Impact Update (Published August 2018) - Etsy Investor Relations
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Impact Update (Published August 2018)
1 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 2
impact
Keeping
Contents Commerce Human
Introduction At the very heart of Etsy is our mission: Keep Consumers today are demanding higher standards
1 Keeping Commerce Human Commerce Human. This mission is rooted in from the businesses they support. We believe that
3 Inside the world of Etsy our belief that, although automation and mass the companies that will continue to be successful
production are parts of modern life, creativity tomorrow are those that care not just about profit,
Positive impact can’t be automated and human connection but about people, communities, and the planet, too.
5 Driving a positive impact can’t be commoditized. This is what makes That’s what Keeping Commerce Human is all about.
7 The story of how we Etsy and our marketplace distinct from mass
create value retailers. We exist as a business in order to Join us on our journey. Although we’re excited
9 Keeping Commerce Human Keep Commerce Human. about the progress we’ve made so far, we know
that there is more work ahead of us. Transparent
Etsy, Inc. Staying true to our mission means thinking of all and regular reporting is a critical step to holding
11 Behind the scenes: Etsy the stakeholders who depend on us, and working ourselves accountable, which is why we’re proud to
people making Etsy work to deliver value to each of them. In 2017, we publish this report—a detailed look at our business
13 Committed to diversity sharpened our focus on our core marketplace and and impacts.
and inclusion brought greater clarity to our impact work. Our
impact strategy is focused on three key pillars As we move forward, we believe that we can—and
Ecosystem that guide our approach to driving positive change should—be both a great business and a great
15 Our ecosystem while nurturing and growing our marketplace: corporate citizen. We like to say that economic
17 A resilient business— empowerment is our day job, so our business
and planet •M
aking creative entrepreneurship a path to model and impact strategy are mutually reinforcing.
19 Our path to 100% economic security and personal empowerment As a socially responsible company, we believe we
renewable electricity by ensuring opportunities for our sellers, making need to hold ourselves to an even higher bar for
20 The bigger picture charitable and in-kind donations, and advancing excellence in execution. There are many counting
public policies that affect our community. on us and the stakes are high. We are emboldened
Sellers by our belief that Etsy can continue to create
21 Etsy sellers: Changing lives •E
nabling equitable access to the opportunities value for all of our stakeholders.
through creativity we create through increasing representation of
23 Forces of imagination underrepresented groups and ensuring equity in
our workforce, building a sustainable supply chain,
Buyers and increasing underrepresented populations
25 Etsy buyers: Bringing within our seller community.
“special” to life
•B
uilding long-term resilience by eliminating
The details our carbon impacts and fostering responsible
Josh Silverman,
27 Transparency Report resource use with specific goals and targets
Chief Executive Officer
29 The Etsy approach in place.
to business
30 About this report You’ll find more information about our impact
strategy on page 5.
Photo by Winnie Au
3 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 4
impact
Inside the world of Etsy
Our tools and services Etsy 2017 marketplace highlights
We offer a range of tools and
Our employees
services that are designed to make GMS Number of active sellers Number of active buyers
As of December 31, 2017,
$3.3B 1.9M* 33.4M*
it easy for creative entrepreneurs
we had 744 employees
to start, manage, and scale their
worldwide, with 452
The Etsy marketplace businesses—from shipping and
employees located in our
In 2017, we connected tracking items to managing
headquarters in Brooklyn,
1.9 million creators with inventory, running ad campaigns
New York. Of those
33.4 million thoughtful and promotions, creating beautiful Percent Mobile GMS Percent International GMS % of active sellers using
employees, 237 were in
51% 33%
consumers in nearly every custom websites, and even Etsy Payments
engineering, 97 in product,
49.9%
country in the world. There bookkeeping and accounting.
161 in member operations,
are more than 50 million items
102 in marketing, and 147
for sale across dozens of retail
in other corporate teams.
categories on Etsy.com. In 2017,
our marketplace generated
*As of December 31, 2017.
$3.3 billion of Gross Merchandise
Sales (GMS), the highest-ever
level for our company.
Etsy 2017 financial highlights
Revenue Gross profit
$441.2M $290.2M
Net income Operating expenses
The markets we serve
Etsy buyers and sellers are
$81.8M $278.3M
located all over the world. Our
six core geographic markets are
the United States, the United Unless otherwise noted, all numbers in this report are for the full year 2017.
Kingdom, Canada, Australia,
France, and Germany. In 2017,
33% of our GMS was generated
between an Etsy seller, Etsy
buyer, or both, located outside
of the United States.
Photo by Morgan Blake
5 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 6
impact
Driving a positive impact
We’ve developed an impact strategy that outlines The Etsy business drives our positive impact
the specific ways we intend to make positive change and our impact initiatives drive our business . For
in the world. It’s based on using our core business to example, helping sellers earn more sales directly
generate positive economic, social, and ecological correlates to growth in our marketplace. Similarly,
value for our community and our stakeholders while there’s a wealth of business research showing
nurturing the Etsy marketplace. the positive relationship between diversity and
Summary of key impact results
innovation and we believe that fostering a more We strive to deliver value to all of our stakeholders, and this report outlines many of the
Each element of this strategy reflects the impact diverse workforce will drive ideation to propel ways we are delivering on that commitment. Below are just a few key highlights.
we want to have on our community and our world our business forward. And reducing a company’s
while advancing and complementing our business carbon footprint can lead to lower operational
strategy. We know that today’s consumers are costs. Aligning our mission, values, and impact Economic Social Ecological
holding businesses to higher standards for good strategy alongside our business strategy is
corporate citizenship. We want to best position critical to growing sustainably and positioning
Etsy to succeed by offering unique solutions that us for continued success. Generated Nurturing a diverse and Powered
$3.3B 30%
are good for people, the planet, and profit. inclusive workforce**
55%
This alignment highlights our commitment
to use the power of our business as a force
for good in the world.
in sales in 2017 for of our global operations with
Our Strategy for Impact
1.9M
of Etsy employees are women. renewable electricity in 2017.
