Just in time to coincide with the Global Climate Strike, Amazon (NASDAQ:AMZN) is launching The Climate Pledge, its own promise to meet the goals of the Paris Agreement by 2040, 10 years ahead of time.
The tech giant co-founded The Climate Pledge with Global Optimism, a group founded by a former U.N. climate official, in the hope that other companies will sign on to the agreement. According to its statement, Amazon is aiming to:
- Reach net zero carbon emissions across the company by 2040, 10 years earlier than the signatories to the Paris Agreement have committed to.
- Derive 80% of its energy needs from renewable sources by 2024, and go 100% renewable by 2030. Amazon said 40% of its energy usage would be renewable by the end of this year.
- Make 50% of its shipments net zero carbon by 2030, with the ultimate goal of making all of its shipments net zero carbon, though it didn't set a date for completion.
While Amazon may be presenting The Climate Pledge as if it comes purely out of the company's own goodwill, the truth isn't that simple. At least 1,500 Amazon employees were planning to walk off the job Friday to protest the company's massive carbon footprint and its lack of accountability on the environment. CEO Jeff Bezos announced the pledge in Washington with former U.N. climate chief Christiana Figueres, saying, "Meeting these goals is something that can only be done in collaboration with other large companies because we're all part of each other's supply chains," adding, "We're done being in the middle of the herd."
In a statement on social media, Amazon's striking workers celebrated the move, but also promised to walk out on Friday, saying there is much work to be done.
Reputation management 101
While Amazon's move is certainly a step in the right direction for its own environmental responsibility, the decision to launch The Climate Pledge may be geared more to burnish the company's own reputation than to actually lead a group of companies to a greener future. In fact, it's just the latest example of Amazon responding to criticism both inside and outside its own ranks on a range of issues.
In terms of environmental responsibility and accountability, Amazon actually lags behind its retail peers, at least in some ways. According to CDP, an nonprofit formerly known as the Carbon Disclosure Project, Amazon has resisted reporting its carbon footprint to the group the way other companies have, and Bruno Sarda, the president of CDP North America, called Amazon's Climate Pledge "unnecessary," according to The Washington Post, as he said such carbon-reporting standards already exist. Amazon is also the only major retailer that hasn't reported through the CDP, and Sarda said the pledge doesn't adequately account for what's disclosed and measured.
The Climate Pledge also fits a pattern we've seen from the company over the past year. Recognizing that its long-term reputation matters and that it's increasingly become a lightning rod for criticism, Amazon reacts to such criticism and changes. Last year, after calls from Sen. Bernie Sanders, of Vermont, and others to raise its minimum wage to $15/hour, Amazon did just that. However, some warehouse workers were upset that Amazon was also ending bonus and stock grant programs, meaning some workers could make less.
Later, in his annual letter, Bezos called on other retailers to match the $15/hour minimum. The taunt, similar to what the company's done with The Climate Pledge, puts Amazon in a can't-lose position and its competitors, which pretty much make up the entire business world at this point, on the defensive. If they join Amazon, they are playing by its rules and making it look good for persuading other companies to meet popular demands to become better corporate citizens. If they ignore Amazon, they appear to be ceding the moral high ground to the e-commerce giant.
In another example, Amazon recently began opening its warehouse to tours to the general public after waves of criticism that it denied workers bathroom breaks and ran a grueling operation that leads to high rates of injuries and illness.
Can Amazon satisfy the critics?
Amazon has long been a darling of both customers and investors, but the company has struggled in the public eye lately. Its retreat from opening one of its new headquarters in New York was just one of many reminders that the tech giant has its fair share of detractors and skeptics.
Bezos and Amazon are wise enough to understand that it's crucial for the company to have a good reputation with stakeholders beyond its customers and investors. That explains The Climate Pledge, as well as the minimum wage hike, and the warehouse tours, but Amazon will have to get used to the criticism.
The company is one of the biggest in the world, run by the richest person in the world, and its tentacles stretch from retail to tech to logistics and even to industries such as healthcare. Amazon will continue to court controversy as it grows and expands, but initiatives like The Climate Pledge can help persuade the public that it intends to be a good corporate citizen. If Amazon is able to do that, and meets it goals, it will be a success.