Amazon.com Inc (Amazon) is an online retailer and web service provider. The company originally started off as selling books online, is now a tech behemoth with its revenues primarily coming from e-commerce and AWS, which is their cloud offering. It makes up almost 39% of US ecommerce retail sales. With a valuation of over $1.4 trillion, Amazon is now worth more than America’s 9 largest retailers and a market leader in cloud services.
What to expect today:
Sustainability at Amazon
Amazon’s path to net zero
Sustainability at Amazon
Amazon’s carbon footprint in 2020 was 60.64 MMT, with the majority of its emissions, 75%, coming from scope 3. Absolute emissions in 2018 were 44.4 MMT and in 2019, it increased to 51.17 MMT. In absolute terms, we see Amazon’s emissions increasing by almost 18% year over year.
Breakdown of carbon footprint (2020)
Scope 1: 15.86% of emissions
Fossil fuels contribute to 97.4% of scope 1 emissions and the rest are by refrigerants
Scope 2: 8.69% of emissions
From use of purchased electricity
Scope 3: 75.44% of emissions
36.5% of scope 3 are corporate purchases and Amazon-branded product emissions
34.4 % of scope 3 are other indirect emissions like packaging and transportation related.
23% are from capital goods like equipment, construction
Comparison with Microsoft and Walmart
Microsoft is Amazon's primary competitor in cloud whereas Walmart is its primary competitor in retail. Below we have compared their intensity and overall goals.
Note: 2020 was the latest year when the data was available for all the three companies
Although Amazon has absolute emissions increasing year over year, we see that their emissions intensity has reduced significantly. However, it still remains higher than both Microsoft and Walmart which can be considered comparable companies given Amazon’s vast operations. In addition we also looked at the goals of the three companies and found that:
Amazon plans to go net zero by 2040 across their business
Microsoft has a carbon negative goal for 2030
Walmart’s goal is to achieve zero emissions across Walmart’s global operations by 2040
The Climate Pledge
In 2019, Amazon co-founded The Climate Pledge—a commitment to be net-zero carbon by 2040, 10 years ahead of the Paris Agreement. The Climate Pledge has a community of about 315 companies, with the likes of Tech Mahindra, Accenture, Hp, Microsoft, IBM etc. Amazon itself has made $2 billion in investments to support the development of technologies and services that reduce carbon emissions and help preserve the natural world.
Climate pledge agrees to three commitments:
Measuring and reporting greenhouse gas emissions on a regular basis
Implement decarbonization strategies including renewable energy, efficient equipments etc
Neutralize any remaining emissions with additional, quantifiable offsets to achieve net-zero annual carbon emissions by 2040, 10 years ahead of the Paris agreement
Amazon's Path to net-zero
To achieve the path to net zero, Amazon came up with a slew of initiatives. In this section, we highlight some key initiatives that the company is undertaking.
Delivering shipment zero
Shipment Zero is their goal to deliver 50% of Amazon shipments with net-zero carbon by 2030.
Zero shipment starts with fulfillment centers, where they stock and process orders for delivery to customers
A Shipment Zero order will travel through facilities powered by 100% clean energy from wind and solar projects
A Shipment Zero order will ship in carbon neutral packaging
These are shipped without packing materials through the Frustration-Free Packaging (FFP) programs, which incentivize manufacturers to develop more sustainable packaging solutions for online fulfillment
A Shipment Zero order will be transported in an electric delivery vehicle or by a delivery associate on foot or on a bicycle.
Check out our previous edition on EV delivery vans to learn more about the electrification of last mile delivery
As part of their goal to reach net-zero carbon by 2040, Amazon is on a path to powering their operations with 100% renewable energy by 2025. Amazon has a total of 232 renewable energy projects globally by 2021, including 85 utility-scale wind and solar projects and 147 solar rooftops on facilities and stores worldwide.
On December 10, 2020, Amazon became the world’s largest corporate purchaser of renewable energy. Amazon succeeds technology giants Microsoft, Google and Meta in terms of clean energy purchases. Refer to the chart below.
Some of their projects include:
Wind project in Netherlands
Amazon’s latest renewable energy investment, the Amazon-Shell HKN Offshore Wind Project, is Amazon’s largest single-site renewable energy project to date
It will supply the electrical grid powering the Netherlands without government subsidies
Largest rooftop solar array in Colorado
The solar array comprises more than 17,000 panels spread across 19 acres, generating enough energy to provide upto 45% of the 855,000 square foot facility’s annual energy needs
As part of Amazon’s commitment to The Climate Pledge, Amazon is also working to make Amazon devices more sustainable for usage by customers.
They are incorporating recycled plastics, fabrics, and metals into many new Amazon devices like in Echo, Fire TV where they have used 10-60% post-consumer recycled plastic, 40-100% post-consumer recycled fabric and 80-100% recycled aluminum depending on the product
Amazon is working to source 100% of the wood fiber in their packaging from responsibly managed forests or recycled sources