Making The Grade- Amazon 2020 Sustainability Report Shows Progress Towards Environmental Goals

Amazon Sustainability Report AMAZON

Today, Amazon unveiled its 2020 Sustainability Report under the moniker “Further and Faster, Together.” This latest report from Amazon aims to underline the online retail giant’s accomplishments and progress towards its environmental goals outlined in its Climate Pledge. While any company can claim it is committed to a sustainable future, as a tech analyst, I appreciate when companies take the time to quantify their efforts and make them public. I have tracked many company efforts, including FlexHP Inc., CiscoQualcommDell Tech, HPEIntel,  On SemiconductorNI and many many more.

Internal accountability is crucial, of course, but I would argue that public accountability and transparency are even more critical if businesses hope to reach these goals. Amazon has caught a lot of flak for its labor and business practices lately, but I believe this is an area where the company truly is doing good work. One could argue whether one business should be so large and powerful. Still, it’s undeniable that, as long as it is, it should minimize its massive environmental footprint. The report is lengthy, but I wanted to share what I consider to be the key accomplishments or newsworthy items from the previous year. Some of this will be a recap of stories I’ve already reported on, and I will provide any relevant links for additional details as necessary. 

Climate Pledge progress report

Amazon’s Climate Pledge, essentially, is the company’s initiative to achieve net-zero carbon emissions by 2040, 10 years earlier than the Paris Agreement’s 2050 goal. Pertaining to that, Amazon announced that over 100 new companies had signed onto the initiative, including Best Buy, Verizon, Microsoft, Mercedes Benz and many more. All said and told, Amazon says the signatories add up to over $1.4 trillion in global annual revenues, with a cumulative five million employees spread out across 25 industries in 16 countries. Additionally, the report celebrated Amazon’s creation of the Climate Pledge Fund, its $2 billion investment in carbon-reducing technologies and services, and the launch of its Climate Pledge Friendly certification for products that meet specific sustainability standards. More than 75,000 Climate Pledge Friendly products are on the market across the U.S., U.K., France, Germany, Italy and Spain. Lastly, Amazon has made significant progress on its Climate Pledge Arena in Seattle, WA, which is in the process of getting certified as the world’s very first net-zero carbon emissions stadium. 

A leader in renewable energy

One of the big headlines of the report was that Amazon is now the biggest corporate purchaser of renewable energy worldwide. As of the end of 2020, renewables accounted for an impressive 65% of Amazon’s power usage. This is a considerable increase from 2019’s 42%, leading Amazon to not-so-cautiously project it will meet its 100% renewable energy goal as soon as 2025 (five years ahead of its original intent). To reach these numbers, Amazon is predominately drawing on its 232 wind and solar projects worldwide, which purportedly supply the company with approximately 10 gigawatts of electrical production capacity. 

On a related note, Amazon also revealed a status update on its efforts to replace much of its delivery fleet with electric vehicles (EVs). The company made headlines in 2019 with its order of 100,00 EVs from automaker Rivian. According to Amazon, the first of these vehicles were deployed in Los Angeles this past February, with the first 10,000 expected to hit the roads by 2022. Amazon has 2030 as the target for full deployment of the 100,000 EVs. Already, Amazon says it has made over 20 million deliveries with EVs in North America and Europe.

Also note that Amazon invested in Plus, a trucking safety and energy reducing technology company. Trucking automation not only saves lives, but energy.

Investing in a sustainable future

Amazon is also putting its considerable worth to work, investing in various sustainability-minded initiatives and startups. In 2020 it unveiled the AWS Clean Energy Accelerator, an incubator program to assist clean energy startups in expanding their operations and increasing their impact. 

Another new project with Amazon’s imprint on it is the LEAF Coalition, a global initiative comprised of businesses and governments formed to protect the world’s dwindling tropical rainforests from the fallout of climate change and deforestation. Propelled significantly by Amazon’s efforts, the coalition seeks to deliver $1 billion worth of results-based financing towards the cause. The group will dole out these funds to tropical and subtropical forest countries that make high-quality emissions reductions and engage in sustainable development. At the time of its formation, the coalition included the Norwegian, British and U.S. governments and other corporate juggernauts like Airbnb, Boston Consulting Group, Unilever, Salesforce, Bayer, McKinsey, GSK and Nestlé.

Lastly, in this realm, Amazon formed a $1 billion sustainability bond to finance sustainability projects that fall under five categories: renewable energy, clean transportation, sustainable buildings, affordable housing and socio-economic advancement and empowerment. While we should laud Amazon for these efforts, one would be remiss not to point out the potential socio-economic impact of allowing its approximately one million-strong workforce to unionize. Amazon’s 2018 decision to raise its minimum wage to $15 and more recent worker pay raise were essential steps in the right direction, but complaints about working conditions remain. 

Wrapping up

The main thing that struck me looking over Amazon’s sustainability report this year was the sheer comprehensiveness and scale of the company’s efforts. Between the Climate Pledge, the transition to electric vehicles, the investment in eco-friendly technologies, and its fast track to 100% renewable power, Amazon’s multipronged approach is tackling its environmental footprint on all fronts. The company’s efforts to bring its fellow corporate citizens and governmental bodies along for the ride could prove equally if not more impactful. 

Kudos to Amazon for stepping up and going above and beyond the call of duty, even when it was uncertain that the U.S. government would remain invested and involved in the Paris Agreement. Amazon isn’t the only companies leaning into sustainability, but given its size and scope, it’s hard to find another company who’s doing more. 

Ultimately, it will likely take a healthy combination of public and private sector efforts to make a dent in global climate change, especially given the pendulum of climate politics. It takes a village.  At the very least, Amazon seems in it for the long haul, and it has the deep pockets and scale to push for change on all levels—corporate, governmental and individual. 

Note: Moor Insights & Strategy writers and editors may have contributed to this article. 

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.