Amazon.com is challenged by an activist shareholder to document how it's dealing with climate change and its environmental footprint.
Amazon.com has been talking up the “green” side of online shopping, claiming that “e-commerce is inherently more environmentally friendly than traditional retailing.”
But an activist shareholder is pressing the company to document just how eco-conscious it is.
Calvert Asset Management, of Bethesda, Md., thinks Amazon should release a report within six months describing the impact of climate change on its business, as well as the impact of its business on climate change.
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Whether or not Amazon stockholders agree with Calvert is expected to be revealed Tuesday at the company’s annual meeting in downtown Seattle.
Amazon’s board urged shareholders to reject the proposal, saying that preparing such a report would not be “an efficient use of time and resources.”
The board notes that Amazon already has taken steps to reduce its environmental footprint, such as introducing eco-friendly packaging and print-on-demand technology, which eliminates excess inventory. These and other steps are described in a section of the company’s website called “Amazon and Our Planet.”
The board also says Amazon will “continue to innovate in this area over time.”
Still, Calvert says it wants more disclosure from Amazon about how it’s dealing with climate change. Calvert believes that climate change could affect many parts of Amazon’s operations — everything from the availability of raw materials in the products it sells to the reliability of its distribution network.
Calvert represents more than 400,000 investors holding $14.6 billion in assets under management, including 331,318 Amazon shares worth about $62 million.
“We own this company and want it to do well, so we wouldn’t want any poor performance to come from the release of a document,” said Rebecca Henson, sustainability analyst at Calvert. “We just think it’s something that would be beneficial and could save money in the long run.”
Calvert points out that 70 percent of S&P 500 companies, including eBay, Apple and Target, provide the type of information sought from Amazon. What’s more, Calvert calls out two of Amazon’s fastest-growing businesses as proof that the company has more of an environmental impact than meets the eye.
Amazon Web Services, for instance, relies on data centers to store massive amounts of electronic information. These centers, Calvert says, “require significant amounts of energy to power cooling system infrastructure.”
Amazon’s Kindle contains plastics, metals and chemicals. But unlike Apple, which makes the iPad, Amazon does not disclose any information about the environmental footprint of its e-reader, Calvert says.
“A company doesn’t need to have giant smokestacks or offshore oil rigs to be contributing to climate change,” said Henson.
Two major proxy advisory services are split on Calvert’s proposal.
Glass Lewis & Co. recommended a vote against, saying that many of Amazon’s businesses, such as its online downloads of books and music, “are generally less emissions-intensive” than traditional forms of retail.
Glass Lewis also notes Amazon is ahead of peers such as Netflix and Priceline because at least it details green initiatives on its website.
But ISS, another proxy advisory firm, says Amazon stockholders would benefit from knowing more about its climate-change strategy.
In the end, the proposal’s fate rests with institutional investors such as mutual funds, and a single major stockholder: Amazon founder, CEO and Chairman Jeff Bezos, who owns almost 20 percent of the company’s stock.
“We’re hopeful it will get a strong vote,” Henson said. “But more importantly, we’re confident it will be seen by the company’s management as a sign that this is an area they’ll want to address.”
Amy Martinez: 206-464-2923 or email@example.com