Amazon's Push for Lower Carbon Emissions
A New Era for Sustainable Supply Chains
Author: Paula Cope
In a significant move toward sustainability, Amazon is raising the bar for its suppliers by requiring them to reduce their carbon emissions. This new demand reflects the company’s broader commitment to becoming a net-zero carbon entity by 2040, as part of its Climate Pledge. With its vast network of suppliers worldwide, Amazon’s latest initiative could have far-reaching impacts across multiple industries.
The Background:
Amazon’s Climate Pledge Amazon, the global e-commerce and cloud computing giant, has been under increasing scrutiny for its environmental footprint. In response, the company launched the Climate Pledge in 2019, committing to reach net-zero carbon by 2040, a decade ahead of the Paris Agreement’s goals. The pledge includes a series of initiatives, such as transitioning to 100% renewable energy by 2025, deploying electric delivery vehicles, and investing in reforestation and renewable energy projects. However, Amazon recognises that its own operations are just one piece of the puzzle. A significant portion of its carbon footprint comes from its vast network of suppliers. To address this, Amazon is now taking concrete steps to ensure that its suppliers also contribute to the reduction of carbon emissions.
New Requirements for Suppliers Amazon's latest mandate for its suppliers involves several key components:
1. Carbon Footprint Reporting:
Suppliers are now required to regularly report their carbon emissions data to Amazon. This move is intended to increase transparency and allow Amazon to monitor and manage its overall supply chain emissions more effectively.
Suppliers are now required to regularly report their carbon emissions data to Amazon. This move is intended to increase transparency and allow Amazon to monitor and manage its overall supply chain emissions more effectively.
2. Emission Reduction Plans:
In addition to reporting their carbon footprints, suppliers must also submit detailed plans outlining how they intend to reduce their emissions over time. These plans should align with Amazon’s broader environmental goals and demonstrate a clear commitment to sustainability.
In addition to reporting their carbon footprints, suppliers must also submit detailed plans outlining how they intend to reduce their emissions over time. These plans should align with Amazon’s broader environmental goals and demonstrate a clear commitment to sustainability.
3. Compliance with Science-Based Targets:
Amazon is pushing its suppliers to adopt science-based targets (SBTs) for reducing greenhouse gas emissions. SBTs are goals set by companies to reduce their emissions in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement—limiting global warming to well below 2°C above pre-industrial levels, and ideally, to 1.5°C.
Amazon is pushing its suppliers to adopt science-based targets (SBTs) for reducing greenhouse gas emissions. SBTs are goals set by companies to reduce their emissions in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement—limiting global warming to well below 2°C above pre-industrial levels, and ideally, to 1.5°C.
4. Sustainability as a Factor in Supplier Selection:
Amazon is incorporating sustainability performance into its supplier selection process. Suppliers that demonstrate strong environmental stewardship, including a commitment to reducing carbon emissions, may be prioritised over those that do not.
Amazon is incorporating sustainability performance into its supplier selection process. Suppliers that demonstrate strong environmental stewardship, including a commitment to reducing carbon emissions, may be prioritised over those that do not.
Impact on the Supply Chain
These new requirements are likely to have a significant impact on Amazon’s supply chain, which includes thousands of companies across various industries. Suppliers, particularly those in energy-intensive sectors such as manufacturing, may need to make substantial investments in energy efficiency, renewable energy, and emissions reduction technologies to meet Amazon’s demands. Moreover, smaller suppliers that lack the resources to invest in sustainability initiatives may find it challenging to comply with the new requirements. This could lead to a restructuring of Amazon’s supplier network, with a potential shift toward larger, more sustainable suppliers that can meet these rigorous standards.
A Catalyst for Industry-Wide Change?
Amazon’s decision to impose stricter carbon emissions standards on its suppliers could also serve as a catalyst for broader change across the industry. As one of the world’s largest companies, Amazon’s actions are closely watched by other businesses and industry leaders. By setting high standards for sustainability, Amazon may inspire other companies to adopt similar practices, leading to a ripple effect across global supply chains. In addition, these new demands could accelerate innovation in sustainable technologies and practices. Suppliers seeking to meet Amazon’s requirements may invest in new technologies, such as carbon capture and storage, renewable energy, and energy efficiency measures, driving progress in these areas.
Conclusion
Amazon’s new demands on its suppliers to curb carbon emissions represent a significant step forward in the company’s sustainability journey. By holding its suppliers accountable for their environmental impact, Amazon is not only reducing its own carbon footprint but also pushing for systemic change across global supply chains. As the world moves closer to the critical climate milestones of 2030 and 2050, such initiatives are essential in the collective effort to combat climate change. Amazon’s leadership in this area could set a new standard for corporate responsibility, with far-reaching implications for industries worldwide.
If you are a small business supplier to Amazon and want to continue working with them contact us and we can help you calculating your carbon emissions and we can create a reduction plan for you. Take a step now towards becoming a sustainable business and stay ahead of your competitors.
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