It's possible that Shopify will provide a replacement for a major ESG headache

It's possible that Shopify will provide a replacement for a major ESG headache ...

Last week, the world celebrated Earth Day.

As the wave of the future, everyone had the opportunity to manifest their compassion to mother Gaia and to promote clean green energy.

Regular people and celebrities have been posting Earth Day posts on social media.

Globally, large corporations have pledged money and resources to maintain a longer-term sustainable growth. According to Invesco''s Brandon Knott, 90% of the world''s GDP is on a path to a "net-zero carbon commitment."

According to a new study, words do not always match action; if you ask executives, most will tell you that their businesses aren''t doing enough.

According to a recent Harris survey for Google Cloud, 1,491 executives from across the country found that while 96% had at least one program in place in the name of a greener future, 58% of executives stated that their organization was guilty of greenwashing.

Greenwashing is the habit of commercializing a business or business, making them appear more environmentally friendly.

According to a study, 65% of respondents wanted to "advance sustainability initiatives but don''t know how to do it." Only 36% said their organizations even have the tools to measure their efforts.

Based on the findings, only 17 percent of respondents are using these measurements to improve their performance.

The prospect of a sustainable future driven by big corporations becomes more bleaker as you look into the survey, which was conducted between December 21, 2021 and January 8, 2022.

Shopify Pushes Past Carbon Neutrality

Shopify (SHOP) - Get Shopify, Inc. Class A Reportis one of the companies that have pledged to fight for cleaner companies, and they have a diverse approach to getting it done.

In 2019, the commerce group began collecting data, and began a carbon accounting program, which would lead it to becoming carbon neutral.

"Now that we know how much we''ve spent to manage our business, we want to support projects that reduce carbon emissions," Stacy Kauk, vice president of Shopify, said.

What are carbon offsets?

Carbon dioxide that is released into the air can be reversed by absorbing an equal amount of carbon from the atmosphere through several methods, including: forestry and conservation, renewable energy, and converting landfill gases and human and agricultural waste.

Companies that want to offset their carbon emissions may purchase a carbon credit or a license, which permits the owner to emit a certain amount of carbon dioxide or other greenhouse gas.

TheStreet Recommends

Best Ways To Prepare and File Taxes

5 Cool Things Elon Musk Has Done

Mark Zuckerberg Made $11 Billion This Week

Individuals may purchase carbon offsets, which some airlines allow flyers to pay a little extra to compensate for the aircraft''s emissions. That''s a form of carbon offset.

Even this system is dysfunctional.

"In the voluntary marketplace, there are no guidelines and regulations regarding what we should do to improve our carbon footprint," Kauk said. "There''s no guidance out there, but each individual company can do what they desire.

Shopify began experimenting with how to reduce its carbon footprint, so they entered a market that was not able to provide the services necessary.

The company provided a "avoided emission offsets," where one corporation pays another not to pollute as much as the purchaser did.

"We realized in 2019 that there were not a lot of carbon credits out there that (capture carbon dioxide)" Kauk said. "We realized that there really wasn''t a market for carbon removal, and there wasn''t a demand signal there. "We must be patient about that."

"That was the foundation''s genesis," said the CEO.

In short order, Shopify achieved its objective of net carbon neutrality. Today, the company intends to distribute its mantra to sellers who use the platform to ship their wares across the globe.

"What we''re looking to do is to take all of those lessons learned and insights and transfer those powers to our merchants. We''re very proud to assist those businesses powered by Shopify in dealing with their climate impacts."

Shopify''''s Diverse Approach to Sustainability

In September 2020, Shopify announced a sustainability fund.

The aim was to increase the amount of $5 million per year spent in programs that eradicate atmospheric carbon.

In its most recent round of carbon-removal purchases, the company has agreed to give $13.5 million to nine different projects.

Shopify has spent $32 million on carbon-removal projects since 2019.

There are 22 companies supported by the organization who are aiming towards Shopify''s goal of finding "innovative ways to move green energy forward."

The Shopify Sustainability Fund has two portfolios: one is the Frontier portfolio. It invests in technologies that permanently remove CO2 from the atmosphere and stores the emissions.

The other is the Evergreen portfolio, which includes companies that remove carbon from the atmosphere, but they do not have the capacity to store other carbon capture technologies.

Around 200 firms have entered Shopify''s last procurement round, with around half of the 25 leading applicants being established in the past three years.

DroneSeed, a consortium of leading sustainability funds, has grown seeds using drones to reforest land that have been damaged by wildfires.

DroneSeed sells carbon offsets based on their reforestation efforts.

Shopify is a customer in this scenario.

In March, DroneSeed purchased carbon offsets to remove 50,000 tons of carbon from the atmosphere.

"They are using drones and technology to increase reforestation with the aim of mitigateing the worst effects of climate change," Kauk said.

You may also like: