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Amazon claims it is making net-zero progress despite 18% increase in absolute emissions

Amazon puts its increase in absolute emissions down to company growth

Published late on Monday (1 August), the report states that Amazon’s absolute emissions footprint in 2021 was 71.54 million metric tonnes, up from 60.4 million metric tonnes in 2020 and around 51 million metric tonnes in 2019. All scopes are covered in Amazon’s calculations.

These figures are much lower down in the report than Amazon’s carbon intensity figures. They also do not feature in a related blog from Amazon’s vice-president and head of worldwide sustainability Kara Hurst. The firm measures carbon emissions against each dollar of gross merchandise sales to calculate carbon intensity. After posting a 16% year-on-year reduction between 2019 and 2020, the latest report reveals a further 1.9% year-on-year reduction between 2020 and 2021.

This would suggest that Amazon has not fully been able to decouple growth of the business from growth in emissions. Its North American business was its fastest growing market in 2022, with revenue up 18.4% year-on-year.

“The path to decarbonisation remains challenging. This is especially true for a business of the size and broad scope of Amazon,” the report states.

It adds: “As we work to decarbonise our company, Amazon is growing rapidly. We have scaled our business at an unprecedented pace to help meet the needs of our customers through the pandemic. From early 2020 to the end of 2021, we created more than 750,000 full-time and part-time jobs worldwide and doubled the size of the fulfilment network that we had built over the previous 25 years.

“At the same time, an increasing number of companies around the world moved their technology to the cloud, gaining significant speed, innovation, and cost advantages, and Amazon Web Services (AWS) grew its revenue by 37% year-over-year in 2021. These developments meant we had to build new facilities— for both our consumer and cloud businesses—and expand our transportation network. Throughout this growth, we remained focused on improving our efficiency through more-sustainable solutions.”

In 2022 so far, Amazon has seen a slight drop in its e-commerce sales as consumers cut back amid the cost-of-living crisis, but still expects a rise in net sales led by Web Services and other digital offerings.

Amazon’s overarching emissions commitment is to reach net-zero across all scopes by 2040 at the latest. It has pledged to prioritise emissions reductions over offsetting, and to ensure that any offsets which are used are “ additional, quantifiable, real, permanent and socially beneficial”.

Areas of progress

Changes which have contributed to Amazon’s lower carbon intensity for 2021 include the increase of renewable energy procurement. 85% of the electricity used in Amazon operations was renewable in 2021 and the firm is aiming to reach 100% by 2025 – five years ahead of its original target.

Headway has also been made in decarbonising road transport, as Amazon aims for half of its shipments to be net-zero emission by 2030. The company revealed that its European electric fleet grew to 3,000 vehicles in 2021 and that these drivers collectively delivered around 100 million parcels. A further five million shipments were made using zero-emission micro-mobility in Europe, and 30 million in New York. Nonetheless, there have been delays in rolling out EVs in the US and the company has posted little progress in low-carbon aviation and shipping.

Looking at Amazon’s emissions scope-by-scope, the company posted a 26% year-on-year increase in Scope 1 (direct) emissions; a 23% decrease in Scope 2 (power-related) emissions and a 14% increase in Scope 3 (indirect) emissions.

TCFD reporting

The report is the second from Amazon to include climate risk and opportunity disclosures under the framework laid out by the Taskforce on Climate-Related Disclosures (TCFD).

TCFD reporting intends to help businesses measure and disclose their climate-related risks including physical, transition and reputational risks – and to identify and capitalise on opportunities from climate action.

Amazon describes its flood risk, exposure to other extreme weather events and exposure to potential water scarcity as “acute”. It does not publicly quantify these risks or show scenario analysis – the TCFD’s recommendation that businesses should assess risk at a range of warming scenarios.

Unlike many companies, Amazon does, however, list climate-related opportunities. It names the procurement of renewable energy; the shift to sustainable transportation; the improvement of buildings; water efficiency and stewardship; product innovation; waste reduction; the recycling economy and cleantech investment.

© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.

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