In May 2020, Shopify announced that it was now a digital-by-default company. That means we’ll keep our offices closed until 2021, and after that, most employees will work remotely on a permanent basis.In the words of our CEO Tobi Lütke, “office centricity is over.”
As of today, Shopify is a digital by default company. We will keep our offices closed until 2021 so that we can rework them for this new reality. And after that, most will permanently work remotely. Office centricity is over.
— Tobi Lutke (@tobi)May 21, 2020
While Shopify plans for this new normal, one question has loomed large on my mind:
What does going digital mean for the company’s carbon emissions?
To answer this question, we’re running an experiment to find out what impact teleworking has on energy usage and emissions. We plan to open source our findings based on our dataset of global employees.
Emissions in a digital world
In October 2019, Tobi shared a thought that had been troubling him for years: There is too much carbon in the air. He pledged $5 million annually toShopify’s Sustainability Fundto invest in technologies that could help solve the climate crisis.
Tobi hired me to run that fund. I’m an environmental engineer by trade. Since joining Shopify’s team earlier this year, I’ve been ramping up our operations so I can distribute our fund to the right places at the right times.
We havepublicly committed to being carbon neutral, and we’re on our way to becoming net zero, removing CO2permanently from the carbon cycle. We’ve publisheda field guide to our carbon offsets selection process. And, like many companies, we’ve been measuring, tracking, and addressing our energy usage within our offices by purchasing offsets and renewable energy credits. But going digital by default has changed the game.
Now, our business emissions are no longer centralized within dedicated office spaces. Instead, they’re integrated into the home offices of more than 6,000 Shopifolk spread across the globe. This doesn’t alter our commitment to climate, but it does present new challenges.
Will this new work-from-home normal increase or decrease our energy usage and carbon emissions? Will they remain the same? What can be measured? What should be included?
We’ve been looking at existing research to see if our questions have already been answered. To make a long story short: they have not.
Is working from home better or worse for the environment?
The online journal IOPscience recently publisheda review of 39 studies远程工作的气候影响。Twenty-six of those studies suggest that working from home reduces energy usage, and eight found that it could increase, or have the same impact on, energy use.
The problem is that every study included in this review uses different methodologies, scopes, and assumptions. Every case is different, and results varied based on the activities that were included and excluded. Some studies calculated energy usage for a single person; others looked at a percentage of the population. Some calculated commutes for a few days per week or month; some looked at every workday. Most studies focused on a narrow range of impacts, like commuter travel alone, because that’s the easiest to measure—but there are so many other factors to consider.
For now, it remains unclear whether working from home leads to increased, decreased, or equal emissions when compared to traditional office work.
Behavioral changes when working from home
Remote work can create ripple effects that dramatically alter people’s behavior—whether that’s to the benefit of the climate, we don’t yet know.
The big and obvious upside of remote work is that it eliminates emissions from employee commutes, but the overall picture is far more complicated. New work environments result in changes to employee behavior that are hard to measure and impossible to predict. Those ripple effects could outweigh the benefit of eliminated commutes.
For now, it remains unclear whether working from home leads to increased, decreased, or equal emissions when compared to traditional office work.
Commuting
Some employees might decide to move outside the city, since they no longer need to be close to the office. This could mean that while they save energy by not commuting to work each day, they actually generate more emissions by travelling further distances to attend social events, run errands, or spend occasional days in the office. They may no longer be able to take public transit, and purchase a car instead.
One commuting research studyconducted by the University of Newcastle found that the 7% of commuters’ trips that were more than 50 kilometers generated 60% of the carbon emissions studied. The longer the commute, the greater the emissions, especially when a vehicle is only transporting one person, instead of a bus or train where the emissions benefit significantly more people.
Energy use
Working remotely might also lead to increased energy usage at home for things like heating, cooking, and lighting.A study by WSPfound that working from home in the summer led to a 5% reduction in annual emissions from a typical commuter. But come wintertime, an average employee working from home produced around 80% greater carbon emissions than someone working from an office. Heating each individual’s house throughout the workday isn’t nearly as efficient as heating a central office space. Since most of Shopify’s workforce is based in cold Canada, this is something we may come across in our research, too.
