The e-commerce company will spend at least US$1 million a year on carbon sequestration projects, which remove carbon dioxide from the atmosphere, wrote CEO Tobi Lütke in a blog post. Another US$4 million will be spent annually on programs including renewable power for its global operations, which Lütke said it will achieve in 2020. (The Logic)
Talking point: Shopify is announcing its green plans as it gets directly involved in the shipping of merchants’ products to consumers, a process that creates a lot of emissions. Lütke said the Shopify Fulfillment Network will “focus on sustainable packaging,” and that shoppers will be able to download an app that will track deliveries, the carbon impact of which the sustainability fund will automatically pay to balance. Merchants will be offered a similar app. Shopify joins a growing number of large e-commerce companies that are spending to balance their climate impact. In February, Etsy announced it will offset (buying someone else’s greenhouse gas reductions) the emissions generated from shipping all its orders, which it estimates will cost less than US$1 million per year. Shopify has chosen a more expensive sequestration method. Squamish, B.C.-based Carbon Engineering—which Lütke cited in his blog post—wants to eventually lower costs to US$100 per tonne, but it is currently significantly more expensive; offsets cost $20 to $30 per tonne. Lütke said Shopify is “intentionally overpaying” for sequestration to create demand that will drive down prices, because the practice is more effective at combatting climate change than offsets are. Stripe, which partners with Shopify on its payments service, has also promised US$1 million a year for sequestration.