Selecting projects for funding 

To identify the most promising projects and technologies to finance, Shopify developed a targeted approach focusing on a few key criteria. Evaluations were based on life cycle analyses at different stages of development, potential to scale, annual removal targets and cost per tonne of CO2 removed. Operational considerations such as potential environmental impacts and co-benefits were also considered.

With the help of an extensive network of experts, scientists, and leaders in carbon removal, Shopify undertook own research, conducted due diligence procedures and developed relationships with potential investments, taking time to understand the core business, roadmaps and obstacles faced by each.

Shopify also set portfolio targets for the Sustainability Fund based on the stated objective to explore all “verticals”, i.e. categories of carbon removal, adding an additional goal of investing in every one of these verticals in order to ensure a truly balanced selection.

(Source: Shopify Sustainability Fund Playbook)

The “spend per vertical” is monitored in three ways:

1. Spend on evergreen (24%) vs frontier (76%) solutions

  • Evergreen solutions temporarily remove carbon or reduce carbon emissions. They are a necessary feature of carbon removal portfolios while longer-term removal technologies are still scaling.

  • Frontier solutions are ground-breaking technologies that demonstrate permanence and additionality that is enhanced by orders of magnitude. Shopify’s goal is to spend most of the fund in this category each year.

2. Spend on an individual vertical basis

3. Spend on commercial (71%) vs pre-commercial (29%) solutions

(Source: Negative Emissions Platform, Factsheet: Corporate purchases of carbon removal credits, July 2021)

Shopify has made their carbon removal purchases process publicly available to encourage other companies to embark on similar journeys.

The Shopify Playbook contains details of the processes including research, recommendation / decision and company performance templates.

(Source: Shopify Sustainability Fund Playbook)