Our 2020 Sustainability Report
Beyond Good Intentions
This is our second Sustainability Report that we've published (our 2019 report is here). In it we detail how our studio confronts climate change and other related environmental impacts.
For some of you the most valuable aspect of this report might be our open source carbon accounting — how we calculated our emissions in a year of tremendous flux. Like many other technology companies, we transitioned from an in-person office to fully-remote at the beginning of 2020. This change held implications for our accounting methodology which we walk through in this report.
Others might be drawn to this report for higher level matters. What does it actually entail for a studio to be 'carbon negative'? How might agencies think of their digital deliverables as 'downstream' products in carbon intensive supply chains? What impact can a twenty-five person team really have on an issue as large and complex as climate change? We hope that this report provides equally transparent logic around difficult impact questions as it does carbon accounting.
Above all other things Sanctuary is an organization that strives to go beyond mere good intentions. Often studios like ours begin life with the best of intentions, but as time goes on, these initial goals can slip by the wayside as money, stress, clients, and deadlines take to the foreground. Going beyond good intentions for us means setting practices that ensure our employees are paid fairly, get good health insurance, and enjoy a meaningful work-life balance. The same applies to how we approach sustainability. While it's not insignificant work to address your climate impacts as a company head-on, we think that our greatest impact comes from the second-order effects that come moving beyond the confines of just our small studio. We want to show our peers that while 'corporate sustainability' may be a monolith, addressing it doesn't have to entail checking off a list of narrow, often meaningless boxes. Going beyond good intentions means not just addressing Sanctuary's relationship to climate change, but addressing climate change full stop.
Our 2020 Sustainability Efforts in a Nutshell
As with 2019, we calculated our studio's climate impact, this time using both the accounting framework we developed last year and a third party calculator tool. Our emissions went down considerably, which was mostly a result of shifting our company to remote work and flying less.
We purchased 90t worth of carbon offsets from Climate Neutral based on an additional estimate of our 2020 footprint using their BEE calculator.
We followed though on our commitment to offset Sanctuary's historic emissions since before we carried out our yearly reporting.
We felt unsatisfied with buying a nominal amount of cheap carbon credits and calling it a day so we also made donations climate activists and an environmental nonprofit.
We developed and started using a client approval framework to ensure we aren't aiding environmentally irresponsible companies.
We spun out a new sustainability-focused consultancy called Seaborne
Sanctuary's 2020 Climate Impact
For our comprehensive studio footprint calculations, we used the same process that we developed in 2019. Please refer to that Sustainability Report for a more detailed description of our this methodology. We've captured this year's data in a new tab in that spreadsheet, and provided a written accounting methodology to accompany it.
To give a brief summary, this manual calculation method is based off the GHG Protocol's framework for assessing emission 'scopes.' A accountant moves through an organization's manufactured products and capital, and makes estimations based on the emissions intensity of each discrete process that surrounds them. You start by understanding the direct emissions that a company like Sanctuary emits (i.e. did Sanctuary burn fossil fuels?). This is scope 1. Next you assess emissions that come from direct electricity purchases (i.e. how much electricity did Sanctuary buy from our utility). This is scope 2. Finally, you grapple with all the remaining emissions that lie up and down Sanctuary's supply chains (i.e. how much power did remote employee laptop's consume?). This is scope 3. Add all of these together and you get a carbon footprint.
In Sanctuary's context Scope 1 emissions are nonexistent. Scope 2 emissions, which in the past were already somewhat small, grew even smaller as we got rid of our office and employees started working from home. Scope 3 emissions are generally where the bulk of our climate impacts come from. As a software studio, cloud computing specifically is a major source of emissions, accounting for roughly half of our entire carbon footprint.
Our cloud compute usage is much lower than last year, because we moved Spirit Fish hosting to an org level account (and started donating 1% of all payments to Stripe’s Climate product). That means our usage now mostly consists of R’n’D projects, as we don’t consider hosting accounts that are run on behalf of our clients in these calculations.
Whether its office supplies, server usage, or flying, these emissions decreases are potentially deceiving. Like the 'V-shaped' recovery that rest of the economy and its emissions levels took on, it might be the case that our footprint decrease was a short term reflection of a pandemic-ridden macroeconomic environment. In terms of emissions reductions that might persist into the future, most of our attention has gone towards cloud computing. We’re now platforming all of our new client projects onto Google’s Firebase, as Google’s Cloud currently seems like the best balance of green computing to performance.
Here are our final calculations:
Scope 1 (0%)
Scope 2 (6.4%)
Studio Electricity — 1,313.24 kg CO2e
Total Scope 2 Emissions = 1,313.24 kg CO2e
Scope 3 (93.6%)
Laptops — 1420.08 kg CO2e
Cloud Computing & Web Hosting — 10,789.791 kg CO2e
Privately owned vehicles — 63.02 kg CO2e
Employee Commuting — 601 kg CO2e
Electricity for Commuting — 3.5 kg CO2e
Business Travel Vehicles — 268 kg CO2e
Business Travel Flights — 652.60 kg CO2e
Miscellaneous (Studio Materials, Meals, Hotels, Phone, and more) — 5,230 kg CO2e
Total Scope 3 Emissions = 19,274.40 kg CO2e
Total Carbon Footprint Emission for 2020 = 20,587.63 kg CO2e.
