Shopify has joined hands with Irish-American financial services company Stripe in an $11 million commitment for carbon removal projects. The joint effort aims to develop an effective technology to remove carbon dioxide from the atmosphere and carbon content from the oceans.
Companies from all over the world have started to restrict carbon emissions, scientists believe that additional support is required by using technology or nature to deal with climate change. For these projects, Shopify and companies like Stripe, Meta, McKinsey Sustainability and Alphabet have set up Frontier fund. The five companies have pledged to invest $925 million in carbon removal projects between 2022 and 2030. This will not only help speedy developments but also in reducing costs to curb carbon emissions.
“Removals don’t have an intrinsic value at the moment, and we want to give those building the technology the confidence there are going to be buyers,” Nan Ransohoff, head of the climate at Stripe and head of Frontier, said as quoted by news agency Reuters.
At Shopify, we know the only way to future-proof our planet is to reverse climate change. Even if we stopped all emissions right now, there’s still too much carbon in the atmosphere. No solution will single-handedly solve this problem. When it comes to scaling carbon removal technologies, there’s much more work to do.
Stacy Kauk, Head of Sustainability, Shopify
More About Shopify’s Commitment
As part of the project, Shopify and Stripe have pledged to buy 7,011 tonnes of carbon components from seven companies, paying a total of $3.5 million. The prices for carbon purchases will range from $227 to $1,318 per tonne. Add to this, the two companies have pledged to invest $7.5 million in technical advancements to effectively neutralise carbon emissions.
Currently, the removal of carbon contents from the environment is expensive due to the complexities involved. However, with technological advancements, the hope is to get efficient solutions to compensate for carbon emissions by companies worldwide.
Inplanet
Inplanet is one of the projects under development by the Frontier fund. The technology is expected to remove carbon dioxide from oceans using enhanced rock weathering, Carbin Minerals and Captura to separate and mine waste to trap carbon dioxide.
Stripe has committed to donating an additional $0.5 million for research and development at startups that are working on carbon removal projects. According to Stacy Kauk, head of sustainability at Shopify, the carbon purchases will be completed over the next few years.
How Shopify Helps
Kauk explained how Shopify is planning to get rid of these carbon purchases. “At Shopify, we know the only way to future-proof our planet is to reverse climate change. Even if we stopped all emissions right now, there’s still too much carbon in the atmosphere. No solution will single-handedly solve this problem. When it comes to scaling carbon removal technologies, there’s much more work to do,” she said in a blog post published on news.shopify.com.
The Sustainability Fund was started in 2019 and since then Shopify has been regularly buying carbon removal to help curb climate change. Kauk spoke of the Canadian e-commerce giant’s new commitment: “Today, alongside Stripe, we’re purchasing $11 million worth of carbon removal from six new companies: Arbor, Captura, Carbon To Stone, Cella, CREW, and Inplanet. It’s an exciting development in our fight to reverse climate change. We’re inspired by the caliber and rate of new companies entering the market. Through these purchases, we’re making it possible for them to prove their impact and scale.”
“These six new companies bring the total backed by Shopify to 28. Below, you can read more about each new partner. These new purchases are just one part of the critical work Shopify has done this year to help accelerate this market,” she added.
Shopify’s Efforts in 2022:
- Sustainability Fund
Nine businesses joined Shopify’s own Sustainability Fund this year. The Canadian company purchased carbon removal content, which helped them promote a climate-friendly vision and boost sales.
“Through our Fund activities, we’ve helped multiple companies raise over $50 million in capital and increase their employee count by more than 5x, which has enabled them to grow their carbon removal capacity by more than 1000x,”. Kauk said.
In 2021, Sustainability Fund was used to buy 400 tons of stored carbon from a processing company, Heirloom. Heirloom works on technology to accelerate carbon mineralization, a natural process to turn carbon dioxide into stone by binging the gas with minerals. The process takes years to complete, though Heirloom is trying to develop technology to complete carbon mineralization within days.
Shopify now has 28 companies as part of its Sustainability Fund. Shopify president Harley Finkelstein confirmed in a LinkedIn Post: “Earlier this year, Shopify joined Frontier, a commitment we co-founded to spend $925 million on permanent carbon removal by the end of 2030. Today, alongside Stripe, we’re purchasing $11 million worth of carbon removal from six new companies: Arbor, Captura, Carbon To Stone, Cella, CREW, and Inplanet. This brings the total number of companies in Shopify’s Sustainability Fund to 28.”
- Frontier With 4 Others
Later in 2022, Shopify launched an advance market commitment (AMC) Frontier with companies like Alphabet, Stripe, Meta and McKinsey Sustainability.
“As founders of Frontier, we committed to spending a combined $925 million on carbon removal by the end of 2030 – a signal to innovators, investors, and project developers that there is a market for carbon removal, and we all need to get to work scaling the industry,” Kauk said.
Global management consulting firm McKinsey has generated a $925 million fund for an eight-year AMC called Frontier. It aims to reduce competition in the carbon removal industry and expand its global supply.
“Reaching net zero emissions is key to building environmental resilience and to realizing a future that delivers sustainable and inclusive growth. Carbon removals have an essential role to play,” McKinsey Senior Partner Dickon Pinner had said at the time of Frontier’s launch.
“Frontier will play a catalytic role in enabling the supply of high-quality carbon removals,” Pinner added.
- Shopify Planet
Shopify released an app called Planet in June 2022. It helps merchants reduce their shipping emissions. Kauk explained how it works: “Planet calculates the estimated shipping emissions from every order. Merchants then remove these emissions by funding the same carbon removal companies supported by Shopify.”