Both our Board of Directors
Economic Social Ecological and Executive Team are at least
50%
active sellers around the world. In 2018, we joined with
Apple, Akamai, and Swiss Re
to enter a power purchase
O U R G OA LS
Make creative Enable equitable access Build long-term resilience agreement to meet our
Paving a pathway to women.
entrepreneurship a path to the opportunities by eliminating our carbon
100%
entrepreneurship and
to economic security and we create. impacts and fostering economic empowerment: Our engineering team is
personal empowerment. responsible resource use.
53%
of sellers first sold their
29%
women.
renewable
electricity goal.
goods on Etsy. This blazes a trail for
We established guidelines
49%
other smaller companies
around hiring and training to
to participate in the
Ensuring the economic Meaningfully increasing Utilizing and sourcing help ensure equity and that
renewable energy market.
W E’R E M A K I N G T H E M H A P P E N BY
opportunities Etsy creates representation of energy responsibly, so our workplace is one where
meaningfully benefits underrepresented we can power our of sellers started their shop people from all backgrounds
a broad swath of our groups to ensure equity operations with 100% to meet a financial challenge. feel welcome.
seller community. in Etsy’s workforce. renewable electricity In 2017, we diverted
by 2020 and reduce the
Fostering economic
security and personal
empowerment for creative
Building a diverse,
equitable, and sustainable
supply chain to support
intensity of our energy
use by 25% by 2025. A ripple effect: Etsy sellers
contributed to
Empowering women
around the globe 87%
87%
of waste from landfill across
$4.7B
entrepreneurs through our operations and bring Developing a plan
charitable and in-kind value to both Etsy and our and setting a goal in our global operations.
contributions. vendors. 2018 to mitigate the
carbon impacts of our of sellers are women
in economic activity in vs. 33% of small business
Advancing public policies Increasing the presence marketplace that aligns *ECONorthwest data to be included in
the U.S. in 2017, according owners in the U.S.***
that increase economic of underrepresented with business growth. to ECONorthwest.* forthcoming Etsy report later in 2018.
security and reduce populations within the
**As of December 31, 2017.
administrative burdens Etsy seller community. Running zero waste
for creative entrepreneurs. operations by 2020. ***According to Kauffman Foundation’s
Photo by Emily Andrews National Entrepreneurial Demographics
Index of 2017.
7 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 8
impact
The story of how
We make it our goal as a business to create value for our
company, our employees, our sellers, our buyers, and our
shareholders—each of which plays a role in Etsy’s future
we create value
success. Our business strategy is focused on creating value
by growing our marketplace in our core geographies and
owning special purchase occasions throughout the year.
We aim to empower our passionate community of
Hint: It involves people. People make Etsy 2 million Etsy sellers to compete and win against
mass retailers by providing a marketplace for unique
possible. We provide a meaningful space commerce to flourish and grow.
for sellers to turn their creative passions
We believe that we can achieve these goals by executing
into opportunity. We enable buyers to on our four key initiatives:
discover unique items made with care.
Improving trust and reliability. We want to ensure that
And we treat our employees and our the Etsy brand delivers a dependable and trustworthy
community with respect. We’re here buying experience and improve conversion.
because we believe that the world needs Enhancing search and discovery. We’re helping buyers
less of the same and more of the special. better navigate the over 50 million items on Etsy.com
to find just the item they are looking for.
Building world-class marketing capabilities. We are
focused on driving traffic to Etsy.com by utilizing our own
marketing efforts and the efforts of our sellers, primarily
through digital acquisition marketing, search engine
optimization (SEO), social channels, and email.
Providing best-in-class services and tools. We plan
to continue to invest in free tools and paid services to
help Etsy sellers start, manage, and scale their businesses.
Photo by Emily Andrews Photo by Stacy Keck
9 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 10
impact
Keeping
Commerce
Human o sy
s tem
c
Our day job is economic empowerment— u rE
n it y
O
providing a marketplace that allows creative
entrepreneurs to start, manage, and scale mu
m
their businesses. This is how Etsy creates Co Our ecosystem
r
value and empowers people every day.
Ou
An environment that supports
e ss and nurtures creative
u s in Buyers entrepreneurship.
Discover a universe
rB
of products that
Ou
help them express
Our ecosystem themselves
Includes a set of external and support
factors that support our independent
success, such as: a strong Sellers Our community
creative businesses.
e-commerce foundation; access Turn their creativity Empowered people who
to clean, renewable energy; into thriving come together to Keep
laws that allow creativity and businesses by Etsy, Inc. Commerce Human.
entrepreneurship to thrive; and connecting with Continuously invests
a healthy natural environment. a global community in our people, and
of buyers. the platform, to grow
a vibrant creative
marketplace.
Our business
Our community
Delivers more joyful moments to
Is filled with not only our buyers,
buyers, empowers more creative
sellers, and employees, but all
entrepreneurs to build successful
of those who make it possible
businesses, and fosters the talents
for us to live our mission.
and careers of Etsy employees.
When everything is working together
Our business the way we envision, we get financially
Is a trusted marketplace where empowered sellers, delighted buyers,
sellers can grow and pursue their
creative businesses and buyers a strong and vibrant team of employees,
can find unique and special and a healthy planet—all contributing
items. This is all supported by our
passionate team at Etsy. in their own unique way to fulfilling
the Etsy mission.
Photo by Ula Koska
11 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 12
impact
Behind the scenes:
Etsy, Inc.
Continuously invests
in our people, and the
Etsy people making
platform, to grow a vibrant
creative marketplace.
Etsy work
Etsy has an action-oriented, values-based, purpose-
driven work culture. We are a company where diverse
and skilled people deliver innovative ideas to strengthen
the buyer and seller experience. A company that strives
to embody the ideas of sustainability and responsibility,
with an impact that reaches beyond our own business.
Building something that matters Each year, Etsy conducts an internal survey Creating hiring practices that help ensure Providing diversity and inclusion training To help advance our Diversity
Building the Etsy platform means tackling some to measure employee engagement. Employee equity and mitigate potential bias that hits the mark & Inclusion goals, we actively
of the most interesting and complex challenges in engagement is linked to high performance, We have put specific processes in place to help We have established a regular cadence of participate in partnerships
e-commerce through human-centered design retention, innovation, and growth and it’s defined ensure that job applicants are all evaluated for the diversity and inclusion training to help ensure such as BlackTech Week,
and engineering. It’s a simple idea, but one that as the level of commitment, motivation, and same skills keyed to a particular role. For example, that Etsy is the kind of place where candidates a global platform for black
requires a companywide effort to make happen. connection employees feel at Etsy. In 2017, 86% in 2018, we implemented hiring rubrics to guide from all backgrounds can feel at home. We also women and men in technology,
of employees worldwide responded to the survey. interviewers to ask the questions that directly have provided managers with in-person, highly and Out in Tech, which unites
Developing Etsy employees Our overall engagement score was 60% favorable. relate to job skills, and to predetermine what interactive anti-discrimination and anti-harassment the LGBTQ+ tech community.
