Last week, Shopify released its latest sustainability statement, committing to spend USD 5 million annually to fight climate change. CEO Tobi Lütke reflected on previous sustainability commitments and decided they could do more, heralding the birth of the Shopify Sustainability Fund.
We need to not only make commerce better, but take better care of our planet.
Tobi Lütke, CEO, Shopify
For most eCom businesses, the platform choice is not high on the priority list when it comes to sustainability improvements. It is, however, vital that business decisions are now made with sustainability as a critical factor, so why should choosing an eCom platform be any different.
Shopify has decided to commit both funds and technical expertise to help fight climate change
The Problem with Offsets
As part of their self-reflection, Shopify has been honest regarding their historical use of Carbon Offsets and have refocused on doing more.
The biggest buyers of carbon offsets are often the largest polluters looking to be absolved of their guilt
Tobi Lütke, CEO, Shopify
Carbon Offsetting has become common in business. Large corporates try to balance their environmental impact through the purchase of carbon offsets. Carbon offsets don’t fix the root cause; they purely serve as a bandaid to the issue.
Carbon offsets are better than nothing but short-term compensation rather than a long-term solution. Shopify Sustainability Fund is looking to focus on removing the carbon, rather than offsetting it.
Carbon Sequestration
When something sequesters carbon, it removes it from the atmosphere. Trees do this naturally by absorbing CO2 and storing it in their leaves, stems, trunks and roots.
Direct-air carbon sequestration looks do the same. Breaking the carbon out of air molecules and then converting and storing them in a material with practical use for humans.
Carbon sequestration is a crucial focus in the race to reduce climate change. Assuming we do not have enough time to adequately reduce the carbon we are putting into the atmosphere, the next best thing is to try and remove it.
Shopify Sustainability Fund is focusing both funds and technical expertise on this issue. Currently, a significant blocker to carbon sequestration is the prohibitive cost. Shopify aims to focus its engineering experience in assisting with reducing this.
Shopify Sustainability Fund
Starting with investing USD 5 million, Shopify intends to increase its financial commitment annually based on revenue growth. The money is to be spent on the following:
- Buying USD 1 million of sequestered carbon to kickstart the market, allowing it to scale, and pushing the price to come down.
- Carbon offset operations to neutralize the carbon footprint in Canada. By 2020, power 100% of global services with renewable energy.
- Carbon-neutral platform with all of Shopify data centres powered by renewable energy.
- Sustainable offices: Ensure all global offices meet sustainability standards, accessible for staff via public transport, and built with local materials wherever possible.
Part of the Shopify Sustainability Strategy is to further engage merchants with their Sustainability Fund, alongside offering better sustainable logistics options through their fulfilment network.
Further Reading: Ideas on Environmental Sustainability- WGSN Summit. Read More