UBS is backing a $37 million funding round for climate fintech startup Doconomy

Swedish climate-focused financial technology startup Doconomy told CNBC on Thursday that it has raised 34 million euros ($36.9 million) from leading European banks, including UBS and CommerzVentures.

Doconomy, which provides tools to help bank clients measure the carbon footprint of their daily spend, raised the money in a Series B funding round co-led by UBS Next and CommerzVentures, the venture capital arms of UBS and Commerzbankrespectively.

Financial data and analytics company S&P Global came on board as a new investor, while existing shareholders Motive Ventures, PostFinance and Tenity also participated.

Founded in 2018 in Sweden, Doconomy works with Boston Consulting Group, Mastercard, S&P Global and the United Nations Framework Convention on Climate Change to calculate the climate costs associated with financial transactions.

One of the company’s tools is the AIand Index, a cloud-based service for banks that helps their customers translate every transaction into its associated carbon footprint. The index is used by more than 100 financial institutions in more than 40 countries.

Doconomy plans to use the new money to fuel expansion into North America and roll out new products, CEO and co-founder Mathias Wikstrom told CNBC in an interview.

“In the future, we want to enable every bank in all corners of the world to involve their customers in ESG [environmental, social, and governance] work from the bank,” Wikstrom said. ‘We see a connection between the E and the S, the ecological and the social. We cannot isolate those two different flows.”

Wikstrom said he was “very happy” to see partnerships emerging with the likes of UBS and Commerzbank, describing it as an “alliance of both money and intellect to get this issue under control.”

News of Doconomy’s latest funding follows the company’s deal in February 2023 to acquire Dreams Technology, a platform that uses behavioral science to increase customers’ digital engagement and 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, where the company raised money from the likes of Citi companies, MasterCardand Ikea parent company Ingka.

Doconomy’s growth story has not been without challenges. More recently, the company has faced attacks from right-wing online commentator Jordan Peterson and his followers.

Last week, Peterson took aim at the company in a post on social media platform X, calling it the “soft positive planet-saving voice of the worst corporate/fascist/green tyranny imaginable.”

The Canadian psychologist, who rose to internet fame by criticizing so-called political correctness, is a noted skeptic who described climate change as “the crazy socialist get-out-of-jail-free card.” He once called rising greenhouse gas emissions a positive effect on “greening the planet in the driest areas.”

Climate scientists say this is misleading because it does not take into account the negative effects that intensified droughts, forest fires and heat waves caused by global warming are having on plants and ecosystems.

Wikstrom told CNBC that the situation surrounding Peterson’s attacks on his company “illustrates that we have to train 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 eventually ring “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 not really a hurricane season anymore, it’s a fear season.”

Climate fintech is a niche area of ​​financial technology that has seen increasing interest from investors as world governments push companies to meet ESG targets and reduce carbon emissions associated with their operations.

Michael Baldinger, Chief Sustainability Officer of UBS, said the bank’s venture investment in Doconomy “underlines our focus on driving innovation to provide the data and actionable insights our clients need to make informed choices about their investments and the bring about the change they want to see.” a

Clarification: The headline of this story has been updated to clarify that CommerzVentures, the venture investment arm of Commerzbank, co-led Doconomy’s €34 million fundraising.