Shopify is leading the sustainability movement for tech companies worldwide. In 2021. the company’s 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.
“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,” Stacy Kauk, Shopify’s head of sustainability, said as quoted by fortune.com.
Frontier AMC
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.
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.
What is AMC?
AMC is a type of funding that was earlier used to incentivize vaccine in places with less or no availability. For carbon removal, it aims to fill up a similar market gap. Frontier AMC claims that buyers across the globe are ready to pay for permanent carbon removal technology.
Carbon removal practices by tech companies will contribute a huge share in fight against climate change.
“With Frontier, we want to send a loud demand signal to entrepreneurs, researchers, and investors that there is a market for permanent carbon removal: build and we will buy,” Nan Ransohoff, Stripe’s Head of Climate, said.
Just like Shopify, Stripe has also been interested in sustainability movements with its Stripe Climate operations. It admits that current technology of temporary carbon removal is incredibly expensive.
Shopify’s Commitment
The Canadian e-commerce platform has its focus not only on commercial aspects but also on creating a sustainable environment. On its website, Shopify writes it “brings merchants, customers, and climate entrepreneurs together in the fight against climate change”.
It helps Shopify merchants neutralise shipping emissions with a free application called Planet—Carbon‑neutral shipping. “Planet automatically calculates your shipping emissions, and ensures high-quality carbon removal to neutralize your shipping footprint,” it explains the app functionality on Shopify App Store.
Another high-leverage project for environment includes Shop Pay. Explaining how it works, Shopify 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”.
Why Now?
It is need of an hour for tech companies to pool put in their contribution to develop permanent carbon removal technology. Intergovernmental Panel on Climate Change (IPCC) claims in its recent assessment that the removal of carbon dioxide is “an essential element of scenarios that limit warming to 1.5° C or likely below 2° C by 2100”.
“Carbon removal is not a replacement for deep decarbonization. But there isn’t a world where we can have the life that we enjoy living without also actually developing this removal technology, and at massive scale,” Peter Minor, director of science and innovation at Carbon 180, said.
