Evaluating a company's impact (the case of Shopify)

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You are reading Green Digest Impact, a bi-weekly newsletter that provides in-depth analyses of companies’ environmental and social impact.

OUR APPROACH

Central to our narrative is the principle of double-materiality, which recognizes that a company's impact is twofold: it affects both the environment and society at large, and in turn, these external factors influence the company's financial and operational performance.

While traditional ESG assessments focus on the latter, we aim to examine companies' direct impacts on these factors. In pursuit of this, we introduce a unique scoring system that quantifies a company's impact.

The insights and analyses presented in Green Digest Impact are brought to you by a partnership between Green Digest and Impaakt, a Swiss-based impact data provider. Contact Impaakt here to explore how they can assist you.

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THIS WEEK’S COMPANY

Shopify

This week, we dive deep into Shopify’s environmental and social impact.

Shopify is a leading e-commerce platform that enables individuals and businesses to create, customize, and manage online stores with integrated tools for payments, marketing, shipping, and customer engagement. Founded in 2006 and headquartered in Ottawa, Canada, Shopify powers millions of merchants globally and supports commerce across multiple sales channels, including web, mobile, social media, and brick-and-mortar locations.

Some interesting facts:

• Shopify was originally created in 2004 by Tobias Lütke and Scott Lake to sell snowboards online under the name “Snowdevil.” When they couldn’t find a good e-commerce platform, they built their own - Shopify was born from that need.

• Shopify powers millions of businesses – from solo entrepreneurs to major global brands like Allbirds, Kylie Cosmetics, and Gymshark.

COMPANY’S IMPACT

Shopify’s overall impact score

Shopify has a general impact score of +0.91 (on a scale from -5 to +5). Its impact is spread across five European Sustainability Reporting Standards (ESRS) topics, split between positive and negative analyses.

In the socio-economic sphere,

Shopify is a global commerce technology leader, powering millions of businesses in over 175 countries and processing over 5.5 billion orders through its platform. Its platform supports over 2 million merchants, with more than 700 million unique online shoppers purchasing from Shopify merchants. Shopify's business is designed to empower merchants of all verticals and sizes, from aspirational entrepreneurs to large-scale direct-to-consumer and B2B operations, by offering a comprehensive, multi-channel commerce platform that supports their growth. With over 16,000 apps available in the Shopify App Store, merchants can customize and enhance their stores to meet specific business needs.

On the downside, Shopify has faced criticism over data security concerns. In July 2024, a hacker claimed to possess a database containing sensitive information of over 836,400 Shopify customers, including delivery details, email addresses, and billing names, thus raising concerns about data protection and risks from third-party apps.

Environmentally,

Shopify reported emitting over 24,700 tonnes of CO₂e emissions, with Scope 3 activities - particularly Business Travel - accounting for 90% of the total carbon footprint. To minimize its environmental footprint, Shopify has offset its carbon footprint through renewable energy certificates, carbon removal credits, and renewable natural gas credits, thus having net-zero operational emissions. The company provides limited environmental disclosures, omitting key metrics such as energy consumption, water usage, and other resource data.

_{*The impact score is current as of June 2025 and may be subject to changes as it is continuously updated.
**You can find details about the scoring methodology here and the information sources here.}

SCORES BY ESRS

Shopify’s impact scores by ESRS topics

Positively (and by weight), the company scores the highest in S2 - Workers in the value chain (+3.19), followed by S4 - Consumers and end-users (+3.16) and G1 - Business Conduct (+2.50).

Negatively, the company scores the worst in S1 - Own Workforce (-0.23), followed by E5 - Resource Use and Circular Economy (-2.62) and E1 - Climate Change (-2.50).

*the analysis takes into account the weight and impact materiality of each topic

CONCLUSION

Materiality Map & Final Words

So, Shopify’s key social and environmental impact lies in …

its pivotal role in empowering businesses of all sizes to start, grow, and thrive in the digital marketplace. Operating in over 175 countries, Shopify supports over 2 million merchants and processes more than 5.5 billion orders annually, enabling digital commerce and driving economic growth.

However, this impact is counterbalanced by data security concerns, raising questions about the protection of customer data. On the environmental side, the company could improve by offering greater transparency in its disclosures.

Shopify's overall impact of +0.91 reflects its pivotal role in enabling digital commerce, balanced with the need for enhanced data security measures to mitigate risks and protect users.

If you’d like to delve deeper into Shopify’s impact, you can explore it here.

If you'd like to learn more about the scoring methodology, you can do so here.

Do you have a specific company you'd like us to cover? Send your suggestions to [email protected]

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