We want our employees to thrive at work. We take these surveys seriously because the excellent answers should sound like. Research training because we know that handling these
To support our employees’ development needs, feedback helps us better understand the current demonstrates that when interviewers preselect issues well is one of the core tenets of a quality
our Learning and Development team offers trainings, employee experience and provides insight on areas the kinds of answers they want to hear, they are workforce diversity program.
programs, retreats, coaching, and online resources of strength and areas of improvement. We have less likely to favor candidates who share their
on everything from how to invigorate a sluggish used the results to guide the development of more personality and/or background, and more likely Communicating the inclusive culture at Etsy
meeting to how to give constructive feedback. dynamic programs that build knowledge and skills to evaluate candidates according to the stated We are proud of the diversity in our leadership.
and build connectedness between employees. job criteria. We created these hiring guidelines to More than 50% of our Executive Team is women
We’re building a culture of continuous self- ensure that all candidates are evaluated fairly and and half of our Board of Directors is also women.
development, where employees can give and All of this contributes to a skilled and engaged with objective criteria, and we provided training
receive constructive feedback that’s timely, useful, workforce that brings Etsy’s mission to life. on this to our hiring managers. We promote and resource our employee
and actionable. And we’re creating structure resource groups (“ERGs”), highlight key event
around hiring, feedback, and recognition processes A commitment to diversity and inclusion Continuing to mitigate potential bias in months (e.g., Black History Month, Pride Month)
to mitigate potential biases and ensure that all At our core, we believe that diversity of evaluation, promotion, and compensation and new partnerships, broadcast upcoming
employees have fair opportunities for advancement backgrounds, thoughts, and experience brings out We know that creating and maintaining a diverse diversity-related happenings, select special Etsy
and success. We also provide healthy and the best in all of us. In October 2017, we announced workforce is not just about hiring—retention and shops in accordance with diversity-related events,
sustainable environments, programs, and services a diversity impact goal to “meaningfully increase fairness in all employee processes are critical to and give our ERG leaders time and space in front
to help our employees do their best work. representation of underrepresented groups and ensuring that employees from all backgrounds of the entire Etsy community to share their group’s
ensure equity in Etsy’s workforce.” To advance want to stay and grow here. We have implemented mission and focus. Our ERGs include our Asian
our goal, we are focused on recruiting, retention, a more formal companywide performance Resource Community, Black Resource and Identity
training, and building an inclusive culture. management process to support consistent Group at Etsy, Jewish People at Etsy, Hispanic
and fair evaluations. We also periodically review Latinx Network, Parents ERG, Queer@Etsy, and
employee compensation to help ensure it is fair Women and NonBinary People in Tech. We also
and free from potential bias. remain open to the creation of new ERGs
if employees want additional groups.
Photo by Emily Andrews
13 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 14
impact
Committed
At Etsy, we’re committed to gender balance We’re creating a diverse and inclusive workplace
Overall gender (Global) (%) Tech roles by gender (Global) (%)**** Overall race and ethnicity (U.S. only) Tech roles by race and ethnicity (U.S. only)****
to diversity 2017*
2016**
2017*
2016**
2017*
2016**
2017*
2016**
and inclusion
Our values Women
2016 2017
55.9% 55.4% Women
2016 2017
30.4% 35.7% A
merican Indian or Alaskan Native
2016 2017
0.0% 0.2% A
merican Indian or Alaskan Native
2016 2017
0.0% 0.0%
Men 43.4% 43.8% Men 67.7% 62.6% A
sian 13.2% 13.8% A
sian 18.0% 20.6%
We want to support and enable parents, Other awesome gender identities 0.8% 0.7% Other awesome gender identities 1.8% 1.4% B
lack or African American 3.9% 4.4% B
lack or African American 3.2% 3.3%
Not declared 0.0% 0.1% Not declared 0.0% 0.3% H
ispanic 4.1% 4.1% H
ispanic 4.4% 4.5%
regardless of their gender, to play equal O
ther 0.5% 1.1% O
ther 0.5% 1.8%
roles in building successful companies T
wo or more races 3.5% 2.7% T
wo or more races 4.2% 2.1%
W
hite 73.9% 71.8% W
hite 68.4% 65.7%
and nurturing their families. In 2016, we N
ot declared 1.1% 2% N
ot declared 1.2% 2.1%
introduced a 26-week gender-blind parental
leave policy that is available to all Etsy
employees globally. Leadership roles by gender (Global) (%)*** Engineering roles by gender (Global) (%) Leadership race and ethnicity (U.S. only)*** Engineering roles by race and ethnicity
(U.S. only)
2017* 2017* 2017* 2017*
2016** 2016** 2016** 2016**
2016 2017 2016 2017 2016 2017 2016 2017
Women 48.9% 46.4% Women 24.5% 29.3% A
merican Indian or Alaskan Native 0.0% 0.0% A
merican Indian or Alaskan Native 0.0% 0.0%
Men 51.1% 53.6% Men 73.1% 68.7% A
sian 11.4% 16.9% A
sian 17.7% 20.4%
Other awesome gender identities 0.0% 0.0% Other awesome gender identities 2.4% 1.6% B
lack or African American 2.5% 3.4% B
lack or African American 3.3% 4.2%
Not declared 0.0% 0.0% Not declared 0.0% 0.4% H
ispanic 1.3% 1.7% H
ispanic 3.9% 4.2%
O
ther 0.0% 0.0% O
ther 0.7% 2.5%
T
wo or more races 5.1% 5.1% T
wo or more races 4.6% 2.1%
W
hite 78.5% 72.9% W
hite 68.9% 65.0%
N
ot declared 1.3% 0.0% N
ot declared 1.0% 1.7%
Other business roles by race and ethnicity
*As of December 31, 2017. Other business roles by gender (Global) (%)
**As of December 31, 2016. (U.S. only)
***Leadership roles defined as director level and 2017*
above positions. 2017*
****We review our methodology periodically to 2016**
ensure data integrity and to reflect the changing 2016**
nature of our organization. Our jobs at Etsy grow
and evolve with the business, and sometimes they
require a new designation. In our 2017 10-K, filed
with the U.S. Securities Exchange Commission on
March 1, 2018, we reported that 38% of product,
engineering, and technical operations employees
were women. Since that report, we have adjusted
the categorizations to exclude some brand,
marketing, and product positions from what we
define as technical roles. We’ve also added several 2016 2017
new functions, including machine learning and data 2016 2017 A
merican Indian or Alaskan Native 0.0% 0.3%
science, to this categorization. A
sian 9.0% 7.0%
Women 74.5% 72.5%
Men 25.5% 27.5% B
lack or African American 4.5% 5.4%
Other awesome gender identities 0.0% 0.0% H
ispanic 3.6% 3.8%
Not declared 0.0% 0.0% O
ther 0.5% 0.3%
T
wo or more races 2.9% 3.5%
W
hite 78.6% 78.2%
N
ot declared 0.9% 1.6%
15 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 16
impact
Making seller voices heard
Our community proved that
Etsy sellers are a constituency
lawmakers should care about
by organizing digital petitions,
