Etsy 2015 Annual Report Download - page 20

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The trustworthiness of our marketplace and the connections among the members of our community are the cornerstones of our business. Many things could
undermine these cornerstones, such as:
• complaints or negative publicity about us, our platform, or our policies and guidelines, even if factually incorrect or based on isolated incidents;
• an inability to gain the trust of prospective buyers;
• lack of awareness of our policies;
• changes to our policies that members of our community perceive as inconsistent with our values or that are not clearly articulated;
• a failure to enforce our policies effectively, fairly and transparently, including, for example, by allowing the widespread listing of prohibited items in our
marketplace;
• a failure to respond to feedback from our community; or
• a failure to operate our business in a way that is consistent with our values.
If we are unable to maintain a trustworthy marketplace and encourage connections among members of our community, then our ability to attract and retain
Etsy sellers and Etsy buyers could be impaired and our reputation and business could be adversely affected.
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Our values are integral to everything we do. Accordingly, we intend to focus on the long-term sustainability of our business,our ecosystem, and expanding
the Etsy Economy, which is one of our key strategies. We may take actions that we believe will benefit our business and our ecosystem and, therefore, our
stockholders over a longer period of time, even if those actions do not maximize short- or medium-term financial results. However, these longer-term benefits
may not materialize within the timeframe we expect or at all. For example:
• we may choose to prohibit the sale of items in our marketplace that we believe are inconsistent with our values even though we could benefit financially
from the sale of those items;
• we may choose to revise our policies in ways that we believe will be beneficial to our community and our ecosystem in the long term even though the
changes may be perceived unfavorably; or
• we may take actions, such as investing in alternative forms of shipping or locating our servers in low-impact data centers, that reduce our environmental
footprint even though these actions may be more costly than other alternatives.
We are a Certified B Corporation. The term “Certified B Corporation” does not refer to a particular form of legal entity, but instead refers to companies that
are certified by B Lab, an independent nonprofit organization, as meeting rigorous standards of social and environmental performance, accountability and
transparency. B Lab sets the standards for Certified B Corporation certification and may change those standards over time. These standards may not be
appropriately tailored to the legal requirements of publicly-traded companies or to the operational requirements of larger companies. Our reputation could be
harmed if we lose our status as a Certified B Corporation, whether by our choice or by our failure to meet B Lab’s certification requirements, if that change in
status were to create a perception that we are more focused on financial performance and are no longer as committed to the values shared by Certified B
Corporations. Likewise, our reputation could be harmed if our publicly reported B Corporation score declines and that created a perception that we have
slipped in our satisfaction of the Certified B Corporation standards. Similarly, our reputation could be harmed if we take actions that are perceived to be
misaligned with our values.
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