Committing to a Net Zero Carbon Future

In 2020, Block announced our goal to reach net zero in carbon emission by 2030, for our full corporate operations footprint: Scopes 1, 2, and 3.

Scope 1 covers direct emissions from owned or controlled sources, Scope 2 covers indirect emissions from the generation of energy consumed, and Scope 3 includes all other indirect emissions that occur in a company’s value chain. As of 2022, our Scope 3 footprint is 98% of our total carbon footprint and tracks everything from emission calculations attributed to our credit card processing to energy consumption by Square sellers using our hardware.

Read on for details on how we’re doing, and where we’re headed.

We saw an increase of gross carbon emissions in 2022 from the prior year while continuing to decrease our emissions intensity as a percentage of gross profit.

Block’s roadmap for net zero for operations includes reducing our internal and supply chain emissions while we continue to scale our carbon removal portfolio. We have set internal targets for total emissions each year based on our projections of business growth. To the extent we have future M&A activity, this could require recalibrating targets as we continue to grow into new sectors and verticals and integrate new teams and activities. Although we are still early in our carbon reduction journey, we have already made substantial strides: Our 2020 and 2021 emissions intensity represented 87 and 74 tonnes of CO2e per $1 million in gross profit generated that year, respectively. For 2022, our carbon intensity was 65 tonnes of CO2e per $1 million in gross profit. To provide a consistent assessment of our internal reductions progress year over year, we exclude carbon removal purchases in this annual comparison. We aim to remain vigilant and agile in regards to our emissions as our growing ecosystem of businesses continues to evolve. Our hope is to see this relative carbon intensity diminish over time. When including our carbon removal portfolio, our relative intensity for 2022 represents 56 tonnes per $1 million in gross profit.

Our collective efforts to reduce internal emissions.

Starting with all products sold in 2021, we now purchase certified carbon removal credits to offset all global Square hardware shipping emissions for products sold through Square Shop and our retail partners. We conduct a quarterly audit that includes both inbound freight from our contract manufacturers as well as all outbound shipments of our devices.

In 2022, we joined the Responsible Business Alliance as a participating member. We had begun using the tool by checking the social responsibility audits of our suppliers that are also members. We plan on expanding our use of the platform in 2023 as well as attending the monthly sustainability working groups to gain insight into sustainability trends in the industry.

The dedicated individuals of the Square Hardware Sustainability Group meet regularly to study the environmental impact of our hardware devices as well as manage both current and future initiatives to reduce it. This group’s work is pivotal in driving down our device and logistics emissions.

In 2022, we obtained our official SCS certification to verify that some of our die-cast parts in our Stand product are being made with 100% recycled aluminum. We also started using 75% closed-loop recycled aluminum in one part of our Stand product. For our Square Register product, we have done experiments and preliminary testing to see if we can use 75% closed-loop recycled aluminum for our aluminum enclosures.

We continued to make great strides to eliminate single-use plastics in our packaging and improve curbside recyclability. The new Square Stand launched in 2022 with water-based coating instead of traditional plastic laminates and with a corrugated paper carrying handle instead of a plastic handle. Additionally, we designed and tested a new paper hang tag that will replace a plastic version for our retail products in 2023. Furthermore, in 2022 we transitioned ~25% of papers to Forest Stewardship Council (FSC) certified and expect that to reach more than 50% by the end of 2023.

As we work to reduce our carbon footprint, it is essential that we understand the carbon impact of all our hardware products. Through carbon Life Cycle Assessment (LCA), we track all the carbon emitted through the production, assembly, and use of our products. In 2021 we completed all LCAs for our hardware products. In 2022 we began exploring specialized software platforms to help further refine and enhance our LCAs.

In 2021, we performed many experiments and preliminary testing for PCR in our hardware. This year we have successfully implemented 50% PCR into both our magstripe readers and our contactless chip reader for mass production. Our Stand product is now being manufactured with 50% PCR in 75% of the product’s overall plastic mass. Two of our hubs are being manufactured with 50% PCR as well, and we are continuing to expand PCR in our product portfolio.

Approximately 95% of the cables we ship today are PVC free. We also intend to continue designing our new and next-generation cables as PVC-free.

In 2022, we rolled out the EcoVadis initiative across our entire supply chain. We reached out to over 80 suppliers, with 57 completing the online assessment, covering approximately 75% of our 2022 projected spend. In terms of performance, Block’s suppliers are performing above the industry average within the four EcoVadis pillars: environmental, labor and human rights, ethics, and sustainable procurement. In the graphic below, the larger numbers indicate Block’s scores and the smaller numbers below our scores indicate industry averages. In all four categories, we are performing higher than the industry average. Looking at a distribution graph for Block’s overall scores, we are outperforming the industry average. As we continue this initiative, we are constantly looking to improve our presence within the realm of sustainability. We are currently working with our low-scoring suppliers to complete their corrective action plans, as well as working to onboard all suppliers onto the EcoVadis platform in the upcoming years.

Read our 2020 press release announcing the Net Zero Carbon for Operations by 2030 initiative, and check on past updates in our 2020 and 2021 Corporate Social Responsibility Reports.

Square, Inc. changed its name to Block, Inc. on December 1, 2021.