letter-writing campaigns,
Our ecosystem
public comments, and phone
Our ecosystem
calls to U.S. Congress:
Includes a set of external
factors that support our
Nearly
success, such as: a strong
e-commerce foundation;
access to clean, renewable
energy; laws that allow creativity
A key element of Etsy’s business is the ecosystem within
which we operate and the foundation that enables 6,000
and entrepreneurship to our operations, our platform, and our customers’ ability Etsy sellers across the EU signed
a letter to their finance ministers
thrive; and a healthy
natural environment. to connect, make, buy, sell, and ship globally. Taking a stand for the Etsy community
In order to run a successful business, we
rely on strong technological infrastructure,
Access to clean, renewable energy. It takes
energy to power our website and our apps, and we
We support policy solutions that help grow the
creative economy, and we believe in taking a stand
And because policymaking doesn’t only happen
in Capitol buildings, we also hosted policymakers
3,000
entrepreneurship-friendly laws, and a healthy take seriously our responsibility to use this energy for what helps Etsy and the Etsy community flourish. in the towns where sellers live and work. Australian sellers wrote
natural environment. And we take our role within efficiently. Our focus on using renewable energy Individually, Etsy sellers’ businesses may be small, to their Senate
this ecosystem seriously, aiming to be a good reduces our carbon impact, and contributes to but together they represent significant economic •E
levating Etsy sellers in the public debate.
33,030
neighbor, as well as a fierce advocate for a more resilient grid. The solar-paneled roof of impact and opportunity. Yet policymakers often We publish research and thought leadership
positive, lasting change, and whenever possible, our Brooklyn headquarters is visible proof of our overlook the Etsy community when considering new on relevant topics and often testify before
to mitigate our negative impacts. commitment to responsible energy usage. laws, and fail to understand the common challenges congressional committees and panels in our core
they face—from managing complicated tax laws markets. We also submit public comments that U.S. Etsy sellers submitted
Etsy exists in an evolving world. Here are some Laws that allow creativity and entrepreneurship to the pains of international shipping. Leaders in make the microbusiness case for reducing trade public comments to the Federal
of the key external elements that play a role to thrive. We proactively engage our community government can help ease these barriers, but we barriers, and combating onerous administrative Communications Commission
in our business operations and growth: in crafting policy and regulatory solutions that need to educate them about Etsy sellers’ unique burdens that stymie entrepreneurship.
enable Etsy sellers to run successful businesses. experiences and needs. By coming together and
15,000
A strong e-commerce foundation. This includes Individually, Etsy sellers may have limited advocating alongside Etsy sellers, we can enable
access to the internet, network, and mobile influence, but together, they are a powerful force. creative entrepreneurs around the world to thrive.
infrastructure. That’s why we advocate alongside our sellers for
change where we believe it’s needed, and educate Crafting support for policies that matter Etsy sellers sent more than
policymakers at all levels of government about the From in-person meetings to online organizing, 50,000 messages to Congress
Etsy community. We do this not only to enhance and telling their stories in local newspapers, Etsy about protecting net neutrality
Etsy’s ability to operate—and our sellers’ ability sellers continue to prove that when they speak up,
to run their businesses—but also to help build policymakers listen. We’re so grateful to be able to Nearly
70,000
creative economies and leave a positive, lasting stand side by side with our community of creative
impact on the world. entrepreneurs crafting support for important issues.
Our work includes:
A healthy natural environment. Our sellers rely on Etsy sellers took action in
materials like textiles, wood, and metals to create •A
dvocating alongside our sellers for rules that key markets on issues
the special and unique items that they list on Etsy. protect the open internet and reduce barriers to through various campaigns
Our policies prohibit our community from selling trade. We believe that strong, enforceable rules
endangered or threatened animal species on Etsy. that protect access to the internet, network, and Etsy and Etsy sellers
mobile infrastructure strengthen our ecosystem. participated in
This ecosystem allows our company not just to Over the years, we have been fighting for strong,
survive, but to thrive. We are committed to doing
our part by investing in strategic initiatives that
keep our ecosystem strong, safe, and resilient so
enforceable neutrality rules in regulatory agencies,
in the courts, and in Congress. 36
that we can continue to grow as a business and •G
etting face time with decision makers. public forums,
fulfill our mission to Keep Commerce Human. In 2017, Etsy sellers met in person with hearings, and conferences,
policymakers across the globe to discuss the including before the
issues that impact their microbusinesses, and the United Nations, the World
changes they’d like to see. We organized seller Trade Organization, the
trips to Washington, D.C., and several European European Commission, the
cities, including Paris, Geneva, London, and Berlin. UK Parliament, U.S. Congress,
and Australian Senate
Photo by Emily Andrews Photo by Emily Andrews
17 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 18
impact
A resilient business—
and planet
Reducing our impact on the planet Energy efficiency Carbon Zero waste Water
At Etsy, we recognize that Here are some of the ways we’re working We’ve committed to reducing the Marketplace shipping represents We have made an aggressive Water remains a small portion of our
we run our business within to shrink our ecological footprint. intensity of our energy use by the lion’s share of our carbon commitment to run zero waste footprint. In leased office and data
25% by 2025, in our offices and emissions. In 2018, we’re developing operations by 2020, which we center spaces, our water usage is often
a complex global system. Energy our computing infrastructure. In a plan and setting a goal to define as diverting a minimum of hard to manage and track. However,
We rely on energy to run our Renewable energy 2017, we achieved a 3% reduction reduce the carbon impacts of 90% of our outgoing waste from we’ve implemented ways to track our
We’ve committed to powering our in office energy intensity, in our marketplace that aligns with landfill or incineration. Our waste water use across our core sites and
operations, and many of our operations with 100% renewable kWh per square foot, based on business growth. reduction efforts create operational continue to add water management
sellers depend on an abundant electricity by 2020. In 2017, a 2016 baseline. efficiencies, reduce our carbon technology where it makes sense.
