Amazon sustainability report: Carbon emissions rose 19% in 2020 as pandemic drove huge revenue
As Amazon’s sales skyrocketed during the pandemic, its carbon emissions rose — by 19%, according to its 2020 sustainability report, released Wednesday. That’s up from a 15% year-over-year increase in 2019. But at the same time, the company last year lowered its carbon intensity, a measure of carbon pollution per dollar earned, edging slightly towards its pledged goal to reduce its net carbon footprint to zero by 2040.
The report is Amazon’s third annual sustainability report assessing progress toward its 2019 Climate Pledge to achieve net-zero carbon emissions by 2040. Amazon aims to power its operations with 100% renewable energy by 2025 and make half of its shipments net-zero carbon by 2030, including through 100,000 custom electric vehicles that will be on the road by 2030.
According to the latest report, Amazon increased its use of renewable energy from 42% across its operations in 2019 to 65% last year, making it the world’s largest buyer of renewable energy.
Last year also saw a huge pandemic-fueled rise in demand for Amazon’s services including delivery and Prime Video, and last year more companies turned to its cloud arm, Amazon Web Services. The company, which employs more than 1 million people worldwide, posted record revenue of $386 billion last year.
But while overall emissions rose along with revenue, Amazon said its efforts and changes in consumer behavior during the pandemic blunted the overall impact on emissions, resulting in a reduction in carbon intensity. Carbon intensity is a metric that quantifies total carbon emissions, measured in grams of carbon dioxide equivalent, per dollar of gross merchandise sales.
By this metric, overall carbon intensity decreased 16% since 2019, from about 123 grams per dollar of sales to 103. That’s up from a 5% reduction in 2019.
The company says this reduction is “in line” with targets it is developing through a nonprofit group that works with companies reducing their emissions, the Science Based Targets Initiative. Amazon joined the initiative this June.
Nearly half of these improvements result from investments in renewable energy and enhancements in “operational efficiency.” The metric also accounts for changes in customer behavior, and a third of the improvement is a result of more people ordering food and other goods online, instead of trekking to physical stores.
The largest source of carbon emissions fell under a category called “corporate purchases and Amazon-branded product emissions” that covers Amazon-branded product manufacturing, device use and disposal, operating expenses, and business travel. The second-largest source was from “other indirect emissions” such as third-party transportation and packaging.
“While we are still in the early phase of decarbonizing our business, we are pleased to see meaningful progress in several areas,” Amazon said in the report. “We will continue to rapidly scale our investments in carbon reduction solutions that have large, long-term impacts.”
The company also says that unlike in the past year, growth in its business will not result in a surge in total emissions in the future. “As these investments become embedded across our business, our carbon emissions will continue to decouple from our business growth,” according to the report. “Eventually, we will reach a point where the absolute carbon emissions of our business will drop, even as our business itself grows.”
Greenhouse gas emissions reported by the company underwent independent review by a third-party auditor, the engineering and consulting firm Apex. Apex noted that while the determination of emissions is the sole responsibility of Amazon, Amazon established appropriate systems for collecting and analyzing their data and they found no evidence that Amazon’s greenhouse gas estimates were incorrect.
Last year the company said it used 232 wind and solar projects to power its operations. It also continues to electrify its delivery fleet with plans to get 10,000 Rivian vehicles on the road as early as next year. Amazon also unveiled a $2 billion fund to invest in startups building sustainable technology—and it won naming rights to Seattle’s Climate Pledge Arena.
Amazon founder Jeff Bezos last year launched his own $10 billion Bezos Earth Fund that will issue grants aimed at addressing climate change.
Amazon’s announcement of the Climate Pledge, which has attracted more than 100 other signatories, came amid public pressure from the group Amazon Employees for Climate Justice, which urged the company to set more specific goals on climate change.
The annual report from Seattle-based Amazon emerges just days after the Pacific Northwest emerged from a massive “heat dome” that generated unprecedented high-temperature records throughout the region, an off-the-charts event that scientists say was made much more likely by a changing climate.