Shopify is launching an investment fund to spur demand for sustainable technologies in hopes others looking to mitigate the impact of climate change will follow suit.
CEO Tobi Lutke published a letter Thursday announcing the Shopify Sustainability Fund. In it, he reflected on a pledge he wrote before the Ottawa e-commerce giant went public in 2015, that he wanted the company to see “the next century.” He now believes Shopify must play a role in ensuring “that the next century is worth reaching.”
He wrote at length about the planet’s ongoing environmental crisis, how record levels of carbon in the earth’s atmosphere are contributing to rising sea levels and other ecological threats. He also chastised current corporate efforts to combat climate change such as carbon offsets, which he believes do not go far enough to reduce the amount of carbon companies are putting in the air.
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Shopify’s role in addressing these environmental issues will be a sustainability fund that attempts to drive market demand towards technologies that Lutke believes could help to reverse or mitigate the effects of climate change, but which are currently prohibitively expensive to work at scale.
One of the fund’s primary investments will be in carbon sequestering technology, a process by which carbon molecules are extracted from the atmosphere and converted into inert carbon bricks or even into valuable products.
Lutke wrote that it’s currently magnitudes more expensive to remove carbon from the air using sequestering solutions rather than mainstream offsets, but Shopify’s fund will look to lead the market “by intentionally overpaying for carbon sequestration to kickstart the demand.”
The theory is that if the fund can help cleantech developers achieve scale, the price of carbon sequestering solutions would then drop, making it easier for others to also invest in the sustainable option. Lutke noted that technologies such as lithium-ion batteries have dropped dramatically in price since electric cars first hit the streets, and he hopes to drive similar market demand in clean tech.
“The fund will intelligently commit every dollar to the most promising, impactful technologies and projects fighting climate change globally, even if it means overpaying for them,” Lutke wrote.
The Shopify Sustainability Fund will invest a minimum of US$5 million annually in technologies such as carbon sequestering, though Lutke wrote that he expects that commitment to increase as the business itself continues to grow. The fund’s investments will also go towards greening Shopify’s own operations, including a plan to power 100 per cent of the firm’s global offices with renewable energy sources in 2020.