we procured 30% of energy from Carbon emissions by Scope emissions, and connect employees
supply of materials to produce renewable sources across Energy consumption (MWh) (tCO2e)
to our sustainability efforts every Water consumption, supply
and wastewater treatment (m3)
their unique and special items. global operations.
2017† 2017
day. In 2017, we diverted 87% of our
2016
waste from landfill or incineration, 2017 4,122
2016‡
% renewable electricity
2015
through our recycling, compost, 2016 8,531
In the face of a changing climate, we need 2015
and donation programs. 2015 2,626
to be proactive in how we manage our 2017 30% 2015 2016 2017
Scope 1 172 410‡ 467†
resources. Etsy is committed to being a 2016 4% 2015 2016 2017
Waste by destination
Offices 2,160 4,524 4,042 Scope 2 – location 2,340 3,076‡ 3,152†
(metric tonnes) Responsible sourcing
good environmental steward, and that’s why 2015 1%
Data centers 5,140 6,155 7,111 Scope 2 – market N/A 2,946‡ 2,209†
Scope 3 90,196 105,295 119,444 Many of our impacts are embedded
one of our key impact goals is to build long-
2017 within our supply chain. In 2017, we
term resilience by eliminating our carbon
Scope 3 carbon emissions by activity 2016 launched a vendor assessment tool
impacts and fostering responsible resource source (tCO2e)
In 2017, we announced a multi- 2015 to better understand the economic,
use. We readily acknowledge that we’re
year move to Google Cloud social, and ecological impacts of
not there yet, but we know it’s important to 2017
Platform (GCP), transitioning away 2015 2016 2017 our partners. In 2018, our goal is to
account for and be transparent about both 2016
from operating our own data
andfilled or incinerated
L 6.0 9.5 5.8
have 15% of all new vendors take the
our negative and positive impacts. 2015 waste
center infrastructure. Google’s Aggregate recycling 10.7 20.8 18.3 assessment, and to use the survey
Compost 7.5 12.8 17.3
commitment to sustainability E-waste 0.4 4.4 1.5 results to inform decision-making for
2015 2016 2017
is one of the reasons why we ir travel
A 804 967‡ 550†
Donations N/A 13.8 0.3 all of our largest purchases.
Commuting 428 597 663
selected them as our partner. Their Shipping 88,925 103,646‡ 118,153†
Diversion rate
highly efficient data centers will Waste 5 18 7
(%, global offices) †Etsy commissioned PricewaterhouseCoopers LLP
Water 3 9 4
help us save significant energy. Electricity, transmission 1 9 3
(PwC) to provide third-party assurance of our energy
and carbon data for the period from January 1, 2017 to
Moving to flexible cloud-based and distribution losses 2017 87% December 31, 2017. For full details and data methodology,
Remote workers 30 49 64
see PwC’s Report of Independent Accountants.
infrastructure also allows us to 2016 84%
‡Metrics in the report for which historical data has also
reduce major idle time and thus 2015 76% been subject to previous review procedures.
To mitigate our carbon impact,
energy consumption.
we invested in carbon offsets
Per capita waste to landfill or
equivalent to our 2017 Scope 1, 2,
incineration (kg)
and 3 measured emissions, with the
exception of marketplace shipping. 2017 6.3
Each carbon offset represents 2016 8.0
the removal or avoidance of one 2015 8.5
metric ton of carbon dioxide from
the atmosphere.19 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 20
impact
Our path The bigger
to 100% picture
renewable At Etsy, our business model stems from a deeply
electricity
held belief in the power of business for good.
This is one of the things that draws people to
Etsy—the excitement that comes from finding
solutions that benefit both business and society.
In August 2018, Etsy announced that we are joining We believe there’s a better way to do commerce.
Apple, Akamai, and Swiss Re to procure power from Commerce that builds connections between
two new solar and wind energy farms. This virtual people and contributes to local economies.
power purchase agreement will allow us to drive Commerce that has a positive social and
a larger, more positive environmental impact than environmental impact, so you can feel good
we would have achieved individually. This unique about your purchases. Commerce that
collaboration allows us to take action similar to a creates harmony.
company with a much larger electricity footprint.
Commerce that is human.
Etsy will be sourcing 4.5 megawatts from a solar Our ambitions are high, and getting there won’t
energy project outside Fredericksburg, Virginia, be easy. But as a mission-driven company, we are
which is expected to come online in December holding ourselves to a high bar when it comes
2019. Once operational, this project is intended to execution. We owe it to all of our stakeholders,
to fulfill our ambitious goal of powering our and to the world around us.
operations with 100% renewable electricity.
We plan to use the renewable energy from this
agreement to help power our operations and
computing infrastructure, furthering our goals
Lending our voice on ecological
of creating a cleaner internet and reducing issues that matter
our impact on the planet.
