Amazon to invest $2bn in low-carbon innovations
Amazon will invest at least $2bn (£1.6bn) in smaller firms creating technologies or services aimed at reducing carbon emissions to net-zero, the e-commerce giant announced on Tuesday (23 June).
The investment is entitled ‘The Climate Pledge Fund’, a homage to Amazon’s own global sustainability strategy, launched last year and headlined by a 2040 net-zero target.
It will be spent on helping businesses “of all sizes and scales, from pre-project startups to well-established enterprises”, so long as they are working to scale up products, systems and services that accelerate the decarbonisation of high-emitting sectors or the transition to a circular economy.
Businesses will be judged by representatives from Amazon and NGO Global Optimism, co-founded late last year by Paris Agreement architect Christiana Figueres. Judgement will be passed on a case-by-case basis, with firms required to prove their potential environmental benefit.
To be eligible for funding, businesses must operate within the transport and logistics, energy generation, energy storage and flexibility, manufacturing and materials or food and agriculture sector.
Amazon has not yet confirmed the limit on how much financing any one business can receive from the Climate Pledge Fund, or by what date it is aiming to allocate the full $2bn. However, it did describe the sum as “initial”, stating that there is the potential for more investment from either Amazon itself, other corporates or venture capitalists. Moreover, Amazon is already investing in external innovation through other channels. Last year, the retailer led a $700m investment round into Rivian, a Michigan-based electric vehicle firm, before placing an order for 100,000 Rivian delivery vehicles, due to come into operation in late 2021.
“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,” Amazon founder and chief executive Jeff Bezos said.
The launch of the fund comes shortly after Amazon revealed that three other large businesses - Dettol and Durex owner Reckitt Benckiser, US telecommunications giant Verizon and Indian IT services firm Infosys – joined The Climate Pledge. And, earlier this year, Bezos pledged $10bn of his personal wealth to scientists, NGOs and activist groups working on climate adaptation and mitigation.
But Amazon has, historically, faced much criticism for its approach to environmental sustainability. The Climate Pledge was created off the back of mounting pressure from consumers, investors and its own staff, who were disappointed in the firm’s hesitance to set time-bound, numerical targets on things like renewable energy sourcing. Amazon has also come under fire for selling its Web Services to oil and gas firms and using non-renewable energy to power its cloud infrastructure.