Amazon's sustainability : Are they doing enough?
Success comes at a cost
Unlike many businesses, Amazon actually performed extremely well through the pandemic. As we were unable to safely go out and shop, we got many of our essential and non-essential goods online. According to the New York times, the shift in sales to online saw Amazon profits rise by 220% over the course of the pandemic (Weise 2021), as people used the service not only to order goods but to access entertainment and other services like their cloud computing.
- A snapshot of Amazons quarterly performance over the 3 years. See how sales spike massively over the course of the pandemic.
This success hasn’t come without deep cost the environment though. The companies emissions spiked 19% (Boudreau 2021) through the course of the pandemic, due increased use of fossil fuels for building warehouses and data centres as well as the transportation if orders. Despite its size and influence over the world of business, Amazon previously hasn’t released its carbon footprint data (Boudreau 2021). However, this changed in 2019 when the company pivoted and agreed to worked towards the goals of the decade old Paris climate agreement.
Amazons new commitments
Despite being late to the party when it comes to being transparent and proactive in sustainability, Amazon is taking the steps to actually beat the targets set by the Paris climate act, by setting goal of reaching net zero by 2040, 10 years earlier than the original target set by the worlds government.
CEO Jeff Bezos’s Earth fund plans to spend $10 billion dollars fighting climate change(CNBC 2021). Efforts include the conservation of the world’s forests, food supply chain transformation and restoring previously degraded parts of nature.
- Amazon CEO Jeff Bezos at the Glasgow climate summit in 2021, pleading additional support and funding for fighting climate change.
The company has made big strides in renewable energy, about two thirds of it being renewable now. Some these plans for greater sustainability at the company includes 100,000 electric vans added to the amazon fleet (Boudreau 2021), however this as a percentage of the fleet has not been disclosed.
My opinion
Amazon for too long has operated as this massive corporate giant with little stated purpose other than providing fast, reliable service and delivery for its customers. Its exsolution into a tech company, with its ownership over audible, twitch to name a few, sees its influence and impact over the world increasing.
Despite being late to the party when it comes to reporting, I hope amazon can exceed their target, which evidence states they certainly could be able to do.As the worlds 5 largest company (Ventura 2021), Amazon exceeding the targets set by the Paris climate act can make them a role model. If they continue to grow successfully through the changes to the operations and value chain, it becomes a very public case study to the benefits business can reap when they fully commit to sustainability as a central goal.
Amazon needs to stay committed and transparent by being willing to admit their mistakes as well as they’re successes. Bezos also needs to make sure his focus stays on fixing the situation at home, rather than investing large amounts of money in the Amazon space project. Space travel is great, but we need to see it as an opportunity you improve life on earth, not simply replace it.
References
References
Boudreau, C. (2021, November 18). Shopping online surged during Covid. Now the environmental costs are becoming clearer. POLITICO. https://www.politico.com/news/2021/11/18/covid-retail-e-commerce-environment-522786
Scheimer, D. (2021, July 9). The prime effect: The environmental footprint behind the world's largest online retailer. WBUR. https://www.wbur.org/onpoint/2021/07/09/the-prime-effect-amazons-environmental-impact
Taylor, C. (n.d.). Jeff Bezos pledges $2 billion to protect the environment. CNBC. https://www.cnbc.com/2021/11/02/jeff-bezos-pledges-2-billion-to-protect-the-environment.html
Ventura, L. (2021, August 3). World’s largest companies 2021. Global Finance Magazine. https://www.gfmag.com/global-data/economic-data/largest-companies
Weise, K. (2021, April 30). Amazon’s profit soars 220 percent as pandemic drives shopping online. NY times. https://www.nytimes.com/2021/04/29/technology/amazons-profits-triple.html
Hello Spencer,
ReplyDeleteGreat blog post! I had no idea that Amazon was currently planning on investing in sustainable initiatives towards food supply chain transformation and forest conservation. However, I immediately get hesitant over the verbiage of "setting goals to reach net zero by 2040" and "plans to spend $10 billion dollars on climate change". This is because these are common sayings that I have noticed many large corporations, like Nestlé and PepsiCo, say regarding climate change but have not actually taken any steps towards implementing these initiatives. I also agree with your point about how Amazon is really late to the party and makes me wonder if they are genuinely wanting to be more sustainable or if they are just doing this for the good press. Overall, great post!
Hello Spencer,
ReplyDeleteThank you for sharing this with us. It is really interesting to see how much Amazon has grown since the beginning of the pandemic. I was not aware of that and this indeed corresponds to the increase in Amazon's share price in march 2020 going from 1717$ to 3400$ in August 2020.
It is interesting to know as well that they are investing in sustainability. Now we just need to wait and see whether they keep their promises.
Moreover, thank you for sharing your opinion with us it is always relevant to have your personal insights!
Great work!
Great post Spencer! I initially reflected on the excerpt where you stated that Amazon has massively succeeded while lacking a true purpose. A key takeaway from several sustainability courses I’ve taken is that nowadays, company’s won’t be able to survive unless they have some kind of sustainability-minded or social focus outside of simply profit. This begs the question, how was Amazon able to amass such a share of the market without adhering to this rule? Perhaps the services they provide are so integral to our everyday lives people look past the company’s shortcomings in return for an excellent service.
ReplyDelete