Lifestyle changes
We also have other questions: Will more employees order meal plans and make more online purchases, increasing their overall shipping emissions? What temperature will people set their homes at? What heating and/or cooling system will they use? Will many people leave cities? Will they rent or purchase a larger home since they now spend more time there? Can they still bike as their primary method of transportation? These are all questions we're looking to answer.
Climate cannot be an afterthought
Environmental sustainability needs to be integrated into the design of every single part of a business. It cannot be an afterthought. If we’re building for the long term, consideration for the planet needs to be baked into how we design products, services, and systems for our entire ecosystem.
Shopify has the opportunity to build climate consciousness into the fabric of our digital-by-default strategy. We will go beyond what is easy to measure, quantifying employee behavioral changes and attempting to put together a complete picture of remote work—or as close to complete as we can get.
The answers to our questions will slowly reveal themselves in the coming months as we settle into our new routines. We’ve established a baseline from 2019 for a 6,000+ employee company working centrally in offices, and as we transition to digital by default, we're putting tools in place to measure our new footprint.
Shopify’s digital-by-default climate commitment
We believe Shopify has a unique opportunity to:
- Compare our 2019 office-based carbon footprint with our digital-by-default footprint
- Explore approaches to measure, reduce, and address our new disaggregated footprint
- Document and measure the ripple effects as Shopifolk adapt to remote work
- Open source our learnings to remove friction for others looking to make climate-conscious decisions in a work-from-home world
This is a huge endeavor. We now effectively have more than 6,000 offices scattered around the globe, with different heating systems, different energy grids, and each employee making different decisions now that they’re untethered from a central office.
We’ll be transparent, however this goes
I’m not a betting person, but if I were to call it, I think our digital-by-default approach will create a smaller carbon footprint than before. But we don’t know for sure yet, and we’re not doing this to be predictive.
We’ve also never tracked our employee commutes—this hasn’t historically been part of our offsetting process. Our office locations were always carefully selected to be centrally located, close to public transit, with high walkability scores. Most of our employees lived close to one of those offices. Compared to corporate travel, this part of our footprint has historically been small, but we’ll be retroactively calculating commute distance now to factor it into our overall comparison.
We will go beyond what is easy to measure to put together a complete picture of remote work.
We don’t want to have adverse effects on the environment, but our primary objective is to create a culture that is productive, effective, and inclusive. We will be fully transparent along the way as we discover our new footprint, and we’re open to doing everything we can to balance our company culture with environmental stewardship.
We will present our findings, whatever they are, for better or worse, to contribute to a new global understanding of how working from home impacts the planet.
We’re going digital, and we’re bringing our merchants with us
The whole world has been thrust into this accelerated digital-by-default world. It’s happening whether we embrace it or not.
“COVID is challenging us all to work together in new ways,” Tobi wrotein a Twitter threadannouncing our digital-by-default decision. “We choose to jump in the driver’s seat, instead of being passengers to the changes ahead. We cannot go back to the way things were. This isn’t a choice; this is the future.”
Anew report from Gartnerfound that 41% of employees are likely to work remotely at least part-time following COVID-19, up from 30% before the pandemic. This isn’t a short-term trend. Working from home is here to stay and will likely be adopted more and more as new norms and tools are created.
As we race toward this new reality, we will help others adapt, too. Yes, we want to better understand and reduce Shopify’s overall carbon footprint, but our larger goal is to help other entrepreneurs make better climate decisions from their home offices.
If even a small number of Shopify’s one million merchants think more deeply about their environmental impact, it could contribute to a global sustainability movement. That’s why we’re doing this.
Stay tuned for more on our findings, decisions, and lessons learned. If you’ve seen research measuring energy use in home offices compared to traditional offices, we’d love to see it. Email us at environment@shopify.com, or leave a comment below.
Illustration by Borja Bonaque