Shopify

Shopify's success in attracting larger business customers is an important growth area. As more large businesses seek omnichannel solutions, Shopify's wide range of services will become increasingly attractive to bigger brands.

Sustainability is a founding principle of Shopify. The company has a Head of Sustainability, publishes an annual Climate Report and established a Sustainability Fund in 2019 to house all the company’s environmental investments and initiatives. The company’s social activity highlights the importance to society of commerce and of removing the barriers to entrepreneurship for disadvantaged groups.

Integration of new technologies, a more focused strategy and good cost discipline have all contributed to improved profitability at Shopify. It has an established competitive position and is still maturing. However, we think its true earnings potential only becomes evident as revenue growth continues to expand and cost discipline lead to margin expansion and greater returns to shareholders.  

The company operates as a digital-first business making cybersecurity a material concern. Risks apply to the company’s data, the data of Shopify’s store owners and their customers’.

Incidents could lead to unauthorised access to customer payment information, fraudulent transactions and compromised store operations. 

Technology disruptions causing service 'downtime' could undermine customer trust as well as result in losses on a global basis from a very localised incident. 

Product concerns relate to hardware used alongside Shopify’s online selling platform (e.g. point-of-sale terminals and card readers). The key issues include durability, recyclability, and the disposable nature of these items.

Separately, there are concerns about the sourcing of critical minerals for products (e.g. tap and chip reader), as extraction has been linked to poor or hazardous working conditions and human rights abuses.