Amazon’s latest report on its environmental and social initiatives contains many platitudes about renewables, EVs and emissions that we’ve come to expect from these annual dispatches — but one pending new policy is likely to have a huge ripple effect across its entire supply chain.
"While our most visible sustainability work may be in how we deliver orders to customers’ doorsteps, we are more than an e-commerce company, Amazon is an entertainment studio, cloud provider, grocer and more — and we are making sustainability a priority across all of our business," writes the company’s vice president of worldwide sustainability, Kara Hurst, in the report’s opening letter.
Hurst offers her nine takeaways in a blog published Tuesday. (You can download the report off that link.) I’ll get to some highlights in a moment, but here’s the revelation that puts Amazon’s entire supply chain on notice: Starting in 2024, Amazon will update its supply chain standards "to require regular reporting and emissions goal setting." Hurst writes: "We’ll also use our scale, investment and innovation to date to provide our suppliers with products and tools that will help them reach their goals — whether those are transitioning to renewable energy or increasing access to sustainable materials."
Few other details about the program are offered in the report, such as whether exemptions will be based on the size of the supplier.
But two specific potential outcomes are mentioned in the analysis. First, Amazon hopes to use its size and scale to "benefit businesses that are committed to decarbonizing by providing products and tools to both track emissions and help decrease them." Among other things, Amazon said it will help "select suppliers" transition to using carbon-free electricity. This is a practice that has been likewise been embraced by both Walmart and Apple.
Second, you can expect Amazon to pay particular attention to the suppliers that are demonstrating initiative on decarbonization. The report notes: "We will continue to look for suppliers that help us achieve our decarbonization vision as we select partners for business opportunities."
An Amazon spokeswoman said no additional details about the new supply chain emissions reporting policy will be shared at this time. Few companies require this sort of disclosure, although some, such as Amazon’s rival Walmart, have been pushing for this transparency for years through its Project Gigaton initiative.
Incidentally, Amazon reported a small reduction of 0.7 percent in 2022 for the Scope 3 emissions related to its supply chain. Much of that was related to its ability to manage reductions related to building construction (such as its new headquarters in Virginia) and in logistics, as the company shifts to handle more goods itself rather than using third-party suppliers, according to the report.
In contrast, Amazon’s Scope 1 emissions — related to fossil fuels and refrigerants — increased by 11 percent last year, which the company attributed to business growth, changes to its logistics policies and "an improvement" in how it calculates carbon emissions that enables it to use more granular data about its operations. (Find out more about that methodology here.)
From an overall standpoint, Amazon reduced its carbon footprint by 0.4 percent last year, largely helped by its aggressive renewable energy purchases. The company’s "carbon intensity" — that is, its emissions expressed in relation to revenue — was 93.7 grams of carbon dioxide equivalent per dollar of gross merchandise sales. The overall total of its carbon footpr
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