climate on their website. They also provide detailed information on calculations and VAT. Several of these issues are also addressed in the FAQs section, which is located at the end. We recommend that you consult their website for further information.
Where does the money go?
This may seem like another attempt at greenwashing by some cynics. This is basically giving the impression to customers that you have green credentials, when in fact you don’t.
This is a pretty transparent score from Stripe. Stripe Climate currently supports six carbon removal projects:
- Sea Change
- Running Tide
- Missing Zero Technologies
- Carbon Built
- Future Forest
We won’t go into the details of each company, but Stripe supported four projects when it launched last year. In May 2020, it also purchased $1m worth carbon removal. An expert group of scientists and academics selected these projects. The original list now includes six projects.
Stripe Climate doesn’t offer traditional carbon offsets when you sign up for Stripe Climate. They instead allocate funds to the projects they have chosen. They pay a fixed price per ton for permanent CO2 removal. Stripe Climate subscribers are not able to decide where their contributions will go at the time of writing.
What’s in it for your business?
Signing up for Stripe Climate has a few clear benefits. You will feel great about taking climate change seriously and investing your money. There are also business benefits.
Being an early adopter for Stripe Climate can show customers that you are ambitious and willing to take risks.
This is particularly important if your customers are concerned about climate change, and want to see your environmental credentials.
Stripe Climate users can tell customers about their commitment with Stripe. A badge is given to you that can be used across all Stripe-hosted actions.
Stripe also offers an “asset package,” which lets you use your Stripe climate badge anywhere you like, even on your ecommerce website. You can find all details about how to use the badge in the Climate settings section of your Stripe Dashboard.
Even better, you could go further and ensure that your eCommerce website contains information about the climate change work you are doing. Stripe gives Stripe Climate contributors permission for Stripe Climate terminology to be used in any related blog posts about carbon removal. Handy, right?
For those still skeptical, here’s a list of statistics to give you some food for thought:
- 88% Of US and UK customers want brands to make them more eco-friendly
- 89% consumers care about the environment
- 83% will choose brands that are committed to sustainability
However, it is important to remember that your commitment to Stripe Climate will not make your company carbon neutral. Carbon removal is still an emerging concept. Stripe suggests that you tell your customers how much of your purchase will go towards carbon reduction technologies if you want to promote Stripe Climate.
The web page of Blackthorn, a company that states it “will contribute 1 % of your purchase to eliminate CO2 from our atmosphere.”
You should now be able to understand what Stripe climate is and is not. You can always ask more questions in our FAQ.
Frequently Asked Question
Although we cannot answer all your questions here, Stripe has a comprehensive, transparent, and helpful FAQ. If you’re interested in digging deeper, the company has compiled a list of some of its most frequently asked questions.
But, we also have a few questions:
Can my customers pitch in too?
As of the writing, this is the correct answer. Stripe could however offer this option to customers at checkout. This idea is currently in the pending tray.
Stripe Climate is Available to All Stripe Customers
Both yes and no. Anyone can join Stripe. You can also join if your Standard Stripe Connect account is used by marketplace platforms like Booking.com, Shopify and WooCommerce. Businesses located in India, Indonesia, India, Pakistan, and the United Arab Emirates are not permitted to access Stripe Climate.
If I sign up, which companies will I be joining?
This page is lacking information. The Stripe Climate page lists Substack and Flexport as contributors. Flipcause and Panic Inc. are also listed. Stripe had earlier in the year promised that six of its selected companies would receive $2.75 million. So, it makes sense that there should be more contributors.
The only information we could find at the time of writing was that Stripe Climate has received contributions from more than 2,000 Stripe users in 37 countries since its launch in 2020. This is still quite impressive considering it has only been 7 months.
You should now be able to take your interest in Stripe Climate or removing CO2 out of the atmosphere at least a little further.
We believe this is a novel and exciting way for businesses to make a contribution to halting climate change.
It is free and you have the ability to adjust, pause and cancel your contribution if you wish. This won’t make your carbon neutral. It will still help you to assure your customers that you are making visible contributions to climate change. This may lead to better bottom lines.
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