Improved emissions reporting: an enlightening contrast example
In a recent report, Amazon.com has been commended for its approach to sustainability, contrasting sharply with companies like Total and Shell whose corporate websites highlight misleading headline numbers about the energy transition.
The report, published in July 2024, details Amazon's commitment to reaching net-zero carbon emissions by 2040, a goal it set when co-founding The Climate Pledge in 2019. Amazon's business model, which encompasses online retail, food retail, content generation and distribution, AWS hyperscaler, and data center operation, has shifted significantly to reflect this commitment.
The report emphasizes Amazon's transparency and alignment with the spirit and letter of the Paris Agreement. However, it also highlights the need for robust, independent assessments to distinguish between companies genuinely working towards net zero and those employing accounting wheezes or giving misleading accounts of progress.
Amazon's sustainability strategy impacts its business model by necessitating innovation in logistics, energy procurement, and technology deployment. Key initiatives from the 2023 Sustainability Report include expanding its electric delivery van fleet from 19,000 to over 31,000 in 2024, with a goal of 100,000 EVs by 2030. The company has also committed to matching 100% of its electricity consumption with renewable energy sources since 2023 and is halfway toward becoming water positive by 2030.
Despite a 6% increase in total emissions to 68.25 million metric tons CO₂ equivalent in 2024, Amazon improved efficiency by reducing carbon emissions relative to revenue (carbon intensity), decreasing from 75.6 g CO₂e per dollar of gross merchandise sales to 72.6 g CO₂e/$GMS.
The report discusses a variety of ways TCFD reporting, net zero goals, and decarbonization pathways are interpreted and presented by global companies. It also suggests that TCFD reporting risks becoming a time-consuming exercise of limited value if it does not reflect real-world facts on the ground or in the air.
The negative examples of Shell and TotalEnergies, as mentioned in the report, raise questions about the assumptions underlying external sustainability ratings used by investors. Climate Action 100+ has recognized Total's leadership in the energy transition, placing the company far ahead of the Net Zero Standard for Oil & Gas. However, MSCI deems Total to be "in line with the Paris Agreement's minimal goal of limiting global mean temperature to below 2°C," and rates Shell as AA.
As Amazon continues to lead the way in sustainability, it remains crucial for companies to measure and monitor their emissions accurately and to report their progress transparently. The 2024 Sustainability Report is expected to be issued by Amazon.com in July 2025.
- The 2024 Sustainability Report, to be released in July 2025, will showcase Amazon's commitment to environmental-science, as its goal is to reach net-zero carbon emissions by 2040, a goal set when co-founding The Climate Pledge in 2019.
- Amazon's influences in finance and business have been significant, as its business model has been shaped to reflect its sustainability strategy, necessitating innovation in logistics, energy procurement, and technology deployment.
- The report underscores the importance of robust, independent assessments in the world of science and technology, to differentiate between companies genuinely working towards net zero and those employing misleading accounting practices or reporting inaccurate progress.