Etsy is a proud signatory of We Are Still In, a group
“This agreement will help Etsy of more than 2,000 organizations that stand by
the Paris Climate Agreement and are committed to
to meet our goal of powering meeting its goals. We also believe that renewable
operations with 100% renewable energy is good for business and the environment,
so we’re happy to lend our voice to support and
electricity while also innovating protect renewable energy policy and infrastructure
by paving the way for small in the regions where we operate.
companies to participate in the We strive to evolve our Etsy.com policies to
renewable energy market.” address emerging issues that have an impact
on the health of our planet. For example, we’ve
Rachel Glaser, Etsy Chief Financial Officer worked with experts in wildlife conservation,
such as the International Fund for Animal Welfare
(IFAW) and World Wildlife Fund (WWF), to develop
strong policies against the sale of endangered
or threatened animal species. Etsy is a founding
partner of the Global Coalition to End Wildlife
Trafficking Online, an organization of tech
companies and wildlife conservation organizations
working together to reduce online wildlife
trafficking by 80% by 2020.21 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 22
impact
Etsy sellers: Changing lives
Etsy sellers
Turn their creativity into
thriving businesses by
through creativity
connecting with a global
community of buyers.
Etsy sellers are at the very heart We are committed to helping Etsy sellers transform
their creative passions into personal fulfillment,
of our business. Powered by economic opportunity, and empowerment.
imagination, 2 million sellers use the
We serve creators around the world who pursue
Etsy platform to pursue their crafts their passions, offering them a global base of
millions of buyers and a cohesive suite of services
and grow their businesses. They are and tools. Etsy sellers range from hobbyists to
the creative force that captivates professional artisans, and have a broad range
of personal and professional goals.
buyers and keeps us moving forward.
Mother’s Etsy shop saves family from eviction
In the summer of 2015, Krystal Shaw and her and down. My daughter was like, ‘Oh, we’re dancing!’
husband, Michael, received some terrible news: If And I said, ‘Yeah, we’re dancing!’”
Quit your day job: they couldn’t pay the rent on their Houston, Texas,
apartment within two weeks, they would be evicted. Today, business is booming for Random Rompers.
MOSTLIKELY’s Etsy shop Krystal had quit her day job as a receptionist to Krystal’s husband, Michael, found a higher-paying
care for her newborn son, since they couldn’t afford full-time job, but her Etsy shop is the Shaws’ primary
Before MOSTLIKELY’s geometric paper lampshades daycare. She switched to working as a freelance source of income.
became bestsellers, they were rejects. A theater seamstress, but her sewing money wasn’t enough
had hired Wolfgang List and Maik Perfahl, to supplement her husband’s salary as a welder, and “I don’t even know how to describe it,” says Krystal,
members of an architecture collective in Vienna, they were behind on their bills. “It was sheer panic,” when asked what it was like to pay bills with money
Austria, to make a donkey mask for a play. But remembers Krystal, “trying to figure out what you’re from her Etsy shop. “It’s an extremely satisfying
the client wasn’t happy with their design, so the going to do to keep your family off the streets.” feeling. I’m doing something I love and was actually
mask sat untouched in their office for months. able to save my family. When I gave them that money
That’s when she had an idea: Why not try selling to stop the eviction process, that was amazing.”
One day, Wolfgang got a bright idea: If he the baby rompers she made on Etsy?
poked a hole and inserted a light bulb, Krystal says that supporting her family with her
he could transform the mask into a lampshade. “I was excited and nervous, but I really had no clue craft makes her feel “like superwoman,” adding that
His abandoned project led to his true what I was doing,” she recalls. Her mother had gifted there aren’t many people who get to say they do
calling as an entrepreneur. her some fabrics and she already had a sewing what they love every single day. “Not to mention
machine and thread, so she created as many rompers I get to do it in pajamas,” she laughs. “Thanks to the
Wolfgang and Maik opened their Etsy shop as she could and listed them on Etsy. Random shop, we were able to put presents under the tree
MOSTLIKELY in the summer of 2012, gradually Rompers was open for business. To her surprise, and have our first real Christmas. I was so thankful.
investing more and more time in it, and perfecting Krystal started making sales almost immediately. She Thankful is the best way to put it.”
their use of 3D printing. Later that year, a popular was able to start paying the bills and save her family
paper product blog featured MOSTLIKELY—and the from eviction. About five months later, her shop was Check out Krystal’s rompers at Random Rompers.
shop received more than 100 orders in one week. generating enough income to support the family.
The following year, Wolfgang left his position “I still remember that moment when I made my first
at the architecture firm and made the Etsy sale. Oh, my God, it was so cool. I didn’t know the
shop his full-time job. While Maik remained at app made that ‘cha-ching’ sound. I was sitting at my
the firm, he still works with Wolfgang to design desk and I was sewing things and my phone started
products, take product photos, and handle ‘cha-ching’-ing. I actually jumped and almost cut my
production partnerships. To date, MOSTLIKELY’s fabric! I said, ‘What was that?! Oh, my God, I sold a
Etsy shop has had nearly 1,300 sales. romper!’ Everyone was getting up and jumping up
Photo by Saskia Stolzlechner
Photos by Ana Lavalle23 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 24
impact
Forces of imagination
Protecting the integrity The Etsy Fund at CERF+. In early 2018, Etsy Craft Entrepreneurship Program.
Etsy sellers at a glance we partnered with CERF+, a nonprofit This program seeks to expand access
For of our marketplace organization focused on helping artists to microbusiness education for
2M
active Etsy sellers
97%
run their shops from
28%
of sellers live in rural areas
49%
of Etsy sellers, a financial
60%
of Etsy sellers sell on
Our community relies on us to make Etsy a
trustworthy place to shop and do business.
One way we do this is through clear policies
prepare for and recover from emergencies
and disasters, to launch a disaster relief
fund for Etsy sellers. U.S.-based Etsy sellers
underrepresented creative entrepreneurs.
