In the wake of US withdrawal from the Paris Climate Agreement several years ago, it’s been left up to companies to make their own strides towards combating climate change. As such, it was big news last year when Amazon announced its own Climate Pledge—a ambitious goal to reach net-zero carbon emissions by 2040, a full 10 years ahead of the Paris Agreement’s schedule. As one of the biggest, most influential corporations in America, a reduction of this magnitude could make a serious impact if Amazon reaches its target. The company recently gave the public an update on its Climate Pledge, and I wanted to give my brief take on what was shared. Let’s take a look.
Background of the initiative
As stated above, Amazon’s Climate Pledge, announced last year, is a commitment by the company to reach the net zero carbon emission goal of the Paris Agreement by the year 2040. Amazon was both a co-founder of the initiative (along with Global Optimism), and its first official signatory. As a huge, complex business that requires massive amounts of physical infrastructure, Amazon believes it has an obligation to do its part to reduce carbon emissions. While Amazon believes it has the footprint necessary to lead this charge, a spokesperson for the company stressed the fact that it cannot do it all alone. On that note, Amazon is actively seeking other companies to sign onto the pledge to decarbonize their operations on this expedited timeline. While achieving the goal would be an impressive achievement in itself, one could argue that the tangential benefits are just as, if not more significant. By engaging in this pledge, participating businesses will stimulate investment in low carbon products and services. The continued development of these solutions is absolutely crucial to the industry at large’s chances at curbing the global climate crisis. Just this past week, the company unveiled a $2 Billion Climate Pledge Fund to invest in such solutions.
What steps is the company taking?
While the company originally pledged to reach the 100% renewable energy mark in the next 10 years, by 2030, it shared this week that it was 5 years ahead of schedule and will reach its goal by 2025. Additionally, Amazon is engaged in 91 various renewable energy projects across the globe, which it says comprises more than 2,900 MW of capacity (capable of powering approximately 680,000 homes).
The company has also doubled down on its efforts to make its packaging practices more sustainable and recyclable. It claims that it has reduced the weight of its outbound packing by 33% since 2015, while also eliminating over 880,000 tons of packaging materials.
Additionally, the company shared that it has ordered 100,000 Rivian electric delivery vehicles, which it says it will begin to deploy for package delivery by 2021. By 2022, the company hopes to have 10,000 of these vehicles in operation, with all 100,000 in service by the year 2030. When you think about how many orders Amazon processes daily, how many miles its fleet must cover and how much fuel these vehicles burn, it’s safe to say the carbon emissions will be significantly reduced by this measure. Amazon predicts its electric fleet will be saving millions of metric tons of carbon per year by the time 2030 rolls around.
Another measure the company is taking to combat climate change is through a partnership with The Nature Conservancy, called the Right Now Climate Fund. The initiative commits $100 million to the cause of protecting and restoring the world’s dwindling forests, wetlands and peatlands, which Amazon says will reduce atmospheric carbon by millions of metric tons over the course of the project (providing widespread economic opportunities at the same time). In the last year, Amazon says it has directed funds from this initiative towards two projects: one in the Appalachians, and one in Berlin Germany focused on urban greening.
Now announcing new signatories to the Amazon Climate Pledge
The latest news on Amazon’s climate initiative came last week, in an Instagram post from Amazon founder and CEO Jeff Besos. He led off by acknowledging what a year 2020 had been so far—from the challenges presented by the Covid-19 pandemic, to the nation’s ongoing reckoning with racial inequality. He stressed that even in the midst of this upheaval, Amazon is staying the course on its Climate Pledge. Not only is it staying the course—it is expanding its coalition. Bezos announced the enrollment of 3 new big-name signatories: telco giant Verizon, digital services and consulting firm Infosys, and health and hygiene manufacturer Reckitt Benckiser (RB).
All three of these companies have a track record of taking corporate environmental stewardship seriously. Verizon says it is on schedule to achieve net zero carbon emissions (Scope 1 and Scope 2) by 2035. Additionally, the company is investing a $1 billion Green Bond into developing solutions that drive sustainability. With the help of the bond, the company hopes to power its operations using 50% renewable energy by 2025. Additionally, the company says it is investing in new virtual power purchase agreements for over 380 MW of wind and solar power capacity.
Infosys, meanwhile, got ahead of the game and voluntarily committed to achieving carbon neutrality way back in 2011. Because of this, the company is on schedule to reach its goal well before 2040. Infosys says that almost 45% of its power is already generated from renewables, with plans to hit the 100% mark in the coming years. It currently employs 60 MW of captive solar PV capacity. Additionally, Infosys claims its energy efficiency program has reduced its per-capita electricity consumption by 55% since 2008.
Lastly, RB has also set ambitious goals. In addition to net zero carbon emissions by 2040, the company has committed to achieving 100% renewable electricity and a 65% reduction of carbon emissions by 2030. The company has been making strides in sustainability since 2012, and has already achieved a 45% reduction in greenhouse gas emissions in its manufacturing, as well as a 37% decrease in water consumption.
Big problems require big solutions. There’s a lot of crises in the world to worry about right now, but one of the most consequential ones, which stands to affect everybody, is man-made climate change. Amazon’s Climate Pledge is a big, bold initiative, and the more big enterprises it ropes in, the bigger impact it will have on the global climate crisis. I will be following with interest to see what Amazon and its coalition are able to achieve in the coming years, and I look forward to seeing who else joins the ranks. When a company like Amazon makes up its mind to do something like this, others will likely follow.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.