The News: SEATTLE–(BUSINESS WIRE)–Jun. 23, 2020– Amazon (NASDAQ:AMZN) today announced The Climate Pledge Fund to support the development of sustainable technologies and services that will enable Amazon and other companies to meet The Climate Pledge—a commitment to be net zero carbon by 2040. This dedicated venture investment program—with an initial $2 billion in funding—will back visionary companies whose products and services will facilitate the transition to a zero carbon economy. Read the full press release.
Analyst Take: Last week I provided analysis of Amazon’s ongoing efforts to prioritize sustainability as part of “The Climate Pledge” it made in order to meet the 2050 Paris Agreement 10 years earlier. This effort has recently picked up momentum as Amazon continues to expand its ambitions by adding the likes of Infosys and Verizon to those making the same commitment. On the heels of the announcements last week, Amazon has furthered its commitment this week by committing $2 billion in funding for companies that are delivering product and services that enable a neutral carbon footprint.
Supporting Sustainability Focused Enterprises
In the release the company outlines the criteria for consideration as follows:
“The Climate Pledge Fund will look to invest in the visionary entrepreneurs and innovators who are building products and services to help companies reduce their carbon impact and operate more sustainably,” said Jeff Bezos, Amazon founder and CEO. “Companies from around the world of all sizes and stages will be considered, from pre-product startups to well-established enterprises. Each prospective investment will be judged on its potential to accelerate the path to zero carbon and help protect the planet for future generations.”
The Climate Pledge Fund will invest in companies in multiple industries, including transportation and logistics, energy generation, storage and utilization, manufacturing and materials, circular economy, and food and agriculture. Over time, Amazon will also look for opportunities to involve other Climate Pledge signatories in this venture investment program.
I like that the investments align closely to the pledge. The investments will be diversified and focused across industries but will all come back to the ability for the companies participating to achieve the path to zero carbon.
Amazon Releases its 2019 Sustainability Report Data
Beyond the announcement of the $2 billion dollar fund, Amazon today also released its 2019 sustainability report and an update on the company’s sustainability goals and programs. Highlights included:
- Amazon announced it is on a path to run on 100% renewable energy by 2025, five years ahead of schedule. As part of The Climate Pledge, Amazon had previously committed to reach 80% renewable energy by 2024 and 100% renewable energy by 2030.
- To date, Amazon has announced 91 renewable energy projects around the globe. Together, these projects totaling over 2,900 MW of capacity will deliver more than 7.6 million MWh of renewable energy annually, enough to power 680,000 U.S. homes.
- Amazon made two investments from its $100 million Right Now Climate Fund in nature-based solutions and reforestation projects around the world, including a reforestation project in the Appalachians in the U.S. and an urban greening initiative in Berlin, Germany.
- Since 2015, Amazon has reduced the weight of outbound packaging by 33% and eliminated more than 880,000 tons of packaging material, the equivalent of 1.5 billion shipping boxes.
I believe these are material examples of progress that the company has made. And these types of data points are going to be important to track given the long runway between now and 2040. The 100% renewable energy commitment by 2025 was a solid commitment and it came early, which should be encouraging. For these types of measures, the proof is in the pudding and Amazon continues to convince with not just money, but tangible results.
Overall Impressions on the $2 Billion Commitment and Sustainability Report From Amazon
Over the past few months, Amazon has been actively doing good from significant contributions to fighting the health pandemic that has plagued the world to creating tens of thousands of jobs as the economy has been actively shedding them at great pace.
Unfortunately, Amazon is also held to a different standard. With the companies exponential growth and influence, it will always be held to a higher standard begging questions like why it didn’t donate more, create more jobs or pay more to each employee. Having said that, the company is actively giving back while also doing its best to deliver the goods we need during these challenging times–which at times in the past 90 days presented a great challenge.
The $2 billion that Amazon is pledging is instrumental in providing resources to companies that seek to do good to improve the relationship between industry and the earth. Technology and resources to make our businesses more sustainable and be more sensitive to resource utilization from the planet. I’m confident in the effort as it is purpose led and has the potential to enable not only Amazon, but an abundance of companies around the world to deliver on their promises to be more sustainable and caring for the planet for generations to come.
Good Equals Progress provides industry research and analysis on the topics of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI). These columns are for educational purposes only and should not be considered in any way investment advice.
The original version of this article was first published on Futurum Research.
Image Credit: Getty Images for Amazon