By empowering organizations to use
our curriculum, we create pathways for
impacted by disasters can apply for grants entrepreneurship within the Etsy platform.
their homes challenge contributed multiple channels, for our community: Our House Rules. We
to help get their businesses back on track. The Craft Entrepreneurship curriculum
to their decision to start including in-person, write policies in plain English (and supported
Click here to learn more. is a hands-on educational toolkit that
a creative business online, and through retail. languages) so everyone in our community
helps makers use their existing craft
On average, sellers earn can easily understand their rights and
Etsy Maker Cities. Etsy’s Maker Cities skills to learn how to start, manage, and
87% 80% 53% 87%
the highest share of responsibilities. We believe in consistently
their sales through Etsy program supports local creative communities grow a microbusiness. In partnership
enforcing our policies to protect our
by investing in innovative projects aimed with organizations that value creative
community. We hold ourselves accountable
at helping marginalized groups participate entrepreneurship, we are working to help
of Etsy sellers are women. are businesses of one of sellers first sold their believe it’s important to
to this by transparently reporting on how
in the creative economy. cities realize the vision of an inclusive,
By comparison, 33% of goods on Etsy run an environmentally we address policy enforcement.
thriving Etsy marketplace.
small business owners in responsible business See pages 27–28 for more details.
Our 2017 grantees were Open Works,
the U.S. are women.*
Baltimore, Maryland; and The Berlin Kreativ
Diversity in the marketplace Kollektive, Berlin, Germany. We’re excited “Much of the class is learning the
All percentages are from our 2018 Seller Census, which will be published later in 2018. to follow these grantees as they bring their basics of navigating and utilizing
At Etsy, we want to provide equitable Etsy, but I’ve seen that my students
plans to life, and look forward to developing
*According to Kauffman Foundation’s National Entrepreneurial Demographics Index of 2017. access to the opportunities of creative mostly just need someone to believe
new ways for local city leaders and the
entrepreneurship by growing a skilled in them. I can relate, because it took
Etsy community to connect and thrive.
and diverse seller community. That’s why me three years to actually list and
our impact strategy includes a focus on sell anything on Etsy. I, like them,
Creating value •E
tsy Success: Etsy produces newsletters • Etsy Made Local is a community-led initiative
increasing underrepresented populations
“I can’t stress enough how much it was nervous that I wouldn’t do a
and podcasts offering sellers business for crafters, collectors, and artisans to gather
within the Etsy seller community. good enough job or that no one
When sellers pursue their crafts and grow advice and inspiration. in their local communities and host unique matters to the maker community here
their businesses—whether by launching new selling events. Etsy Made Local events bring in Berlin to know that organizations would want what I made. Etsy Craft
We recently kicked off research to learn like Etsy see their potential and are Entrepreneurship Program
product lines or exploring new mediums— Creating meaningful connections together members of the maker community,
more about barriers to engagement among willing to invest in them. There are an is the perfect place to gain
that growth creates value for the whole Etsy among the maker community: as well as customers eager to explore—in
underrepresented populations. We expect abundance of third-party platforms confidence and grow.”
community. It starts with sellers expanding • Forums: Etsy Forums are virtual meeting person—the variety of handmade, craft,
that the results of this research will challenge that claim to be supportive of maker
their capabilities and transforming their rooms where sellers and buyers can and vintage goods available on Etsy.com.
us to actively address barriers, reveal new communities, but Etsy stands out Craft Entrepreneurship Teacher, Alaina Smith
creative passions into fulfillment, economic gather to share their Etsy experiences, Now in its fifth year as a global program
opportunities, and encourage us to strive in its willingness to give back to the from ColdGold in Knoxville, Tennessee.
opportunity, and empowerment. Each ask for advice, and engage in friendly for Etsy, Etsy Made Local takes place in the
toward a community and a user experience community, and to help see it grow.” Read more of Alaina’s story here.
time they sell a product to an Etsy buyer, conversations. United States, the United Kingdom, Canada,
that are inviting and inclusive for all.
they’re also creating buyer trust, loyalty, and Australia, France, Germany, Italy, and the
retention—and the shared experience of Emma Wood, Berlin, Germany
• Teams: Etsy Teams are self-organized groups Netherlands. In 2017, more than 130 events Employee Donation Matching Program.
human commerce is another form of value. that enable sellers to meet people, kick-start took place, with about 900,000 people Furthering the Etsy Etsy employees are able to submit qualifying
their business, learn more about Etsy, visiting an Etsy Made Local event.
mission through social charitable contributions to be matched by
Supporting Etsy sellers exchange knowledge, organize in-person Etsy. In 2017, Etsy matched donations
events, and much more. Joining a team is an •C
aptain Summits provide an opportunity impact initiatives to 140 organizations, helping to support
In addition to nurturing and driving sales excellent way for sellers to create meaningful to gather Etsy Team leaders and Etsy meaningful causes around the world.
in our marketplace, there are a number of Etsy makes charitable and in-kind
connections with other members. employees to discuss recent learnings and
additional ways we support Etsy sellers: contributions, drives initiatives that enable
develop fresh and innovative ideas. The Good Neighbor Fund. In addition
creative entrepreneurship, and supports Etsy
Bringing people together to celebrate to bolstering creative entrepreneurship,
sellers on their paths to economic security
Teaching sellers valuable skills to help them craftsmanship and creative entrepreneurship: Etsy reserves a portion of our philanthropic
and personal empowerment—all with a focus
start, manage, and scale their businesses: We love bringing people together to celebrate budget to support the local communities
on supporting local creative economies.
• Etsy Seller Handbook: Sellers turn to this craftsmanship and creative entrepreneurship in which we operate. Our Good Neighbor
handy guide to learn the Etsy ropes and through various events that prompt Etsy Fund supports community events and
hone their business skills. Sellers can learn sellers to get out of their studios or workshops partnerships in Brooklyn and Hudson,
how to shoot the best product photos, and into the community to share experiences New York; Dublin, Ireland; San Francisco,
manage inventory, and even the ins and outs with other makers. For example: California; and London, England.
of branding and marketing.25 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 26
impact
Etsy buyers:
Etsy buyers
Discover a universe of
products that help them
Bringing “special” to life
express themselves and
support independent
creative businesses.
As the world continues to become more automated and commoditized,
Etsy truly stands out within a sea of sameness. Buyers come to our
marketplace to be inspired and delighted by the more than 50 million
items lovingly crafted or curated by real people. In fact, 91% of buyers
say they come to Etsy for items they can’t find anywhere else.*
On our platform, Etsy buyers enjoy a personalized include shopping that reflects an individual’s
shopping experience and can build relationships unique style; gifting that demonstrates thought
through direct interactions and conversations and care; and celebrations that express creativity
with Etsy sellers. By shopping on Etsy, they help and fun. They happen throughout the year when
sellers around the world turn their passions into a buyer is decorating a home, dressing for an
fulfilling and empowering businesses. event, celebrating a special moment, or buying
a gift for someone special.
