“I actually see achieving our social impact and achieving our business impact as one in the same and deeply linked,” says Josh Silverman, CEO of Etsy.
Silverman took over as the leader of the artisanal goods e-commerce marketplace in May 2017, two years after the company’s IPO and its rough start to life as a publicly traded company. Etsy dropped its status as a B Corporation that November.
Silverman, who had been CEO of both Skype and Evite, believed that the binary choice being imposed on the company—to have values or focus on shareholder value—was a false one. “If it is framed as you can either be a good citizen or a good business, we’re in a terrible place,” Silverman says. “I don’t believe that to be true. The very notion that being a C Corp hinders you from being a good company—I do not have any evidence in my life experience of that being true. Being publicly traded sharpens our focus and sharpens our accountability. That’s a great thing.”
Early in Silverman’s tenure, he discovered the need to hone the company’s focus regarding its social impact. He asked his employees, “What do you mean by living our values?” “We had a thousand employees and a thousand answers to that,” he says. “If an employee did something that they thought was in the best interest of society, they sort of had rights to do that. We had a thousand people pushing in a thousand directions.”
Silverman decided to concentrate the company’s efforts, much as he did with its operations. “In particular, I asked the team, ‘Where are we uniquely positioned to have influence in the world?’ There are a lot of problems in the world. There’s a million things we could chase. Let’s pick a few and do them with excellence.”
Etsy ultimately selected three ideas for its social impact efforts: economic empowerment, workplace diversity, and environmental sustainability. The first two initiatives are complementary of one other. “Eighty-seven percent of our sellers are women and roughly 80% of our buyers are women. So it makes sense that Etsy lead from the front in gender diversity. And we do. We have a balanced board—50% male, 50% female—as well as an executive team well over 50% female. Even our engineering team is over one third non-male. When you benchmark that to the industry, it’s probably double what the next best tech player of our size is.”
Silverman can’t say for certain how Etsy’s diversity efforts compare to others, because he has taken the extraordinary extra step of publishing his company’s performance against its social-impact goals in Etsy’s annual report filed with the SEC, giving them equal weight to the company’s financials. “We’re one of the first public companies to publish an integrated report,” Silverman says, “where we publish these social metrics. And I think that has sharpened our urgency.” A look at Etsy’s 2018 annual report finds several pages early in the document devoted to “Our Impact Strategy and Progress,” in which the company lays out its three areas of intent, what its goals had been in 2018, the progress it made toward them, and its 2019 goals.
This effort puts Etsy among the vanguard following the Sustainability Accounting Standards Board (SASB), which as Darren Walker of the Ford Foundation notes, “has worked to standardize corporate reporting of material nonfinancial data in areas such as employment, environmental sustainability, and governance.”
In its 2018 annual report, after promising to figure out how to mitigate the effects of its sellers fulfilling their orders—98% of Etsy’s carbon footprint—Silverman considered giving customers the option to pay to offset the cost even though it might slow down or thwart the checkout process. But first he asked that his team price out the expense. When they told him the total, “I pulled out my calculator,” Silverman says, “and said, ‘Wait a minute. That’s less than a penny a package.'” In February, Etsy announced that it’d be the first e-commerce company to offset the climate effects of shipping—and it paid for a day of offsets for all e-commerce on the internet to inspire others to follow suit.
As Silverman says, “If we’re going to focus on [these social-impact goals], we’ve got to measure them. How are we doing on economic empowerment? How are we doing on diversity, and how are we doing on environmental impact? So the whole world can hold us accountable to doing better and better and better. I think that’s more powerful than any other form of good intent.”