In comparison to 2019, where our total carbon footprint was 129,480.91 kg CO2e, our total in 2020 decreased by 84.1%
A pragmatic approach to measuring corporate carbon footprints
In addition to this assessment based on the GHG Protocol's framework, earlier this year we worked with Climate Neutral, and used their internal BEE tool to estimate (and eventually offset our footprint). It was our first time working with them, and the process was slightly different from how we put together these reports.
We wanted to try out Climate Neutral's calculator tool because it's a much easier approach than manually calculating emissions. If you're reading this as the owner of a small business similar to ours, and you care about climate change but don't necessarily have the staff, time, or resources to take on a self-driven sustainability investigation, tools like the Climate Neutral calculator make carrying out this process much easier. This increased ease doesn't come without tradeoffs though. Carbon calculator tools almost always sit on a spectrum where one end is expensive/accurate, and the other is cheap/approximate.
Climate Neutral's BEE calculator tool uses a model of estimation called input–output. It means that it relies on emissions averages across entire sectors to make projections about an individual companies contribution to that whole. By entering a businesses' financials you can hypothetically determine your emissions slice of the pie.
How did this model stack up to a manually measured GHG Protocol method? As you can see on the piechart below, the BEE calculator estimated our carbon footprint to be 90t CO2e. This is significantly higher than the 20t CO2e figure we got from manual calculations.
Offsets, Offsets, Offsets
A rule of thumb that we've pursued at with Sanctuary's carbon accounting is 'when in doubt, overestimate.' So even though it's likely that 20t of CO2e is a more accurate number for our organization's carbon footprint in 2020, we decided to use the output from BEE calculator tool of 90 tons as basis for surplus emissions that we would have to purchase offsets for.
"Offsets?" you might be thinking. "Aren't those scams? Or at least not that helpful?" To this we say, yes and no. There are no doubt fraudulent offsets that are traded hands constantly. And the idea that companies can simply buy their way out of the responsibility of reducing their emissions is something we are very critical of. Yet assuming companies do everything in their power to reduce emissions, and there are residual emissions left, offsets persist as really the only mainstream solution for addressing these remaining emissions. We don't love them, but they are better than nothing.
As such, we purchased 90 tons worth of offsets from Climate Neutral at $4.95 per ton of CO2e (plus certification and brand license fee). This totals $857.50 — please see below for receipt.
Studio Carbon Negative, Redux
In 2020 we followed through on our commitment from 2019 to achieve carbon negativity — which is a fancy way of saying that we retroactively offset our studio's carbon footprint since Sanctuary's inception. Our calculation framework for determining historic emissions was to scale back our 2019 accounting framework on the basis of company size. This would ensure we had a conservative estimate for Sanctuary's yearly emissions from 2015-2018 (~200 tons). We then purchased two types of offsets
Terrapass. We chose Terrapass because they support promising new offsetting techniques that capture methane gas to turn into electricity. They work with landfills to capture gas that would normally find its way into the atmosphere - they also work with dairies and farms to capture biogas from animal waste through a process called "Anaerobic Digestion". In both cases, the gas is converted to electricity.
Pachama who leverage AI powered satellite monitoring to ensure that drawn-down carbon stays where it is. They're also the team enabling Shopify's Offset app: https://apps.shopify.com/offset
Beyond Offsets
A result of doing our climate calculations for two years now is confronting just how tiny Sanctuary's impact is relative to other corporate entities. As an entire 25 person studio, our emissions in 2020 weren't higher than a couple of average Americans (@16 tons CO2e per person). Even assuming a scenario where we rent another office, start commuting more, have higher electricity bills, etc, Sanctuary will still not be in the position of producing more than several hundred tons of CO2e per year. This might sound like a lot but it's paltry compared to similarly sized companies producing physical goods.
The price we paid for Climate Neutral offsets ($4.95) is common across the industry, but we are of the opinion that even if the credits purchased are verifiable and high quality, this carbon price does not internalize the underlying externalities of climate change. If not cheap offsets, the question remains — what does serious climate action from a company like ours look like?
The paradox with corporate climate action is that companies who generally have the greatest ease committing to 'real' work, are those whose work has the lowest marginal impact. It's all good and great that Sanctuary Computer is carbon negative, but if the effort to achieve this consists of spending a few hundred dollars on commodity class offsets, what is our net effect on a problem measured in the gigaton scale?
Much of this report might be framed as a tutorial for how to measure a company's carbon footprint, but we don't actually think that carbon footprints are the be all-end-all for climate action, at least for smaller companies like ours. In as much as they emphasize focusing on your own slice of the climate problem, carbon footprinting and offsetting have a tendency to deemphasize the big-picture view of climate change. What good is our work here if governments and massive corporations aren't doing anything?