We believe there are many moments in life that
call for something a little less ordinary, and a lot
more special. Our goal is to encourage existing
and potential buyers to visit the Etsy marketplace
on “special” purchase occasions throughout
the year. These special purchase occasions
For those moments when you’re looking for something special
Photo by Nina Duncan Photo by Paolo Azarraga Photo by Paolo Azarraga
Gifting Celebrations Style
Photo by Natalie McComas
*According to a 2016 survey of Etsy.com buyers.27 Introduction Positive Etsy, Inc. Ecosystem Sellers Buyers The details Impact Update 28
impact
Transparency
Report
At Etsy, it’s important not just for us to have the right policies in
place but to enforce them appropriately. Each year, we release
our Transparency Report to demonstrate our commitment to
transparency. Our fourth annual Transparency Report details how
we handled allegations of intellectual property infringement,
content that doesn’t meet our policies, transactional disputes
between members, and requests for member information in 2017.
Intellectual property Copyright Act (DMCA) counter Policy enforcement In total, Etsy’s policy Resolving member disputes Cases, by region we received. In connection with Etsy disclosed member account,
takedowns By using our service, notices from members opposing All Etsy shops must follow our enforcement teams closed a If an order is not delivered these requests, we disclosed transaction, or listing information
Etsy sellers represent that they copyright claims. Seller Policy, which outlines total of 316,801 accounts for or the item received is not as member information on 76 in other limited circumstances
have all the necessary rights in what is eligible to be sold on non-intellectual property-related described in the product listing, accounts. The number of formal as permitted under our Privacy
the content of their Etsy shop. Intellectual property takedowns the site. Etsy’s Trust and Safety policy violations in 2017. we ask that the seller and legal process requests increased Policy. This allows the release
Takedown notices include trademark,
Etsy’s Intellectual Property Policy copyright, and patent infringement.
team enforces that policy, buyer work together to reach about 20% from 2016. We of information when we believe
says we will immediately remove reviewing and removing items Shop and listings flags, by source an amicable resolution. While also received 729 requests in good faith that disclosure is
any allegedly infringing material and member accounts due to Etsy is not directly involved in from members outside of necessary to comply with the law,
and communicate about our violations. The violations may a transaction between buyers North America to delete their prevent imminent physical harm
actions to our members and range from reselling commercial and sellers, we provide a Case account information. or financial loss, or investigate,
third parties. Our Legal Response items to listing prohibited items System for members to work 2017 prevent, or take action regarding
and Enforcement team reviews to repeatedly providing poor together to resolve disputes with Americas 70% 236,025 Requests by type illegal activities, suspected
EMEA 22% 75,233
allegations and notices of customer service. The team the assistance of Etsy’s Dispute Asia Pacific 8% 28,411 fraud, threats to our property, or
infringement under our policies. employs a combination of Resolution team. violations of Etsy’s Terms of Use.
automated systems, community In particular, we responded to
In 2017, Etsy executed 19,255 flags, and proactive review by In 2017, about 339,670 (0.3%) Requests for member requests from law enforcement
properly submitted takedown 2017 specialized Etsy employees to 2017
of orders placed in 2017 resulted information about specific transactions and
Trademark 51% 9,852
notices, removing or disabling Copyright 46% 8,860
monitor and protect the integrity Community 50% 197,665 in a case, consistent with 2016. Our Privacy Policy explains how accounts related to potentially
Etsy 50% 196,889
access to 299,998 listings, from Patent 2% 335 of the market. 322,096 (0.9%) of buyers with we handle member information fraudulent activity. We also
Other 1% 208
66,764 sellers. We closed 4,494 a purchase in 2017 filed a case. and the importance we place cooperated with requests from
shops for repeat infringement. In 2017, Etsy received 394,564 10.5% of sellers who made at on transparency. Legal process the United States Department of
Takedowns, by regions Accounts reviewed, by region
Complaining parties formally The region where a seller who was
flags regarding potentially non- least one sale in 2017 received (such as a subpoena or court 2017 Agriculture (USDA).
withdrew their notice(s) 346 subject to a takedown notice was based. compliant listings, including a case. order) may compel us to disclose overnmental subpoenas
G 69% 60
Governmental court orders 1% 1
times. Overall, we saw a 2% both internal and community- records or information about Governmental search warrants 11% 10 We did not receive national
Civil litigants subpoenas or 18% 16
increase in intellectual property- generated flags. This represents In July 2017, we updated our our members. Etsy’s Requests court orders security letters, Foreign
related takedowns from 2016. a 32% increase in flags over Case System to better serve the for Information Policy is a guide Intelligence Surveillance Act
2016. Our software systems needs of our community. Buyers on how our Legal Response and (FISA) orders, or other classified
We rejected 15% of notices, automatically processed now have 100 days (rather than Enforcement team reviews and On top of requests for member requests for information in 2017.
a 6% increase from 2016. A 110,037 (28%) of flags. Our team 60) to file a case once they are responds to such requests. information, we received legal
notice may be rejected, for manually reviewed 369,694 eligible. Despite increasing the process requests that were
example, if Etsy is unable to (94%) of flags, including case window, we found that the When possible, and as permitted administrative in nature, such
2017
verify that the point of contact machine-processed flags to percent of orders resulting in a under applicable law, we notify as requests to debit, lien, or
Americas 68% 266,577
is authorized to act on behalf of ensure their accuracy. EMEA 21% 83,972 case remained at 0.3% between members about legal process otherwise freeze the funds of a
2017
the intellectual property owner, if Americas 77% 51,415
Asia Pacific 11% 43,989
2016 and 2017. requests for information from member’s payment account to
the description of the intellectual EMEA 17% 11,043 third parties. comply with a debt-related order
Asia Pacific 6% 4,306
property is insufficient, or if from a court.
the notice fails to comply with In 2017, Etsy produced records
Etsy’s policies. We attribute the in response to 74 of the 87
increase in rejections to abusive formal legal process requests
and fraudulent notices. Etsy also
received 1,568 Digital Millennium Photo by Ruth Maria MurphyYou can also read
