It seems to be the season for firms to publish their sustainability / ESG reports for 2022. I guess it might just reflect how long it takes to put a comprehensive report together, although a cynic might worry that publishing during the summer holiday season means there is less chance of critics taking a close look at the data.
Amazon, by some measures the world’s largest company, published its sustainability report recently. A short-cut to digesting the key points comes from Kara Hurst, Amazon’s sustainability lead, with an article titled, “9 takeaways from Amazon’s 2022 Sustainability Report” on the firm’s website.
In some areas, such as the focus on renewable energy, there seems little doubt that the firm has a good story to tell. “We are on a path to powering our operations with 100% renewable energy, and we’re on track to do this by 2025, five years ahead of schedule”. The firm is already at 90% and has over 400 renewables projects in 200 countries. That means the firm has set a global record for the most renewable energy purchased in a single year.
Fleets of electric and hydrogen powered delivery vehicles and fork-lifts in warehouses are growing rapidly too. However, I’d be curious to know what percentage of Amazon deliveries worldwide are made by self-employed couriers and delivery people / small firms. I don’t see many electric vehicles doing the Amazon rounds in Camberley, that’s for sure. It is more likely to be a diesel powered white van with the engine left running as the driver sprints up and down the driveways!
But packaging appears to be another area that is moving in the right direction. “Since 2015, we’ve reduced the average weight of packaging per shipment by 41%, avoiding more than 2 million tons of material waste”. That used to be a standing joke, the tiny product arriving in a huge cardboard box filled with packing material. So it is good news if that has been addressed.
However, Amazon seems to be a little late to the Scope 3 party. “Beginning in 2024, we’re updating our Supply Chain Standards to require suppliers to share their carbon emissions data with us and set carbon goals”. I mean, the UK government has been doing this for some years now, in line with many large businesses. It seems surprising that Amazon is just getting round to that in 2024. I wonder whether this is going to apply to all suppliers, or just the largest – and do they define “suppliers” as all the firms that trade through the Amazon platform? I would hope and expect that there is an element of segmentation here. Amazon says they will provide tools and resources to help suppliers reach their goals, so I hope they invest their time and effort where it can make the most difference.
Point number 8 is “Respecting human rights with responsible business conduct”. “In 2022, we committed $3 million to the U.S. Agency for International Development (USAID) Climate Gender Equity Fund to address inequities that exist for women in the climate finance ecosystem.” It would be interesting to know why that cause was chosen but really for a firm of Amazon’s size, $3 million is nothing. Amazon is investing $50 million directly in climate tech companies run by women alongside that money – but that should be to the firm’s benefit, so it is hardly a selfless act.
There have of course been many stories about poor working conditions in Amazon’s own warehouses. It is perhaps inevitable in a business of this size that there will be some issues. This was earlier this month in the Guardian. “About 900 workers at the Coventry warehouse are taking three days of strike action from 11 July to 13 July, coinciding with its Prime Day sales event on Tuesday and Wednesday. Along the picket line, one worker holds up a placard carrying the union’s familiar refrain: “I am not a robot.”
Is the firm any worse an employer than other large warehouse-type operations? I doubt it, but we can’t really tell. Amazon does score well in terms of disability inclusion though - but note that the heading here, “Best firm to work for…” does not mean THE best. Over 300 US firms got the same rating in this particular assessment!
If you have the time, there is more in the full sustainability report here. Outside the 9 points in the article, the full report gets into human rights and other topics in more detail. When it comes to such issues across the full supply chain, Amazon faces an almost impossible task. Just think about how many firms are suppliers to Amazon directly or use the platform. Assuring for example that there is no forced labour going on across that huge group is virtually impossible, but the full report does highlight a number of good initiatives. On the other hand, biodiversity does not appear to be a high priority. Amazon is not a major driver of deforestation unlike (for instance) meat or palm oil producers and users, but perhaps the firm could do more in this area.
Amazon is more than “just” the marketplace of course. There are devices like the Kindle, the not very successful Wholefoods retail business and more. So other aspects within the “sustainability” area come into play more strongly there.
A big question to finish - is Amazon a force for good in the world? Well, I’m not sure it is healthy fundamentally for one firm to have such market dominance. In a perfect world, that would not be the situation. But given that is the case, Amazon appears to be trying hard and in some areas, such as renewable energy, is a leader and pace setter.
My daughter spent several years virtually housebound because of health issues and Amazon was vital in terms of helping her get hold of products for her personal and business needs. And you might argue that Amazon has also provided the means for MacKenzie Scott, Jeff Bezos’ ex-wife, to give away over $14 billion in the last 4 years or so to good causes and charities, probably the most amazing burst of philanthropy the world has ever seen.
Anyway, the summary article and the full report are worth a read and there are plenty of good ideas in there that others might wish to follow.