Shopify: building a 100 year company
Over the past fifteen years, Shopify has grown from just a handful of people in a coffee shop in Ottawa to a team of over 7,000 powering more than 1,700,000 businesses worldwide. But for a company with a one hundred-year vision, it’s still early days, and one of the most serious long-term threats to success is climate change.
What began as a project to measure and offset Shopify’s corporate footprint has evolved into a comprehensive effort to identify and pursue systemic emissions reductions across the entire value chain.
They started by powering cloud storage with renewable energy, offsetting corporate travel, and sourcing enough renewable energy to power their offices. In 2019, Shopify launched a $5M annual sustainability fund to invest in the most promising climate technologies and solutions. As part of this, Shopify became one of the first companies to commit to spending at least $1M/year on permanent carbon removal.
The pivot to remote
But at the start of 2020, as Shopify’s entire global workforce shifted to remote working, the sustainability team realized that their existing carbon footprint model — which focused primarily on emissions from offices, energy supply and corporate travel — would make it hard to analyze the company’s changing footprint during COVID.
A surface-level view suggests remote working means lower corporate emissions: fewer commutes, lower energy consumption in offices. But Shopify knew it wasn’t that simple: remote working shifts emissions from central offices to networks of employee homes, producing second order effects as employees adapt their behaviors.
Shopify partnered with Watershed to analyze this shift, looking at current emissions and modeling future decisions, too: if the company delivered food or hardware to employees at home, what would that do to its footprint?
The team went a step further, calculating emissions from their entire value chain by crunching millions of lines of unstructured data on capital investments, purchases, payment processing, shipping, and more.
“With Watershed, we went from generic industry averages for the carbon intensity of remote work to a live model of Shopify’s emissions, built on our own data, in a few weeks,” said Stacy Kauk, Director of Shopify’s Sustainability Fund. “It’s opened up a thousand new routes to drive down emissions, and given us the confidence to pursue them strategically.”
Leverage in the value chain
The work highlighted that Shopify’s footprint is more complex and fragmented than the team had previously been able to compute. Areas like corporate travel and energy supply to buildings were well documented, but they were now able to track the impact of other vectors—from how merchants shipped goods to how vendors used electricity.
This has opened the door to broader emissions reductions, leveraging their role as both buyer (to thousands of vendors) and infrastructure provider (to more than 1.7 million merchants worldwide).
The new model became a platform for immediate action. In December, Shopify offset all 62,000 tonnes of emissions from Black Friday and Cyber Monday weekend deliveries processed via their platform, through a combination of carbon offsets and removals. They’re now starting to work with vendors and teams to build carbon into daily decision-making on offices, delivery, and procurement.
In a few months, Shopify went from a static view of emissions from offices to identifying opportunities to work with suppliers and employees to cut carbon more broadly. We’re proud to partner with them on this journey.