We’re living in interesting times. There’s a massive transformation going on towards sustainability. In this article we shall take a closer look at Amazon corporate social responsibility programs. It is essential for larger companies like Amazon to establish themselves as sustainability leaders. This would encourage smaller firms to follow the suit.
Amazon – the largest online marketplace
Amazon was founded in the year 1994 in Seattle, United States of America. When Jeff Bezos founded this company, he wanted to create an online marketplace for the books. However. As the company grew, it expanded its business into different products. Amazon has also entered totally unrelated businesses like cloud computing, and artificial intelligence. We are also enablers of future technologies in the industry 4.0 revolution.
This publicly traded company generated a revenue of around 280 billion dollars in the year 2019. This figure is more than the GDP of many countries. This scale of operations does not come without criticisms. Some of the major criticisms against Amazon stems from the following actions:
- Environmental degradation due to the massive scale of packaging.
- Other activities that lead to carbon footprint like logistics, manufacturing.
- Massive energy consumption at their headquarters offices and cloud servers.
- Data privacy issues.
- Promoting hyper consumption and culture of mindless purchases.
- Toxic work culture
The CSR agenda for Amazon
In fact, some 400 odd employees went on record to state their discomfort over the environmental degradation. Moreover, it comes when Amazon has very strict policies against speaking publicly against the company. From the company’s perspective, it is also very difficult to measure the true impact of its entire operations globally.
Amazon has some arguments against the criticism about environmental damage. Firstly, the online retailers offset some of the carbon footprint because people don’t have to travel. The amount of fuel saved when people shop online offsets a lot of the environmental degradation due to the packaging. However, a counter argument against this argument is that people tend to purchase much more than they would through an offline channel.
The company has also cited its pro environmental programs as its defense. It is one of the world’s few companies that have pledged to go carbon neutral by 2040. This is a full decade before the official mandate as part the Paris agreement. Now we shall look at the overview of some of the key CSR programs from Amazon.
Top sustainability commitments made by Amazon Inc
100% renewable energy
Amazon has pledged that it would be using 100% renewable energy by the year 2025. This could have major impact on the environment. In their annual report, they have mentioned that they already have around 91 solar farms and wind farms. Which produce about 3000 megawatts of energy. There’s also a drive towards greener cloud centers across the different cloud providers.
Reduction in water consumption
Water is the second area of concern after electricity. It is especially true for the enterprises than individuals. Firstly, let us understand how water usage is an issue at the Amazon datacenters. Amazon is one of the leading providers of cloud services. They do it through their Amazon Web Services or AWS platform. These datacenters house powerful computers. Powerful computers also mean, huge amounts of energy. Some of this energy gets dissipated in the form of heat around these servers. It is here that water comes to the rescue. Without getting into technical details, reducing water consumption at Amazon requires an increase in thermal efficiencies through smarter designs. Secondly, they also use recycled water for cooling.
Net carbon zero company
This is another big pledge made by this company. Amazon has promised to go completely carbon neutral by the year 2040. This is a big challenge for any company. In fact, this is a Mega Challenge for a company the size of Amazon. However, if we breakdown this challenge into smaller components, it can be achievable. Amazon needs to look at the different segments of its businesses and treat them one by one.
Zero carbon footprint for shipments
This is another big promise made by this company. Amazon would be making all its shipment as net carbon zero through its shipment zero program. They have projected that they would have around half of their shipments without a carbon footprint by 2030. This part of their promise is extremely difficult to fulfill. What Amazon promises is that the entire carbon footprint of shipment would be offset or zero. There are many different steps that are involved in the shipment process. A product needs to be picked up from the shelf. It needs to be packaged. It needs to be transported and then it needs to be delivered at the last mile. All of these steps have some carbon footprint. However, their foray into reducing the shipment carbon footprint is rather appreciable.
Creation of climate related funds
Amazon firstly created 100-million-dollar fund for reforestation efforts. They also plan to invest in a 2 billion dollar fund for development of new technologies that would preserve our natural resources. The 100 million dollar fund would be used to conserve forest areas and wetlands around the world. This money would be used to create a corpus of funds for immediate use. We have witnessed major fires at Amazon and in Australia. If Amazon can be a part of the solution process to this challenge, it would be really helpful in preserving the natural resources.
Optimization of delivery
Delivery takes a large chunk of the total carbon footprint. In the near future, Amazon plans to use AI and other efficient delivery mechanisms to reduce the fuel. They also plan to use electric delivery vehicles. In fact, they have placed an order for 100,000 electric delivery vehicles. The delivery optimization is a subset of the shipment zero program. They have been testing drone delivery for quite some time now. However, their purchase of 100,000 electric vehicles would change the game. However, this process would take almost a decade.
As an immediate measure, they have deployed about 1800 electric vehicles in Europe. Amazon has partnered with Mercedes Benz to incorporate electric delivery vans in its fleet. Mercedes claims that their delivery vehicle eVito is a zero emissions vehicle. This may be true about the tailpipe emissions. However, electric vehicles may also have upstream emissions if the energy to charge them does not come from the renewable energies.
Some unsolved CSR issues of Amazon
Although Amazon has taken a lot of steps towards positive CSR, Still a lot of ground needs to be covered. One of their major criticism has been their toxic work environment. There have been murmurs, muffled voices as well as loud cries against the culture. Employees have complained of being made to overwork. The managers have been criticized for having difficult demands on their employees.
This kind of work culture is not sustainable in the long run. Another company that got flagged was Tesla Motors. Human beings are not mindless agents or mare robots. Employees deserve dignity, respect and a good work life balance. Let us hope that Amazon also looks into the wellbeing of their employees in future.
Secondly, Amazon still refuses to release the figures for energy consumption. Other cloud service providers have taken steps to release their energy consumptions. In fact, some major clients like Netflix specifically asked Amazon to disclose exact electricity usage for their services. However, Amazon refused to reveal this information.
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