Ecommerce giant Amazon’s carbon emissions increased in 2021 as the company expanded its operations to meet the increased demand following the COVID-19 pandemic. The expansion of operations by the company resulted in emissions equivalent to 71.54 million tonnes of carbon dioxide in 2021, which indicated an increase of 18% over that in 2020 and a 40% increase over that in 2019. However, Amazon was able to reduce its carbon intensity, which measures emissions per dollar of sales, by 1.9% in 2021 in comparison to a 16% decline in 2020.
Emissions Fueled by COVID-19 Pandemic
The outbreak of the COVID-19 pandemic resulted in an increase in orders at Amazon and other ecommerce companies. Many people preferred online shopping to prevent the risk of exposure to the coronavirus. The spurt in demand forced Amazon to expand its logistics network of delivery vans, planes, and trucks. The company also rapidly established new warehouses to process the large number of orders. According to Amazon, at the end of 2021, it doubled the size of the fulfillment network it developed over the last 25 years. The company also added more data centers to promote Amazon Web Services, as the pandemic accelerated the transition of businesses to the cloud. All these factors took a toll on the company’s emission targets.
Amazon’s Carbon Neutrality Goal
In 2019, Amazon announced its climate pledge to become carbon neutral by 2040. As part of the strategy, the company acquired 100,000 electric delivery trucks from Rivian Automotive, which it intends to deploy on roads in the US by 2030. It established a $2 billion venture capital fund to invest in cutting-edge climate technology, some of which it could adopt to help meet its sustainability objectives. In addition to reducing emissions by using electric vehicles and adopting other operational measures, the company intends to purchase credits linked to projects that absorb carbon from the atmosphere.
Challenges
Despite Amazon’s efforts to decrease its carbon footprint and its ability to reduce its carbon intensity, its emission levels increased. Concerns have also been raised over the way the company assesses its environmental performance. With the exception of its private-label products, Amazon, unlike other retailers such as Walmart Inc. and Target Corp., does not account for the emissions that are generated during the manufacture of the products it sells. Third-party sellers are left to handle their carbon emissions accounting separately whether or not such transactions are completed through Amazon’s warehouses. However, many of these sellers are not likely to fulfill the requirement of emissions reporting.
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