Lego Group plans to double its annual spending on emissions reduction and sustainability measures between 2023 and 2025, investing a total of $1.4 billion over the period.

The Danish company this week committed a small portion of that money to a $2.4 million carbon removal contract with Climeworks, which makes technology that filters carbon dioxide emissions out of the air. The family-owned holding company behind Lego, Kirkbi A/S, also disclosed a separate $405,000 contract. This is Lego’s first carbon removal contract.

Switzerland-based Climeworks operates the largest direct-air capture (DAC) facility in the world, Orca, in Iceland. The plant is capable of capturing and storing 4,000 metric tons of carbon dioxide annually. Boston Consulting Group, Microsoft, Swiss Re and UBS, among others, are customers. Climeworks is planning a big U.S. expansion; three of its DAC proposals were selected in 2023 for funding by the U.S. Department of Energy.

Lego and Climeworks declined to disclose how much carbon dioxide will be captured under the contracts. The move is being made alongside other measures. "In addition to our ongoing efforts to reduce our own emissions, we want to explore and support impactful climate solutions that have the potential to permanently remove and sequester hard to abate greenhouse gas emissions," said Michael Skou, head of strategy and sustainability for Kirkbi, in a statement.

The Lego playbook

Lego submitted its intention to develop a validated corporate net-zero under the Science Based Targets initiative in August. It has a deadline of two years to have a specific plan validated. Meanwhile, it made a near-term, science-based pledge to reducing absolute carbon emissions by 37 percent by 2032, across Scope 1 (for its own operations), Scope 2 (its energy purchases) and Scope 3 (goods and services purchased through supply chain partners).

Among the steps the toymaker is taking to reach that goal:

• Continuing to invest in onsite and offsite investments in renewable energy for its production sites (as of its latest environmental report, it has a peak generating capacity of 5 megawatts at its production sites).
• Adopting an internal "shadow" price that requires carbon emissions to be included in decisions about key investments.
• Tying some executive compensation to performance on emissions reductions, starting in 2023.
• Creating policies that reduce employee