At Sanctuary we're interested in addressing climate change full stop, not just our limited involvement in it. Our interest isn't the product of self preservation. Frankly, climate change doesn't pose any more of a risk to Sanctuary Computer than it does any other company. We're motivated to take substantive action on problems like climate change because it's the right thing to do. It's a simple as that.
What does corporate climate action look like when you move beyond offsets? For us the answer is in supporting the passing of progressive climate legislation in the US, where we operate. Supporting nonprofits and activists that directly push forward the agendas of bold climate policy is a clear lever for change. Groups such as a Sunrise have had a demonstrable impact on climate legislation in the US, and while we remain in a moment where historic climate legislation is imminent yet unrealized, activists can play an outsized role in expanding what is possible. For businesses, does a financial contribution to an activist nonprofit fulfill the same black-and-white logic as an offset? No. But can doing so have a much greater marginal impact than a $400 purchase of forest management offsets? We think so.
As such, we decided this past year to donate a modest amount (~$2000) to two different nonprofits that resonate with our stances on macro and micro sustainability issues. The Climate Justice Alliance helps spur climate solutions that are rooted in justice and fair transitions to a clean economy. The Lower East Side Ecology Center works on urban sustainability in Sanctuary's backyard in NYC. They operate a long standing e-waste recovery operation which is close to our hearts as a technology company. We're proud to support these two organizations.
Moving forward Sanctuary will continue to support effective nonprofits with a dedicated annual fund.
Client Selection Framework
Another way that we're thinking about our impact beyond the scope of offsets is in regards to the clients we take on and as a result, the products we help put out into the world. In 2020 we started creating moral compass guidelines that we can use to turn away leads that are environmentally or socially extractive, as well as incentivize work with orgs that create positive externalities.
We at first found it difficult to draw a finite line around clients who are extractive and those who aren't. So when it comes to turning away work, we started with a gut test. We won't work with:
Hyper-consumerist products (like fashion, cosmetics & beauty products) that can’t show a valid sustainability initiative
Hype or Desire driven industries that survive on short, focused bursts of (mass produced) cycles to sustain the business
Products that claim a level of sustainability, but obviously undermine it (aka, obvious greenwashing)
“Premium mediocre” products (cheap, mass produced) where the only value or innovation to the category is aesthetics or branding
On the flip side we wanted to make it easier to work with organizations that are doing good. To this end we started providing an 'innovators discount' of 10% to a wide variety of orgs who illustrate a commitment to ethicality. This could mean making a product that achieves these ends, or it simply could mean having a substantial sustainability or social responsibility strategy.
In our initial emails with potential new clients, we ask them directly what their business is doing along these lines. It’s proven to be extremely efficient to weed out bad clients early. Furthermore, the clients who have sustainability efforts and strategies in place respect us because of this requirement.
Moving forward we're looking to formalize our client selection framework even further, eventually publishing it so that other studios like ours can block the creation of products that leave the planet worse off.
Starting a Sustainability Consultancy
In 2020 Sanctuary incubated a brand new consultancy dedicated to sustainability strategy and accounting work. It's called Seaborne and like everything else listed in this report, it's our attempt at giving corporate sustainability some more legitimacy. At Sanctuary we kept running into the problem of potential clients wanting to confront the environmental impact of their products, yet lacking the time or skills to take on this work themselves. With Seaborne we wanted to create a new type of sustainability consultancy that could approach this topic with the same kind of forward thinking that founders brought to the companies we work with. In our first project which was with a past Sanctuary client, The Light Phone, we developed and open sourced a carbon accounting framework for electronic devices. We also thought about the efficacy of carbon offsets and how experimental soil regeneration might be a more effective way for Light users to deal with the carbon embedded in their devices.
Seaborne is always looking for ambitious companies to push forward what's possible with corporate sustainability. If you're interested in talking, shoot us an email at hello@seaborne.nyc.
Our 2021 Goals
We are still living through a pandemic, and we won't have a studio this year either. We are therefore expecting that our 2021 Carbon Footprint will be low as well. As for our sustainability efforts, we will continue to offer our current policies in addition to the following.
We want to grow Seaborne, and continue to select one client a year to do a pro-bono sustainability analysis reporting for. We are currently in the process of one right now!
We are looking to further capture our ethical standards as a studio, and translate these into more formal criteria for selecting clients and pursuing new work.
We want to write more about our donations methodology and how organizations like ours can have impact beyond purchasing offsets.
We continue to offer a 10% rebate to any project in the sustainability space!
Let’s keep chatting!
This is all relative new to us, and we are by no means experts. We’re doing the best we can, and we will continue to be curious and learn as much as we can.
Please feel free to reach out if you’d like to chat more, or if you’d like help doing the same for your company! (isabel@sanctuary.computer & hugh@sanctuary.computer)
Corrections:
We haven’t made any corrections to the article or calculations yet, but if anyone finds misinformation or any miscalculations, please email us, and we’ll edit and list the corrections edits made here.