“Since launch, more than 8,000 Shopify merchants have used Planet to neutralize their shipping emissions on more than six million orders, totaling over 5,000 tonnes of carbon removal. Shopify merchants can install Planet from the Shopify App Store,” she added.
Another high-leverage project for the environment includes Shop Pay. Explaining how it works, Shopify states on its website: “Every time a customer places an order using Shop Pay, Shopify funds carbon removal to counteract the impact on the planet at no extra cost”.
- Carbon Removal Purchase
As the year 2022 is about to end, Shopify has just launched a comprehensive guide for all to help save the planet earth. Titled ‘Buying Carbon Removal, Explained,’ the guide encourages carbon removal supporters to join the movement.
“Buying Carbon Removal, Explained covers everything from researching suppliers to inking your first carbon removal contracts, and what to say to scrutinizing finance teams,” Kauk said.
“We’re committed to doing all we can to generate demand for carbon removal, enable new companies to prove their impact and scale, and spend millions every year to drive down future prices,” she added.
Stacy Kauk’s Ted Talk
Recently, Kauk spoke about Shopify’s effort to save the planet earth at the TED Countdown London Session. She shared the video on LinkedIn, saying: “Want to know what accelerating some of the most important technologies of the 21st century could look like? Huge thanks to TED Conferences for the chance to explain Shopify’s collaborative approach to scaling carbon removal.”
“Delivering this TED talk was a big undertaking, but it’s nothing compared to the challenges being tackled by Climeworks, Running Tide, and Heirloom, to name a few, who are finding ways to extract gigatonnes worth of carbon from the atmosphere,” she added.
Heirloom is a company that works on technology to accelerate carbon mineralization, a natural process to turn carbon dioxide into stone by binging the gas with minerals. The process takes years to complete, though Heirloom is trying to develop technology to complete carbon mineralization within days.
“Since our purchase, they’ve dramatically improved the rate that they’re able to demonstrate carbon capture using limestone, and that enabled them to unlock their latest Series A funding round, where they managed to pull together $53 million,” Kauk told fortune.com earlier.
About Heirloom
Heirloom has scaled up its carbon capture operations with an aim to sell carbon credits to Frontier, an advanced market commitment (AMC) between Shopify, McKinsey Sustainability, Alphabet, Meta and Stripe. All these companies are contributing around $1 billion to develop technology for permeant carbon removal.
In September, Shopify helped one of the prime coffee brands based on its platform, Paddy & Scott’s turn carbon neutral with Shopify’s environment-friendly shipping service.
With its base in Suffolk, the United Kingdom, Paddy & Scott’s uses Shopify’s ‘Planet—Carbon‑neutral shipping‘ application. It is free to install using Shopify App Store. By automatically calculating estimated shipping emissions on each order placed on Paddy & Scott’s Shopify store, the app charges the merchant a small fee to neutralise the carbon footprint.
About Paddy & Scott’s
Paddy & Scott’s is already an environmentally friendly brand as it uses paper cups and recyclable packaging material to reduce plastic use. Joining the new journey with Shopify’s Planet—a Carbon‑neutral shipping app, the coffee brand aims to take climate-conscious values a step ahead.
“From our compostable paper cups to recyclable coffee packaging, we are always looking at ways to reduce our use of single-use plastic and lower our CO2 emissions. We are thrilled to be using Shopify and now be able to promise our customers, who share our climate-conscious values, that any deliveries will be carbon neutral going forward,” Paddy & Scott’s CEO Jon Reed said as quoted by retailtimes.co.uk.
On its Shopify store, Paddy & Scott’s features icons that explains the company’s commitment to removing carbon from the atmosphere. It also features testimonials by customers who care about the environment and have joined Paddy & Scott’s in its initiative.
“Paddy & Scott’s monetary contributions from each customer order will go towards funding cutting-edge carbon removal projects that have the potential to reverse climate change. This fits with our passion for supporting sustainable and eco-friendly projects around the world,” Reed added.
Shopify’s Intent
Shopify’s focus is not just commercial but also on creating a sustainable environment. On its website, the Canada-based e-commerce giant states: “Shopify brings merchants, customers, and climate entrepreneurs together in the fight against climate change”.
Shopify constantly works to empower sustainable commerce by helping Shopify merchants neutralise shipping emissions. For this, Shopify has partnered with experts to develop high-leverage projects like Shop Pay. Explaining how it works, the website states: “Every time a customer places an order using Shop Pay, Shopify funds carbon removal to counteract the impact on the planet at no extra cost”.
ALSO READ: This is How Shopify is Making Earth a Better Place to Live
In its bid against carbon, Shopify has pledged to purchase carbon removal during Black Friday Cyber Monday (BFCM) to reduce shipping emissions from every single order placed during the busiest shopping season. In the last two years, Shopify had offset a total of over 120,000 tonnes of carbon.
After the conclusion of the 2022 Black Friday Cyber Monday (BFCM) sale, Shopify claimed in its report that unlike the BFCM sales from the past years, this year witnessed 56,000+ tonnes of carbon removal in a bid to ensure a sustainable future. The carbon removal mentioned above was funded to compensate for the delivery of every BFCM order placed on websites powered by Shopify.
Shoppers have also become more climate-conscious than ever. As per Shopify’s research, more consumers were seen searching for sustainable brands and options like carbon-neutral shipping. Shopify purchased the carbon removal for a third consecutive time. This compensates for the harm caused by all orders shipped during the Black Friday Cyber Monday weekend.
