While Amazon has set some ambitious climate-related goals, observers say it has been among the least transparent of its competitors in disclosing how and when it intends to meet them.
Storm-driven data-center outages, production disrupted by flooding, forest-fire smoke choking workers at the corporate headquarters — already in 2018, Amazon has experienced at least a half dozen notable disruptions to its operations connected to climate change, according to a group of employees urging the company to be more transparent with its response to the global threat.
About 16 Amazon employees, who are also company shareholders thanks to stock-based compensation, have filed a shareholder resolution asking the company’s board of directors to publicly report on how the Seattle-based commerce giant “is planning for disruptions posed by climate change, and how Amazon is reducing its company-wide dependence on fossil fuels.”
While Amazon has taken steps toward reducing its carbon emissions and even has set a goal to one day power all of its global infrastructure with renewable energy, some employees and observers don’t think the company has gone far enough, fast enough. But they can’t tell for sure, and see its recent actions — such as procuring a fleet of 20,000 diesel-powered delivery vans — as unconvincing.
“It’s pretty clear immediately that they’re the least transparent” of the big tech companies, said Rebecca Deutsch, with climate-advocacy group 350 Seattle, which has parsed the climate disclosures and policies of several major corporations and estimated Amazon’s delivery-related emissions. “Based on what they’ve released so far, they’re the furthest behind in trying to transition off of fossil fuels.”
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The employees behind the shareholder resolution think Amazon’s scale, innovation-driven culture and long-term mindset uniquely position the company to address the climate crisis.
“We’re in a position as Amazon employees where we can push for Amazon to be a leader in the climate space,” said Weston Fribley, a software engineer in Seattle, who joined in filing the resolution. “We think that by having a group of co-filers, we’re showing how broadly felt this concern is within Amazon.”
The employees cite the company’s “ownership” principle – one of the 14 leadership tenets meant to guide Amazon executives – as an impetus for considering climate risks. That principle says in part that leaders “think long term and don’t sacrifice long-term value for short-term results.”
Amazon has vowed to run more of its operations with renewable energy and reduce packaging waste as part of a broader sustainability effort. For example, in the next two years it plans to double to 50 the number of fulfillment centers equipped with solar-power systems, and it is constantly working to optimize its transportation network and create technologies that can reduce the company’s environmental impact, according to a statement from Kara Hurst, Amazon’s director of worldwide sustainability. It appears to be an area of growth for the company, which lists some 28 job openings related to sustainability.
But, as the employees note in their shareholder resolution, “Coal still powers Amazon data centers. Diesel, gasoline and jet fuel still power package delivery.”
Fribley said Thursday is the deadline to submit shareholder resolutions ahead of the company’s May annual meeting. He hopes more employees will step forward as co-filers.
After the deadline, Amazon could challenge the resolution, which would prompt a ruling from the Securities and Exchange Commission (SEC). The company did not comment directly on the resolution, which is nonbinding, like most shareholder resolutions.
Even so, said Fribley, a positive result could indicate the importance of the issue to investors.
Deutsch said Amazon’s climate disclosures so far amount to “anecdotal PR: not a full picture, not a full context.” That stands in contrast to its competitors in technology, retail and logistics, which do fuller and more meaningful disclosure, she said, citing Google, Microsoft, Apple, Walmart and large shipping companies.
The Climate Risk Disclosure Project, which evaluates what companies say in securities filings about a variety of environmental impacts, ranks Amazon in the 15th percentile of Russell 3000 index companies for disclosure.
350 Seattle undertook its own effort to quantify the carbon emissions from Amazon’s 2017 global-shipping operations, based on data the company discloses about the number of packages it delivered to Prime Members and publicly available data from UPS and FedEx – major Amazon suppliers that disclose average emissions per package.
The group came up with an estimate of 19.1 million metric tons of carbon emissions – equivalent to a year’s worth of pollution from 4.7 coal-fired power plants, Deutsch said.
Greenpeace, which has monitored the movement of Internet companies toward carbon-free electricity since 2010, wrote in a report released in early 2017 that while Amazon Web Services has taken some important steps, its “continued lack of transparency and its rapid growth in Virginia and other markets largely served by dirty energy” makes it “unclear whether the AWS cloud is actually on a path to becoming renewably powered.”
AWS received an overall grade of “C” in that report — dragged down by an “F” for transparency — compared to “A” grades for Google, Apple, Facebook, and a “B” for Microsoft.
Meanwhile, Deutsch and others said, Amazon’s recent actions paint a picture of a company that hasn’t yet taken the true scale of the climate challenge to heart.
She cites as an example Amazon’s recently launched delivery-service partner program, for which it has procured 20,000 diesel-powered Mercedes-Benz vans to lease to individuals. “There are electric vans available right now,” she noted.
Amazon presented that delivery-service partner program as a way to enable thousands of people to start their own independent businesses serving its logistics needs.
That model raises questions about how much of Amazon’s massive logistics operation should be counted on its own emissions ledger. Should Amazon count emissions from those Mercedes vans or other outside providers that carry its packages for part of the journey from factory to customer, or can it exclude them because the emissions came from the tail pipes of third-party contractors?
Deutsch said it’s clearly in Amazon’s power to dictate climate practices of its suppliers, but so far there’s no evidence that it has negotiated with delivery suppliers on emissions or other pollution issues.
And while Amazon has set a goal of 100 percent renewable energy, it hasn’t said when or how it intends to achieve that target.
“Goals without dates are basically meaningless because we don’t know if it’s going to be in time for what the science tells us,” Deutsch said.
The latest report from the Intergovernmental Panel on Climate Change, a distillation of the best science on the crisis, found that greenhouse-gas emissions must be cut 45 percent below 2010 levels by 2030 and brought to zero by 2050 to preserve a chance of holding global-average temperature increases to 1.5 degrees Celsius – a level of warming that is still expected to cause major, disruptive changes to the Earth’s climate and widespread suffering and loss of life.
But allowing temperatures to rise 2 degrees Celsius will be much worse, with “dire consequences to human health, food security, water security and all the pending human-rights issues and conflict that comes with the destabilization of these basic resources,” said Dr. Sarah Myhre, a University of Washington Earth and ocean scientist and climate-change expert. The speed with which governments and big businesses act will make a difference, she said.
“The business model of Amazon is one of deadlines and deliverables,” she said. “They have the capacity to think strategically about this.”
In virtually all scenarios, sea level rise and increasing storm severity accelerated by past emissions already accumulated in the atmosphere threaten to bring more regular and extreme flooding to many coastal and low-lying areas.
Parts of the New York City neighborhood where Amazon is placing one of its two new $2.5 billion East Coast employment hubs, after its year-plus HQ2 search, were inundated by Hurricane Sandy in 2012.
“Low-lying places will become inundated more frequently, and storm frequency and intensity will increase,” Myhre said. “So places that have already been impacted by extreme events and sea-level rise … those are the places that will be impacted severely moving forward.”
The word “climate” appears twice in Amazon’s fall 2017 request for proposals from North American cities for major expansion sites to house up to 50,000 new employees. “A stable and consistent business climate is important to Amazon,” the request said.
The company said Monday that climate change was indeed part of its HQ2 decision-making process, and that it is designing its Long Island City campus in keeping with a neighborhood plan accounting for climate effects and exceeding criteria recommended by the Federal Emergency Management Administration.
Fribley, 30, said he and many of his colleagues feel a deep sense of urgency that has only grown stronger in the last two to three years in the face of climate impacts such as the ongoing drought and forest fires in California and smoke-filled summer skies in Seattle.
“I see my generation as probably the last generation that can really mitigate the worst of what’s coming,” he said.
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