Amazon to Require ESG Reporting on Supply Chain Emissions in 2024
Photo by Christian Wiediger on Unsplash
This month, Amazon published its 2022 Sustainability Report. This report touches on renewable energy, electric fleets, waste, total emissions including supply chain emissions, sustainable design, supplier diversity, human rights, and sustainable products, clearly highlighting how the company is building a more sustainable future. One of the most notable highlights is Amazon’s decision to update its supply chain standards to require regular reporting and emissions goal setting. The decision to require reporting within their supply chain is one that is likely to create change across the board. Let’s dive in!
In a summary of the report published by Amazon’s VP and Head of Worldwide Sustainability, Kara Hurst, we are given 9 key takeaways from the 82-page report. These highlights include:
Powering our operations with renewable energy with new wind and solar farms
Growing our fleet of electric and sustainable delivery options
Minimizing waste and excess packaging
Reducing supply chain emissions
Lowering our total emissions footprint and carbon intensity as the business grows
Designing data centers with a lower carbon footprint
Offering customers more sustainable product choices
Respecting human rights with responsible business conduct
Advancing supplier diversity
Looking specifically at highlight #4 We see a massive commitment to supply chain reporting that is going to affect Amazon’s entire supply chain. With a goal of reaching net zero by 2040 Amazon has some big changes to make to reduce their carbon footprint across the entire business. With a vast global supply chain, this is going to be a focus moving forward as mitigating their scope 3 impacts is going to be integral to reaching net zero. To do this, beginning next year, Amazon will update their supply chain standards “to require regular reporting and emissions goal setting.” Hurst writes, “We’ll also use our scale, investment, and innovation to date to provide our suppliers with products and tools that will help them reach their goals — whether those are transitioning to renewable energy or increasing access to sustainable materials.”
This decision by Amazon is not one we see in every organization. However, big companies like Walmart have recently begun pushing for more transparency in their supply chain, it only makes sense that Amazon would want to do the same. Currently, the specific details of the required disclosures have not been shared. Amazon has outlined two specific objectives in its efforts toward sustainability. First, the company aims to leverage its size and influence to support businesses committed to decarbonization. They plan to provide these businesses with products and tools to track and reduce emissions. Moreover, Amazon has pledged to assist specific suppliers in transitioning to carbon-free electricity usage.
Second, Amazon will prioritize suppliers that offer innovative products capable of aiding emissions reduction, not only for Amazon but for other companies as well. The company will actively seek partners whose contributions align with its vision of decarbonization as they explore new business opportunities, according to its sustainability report.
While there is a lot more to dig into in this report, and we recommend you take a look through this link, the requirement of supply chain disclosures is going to have monumental effects. With some of the biggest companies in the world now clearly prioritizing sustainability and ESG, it is clear that the rest of the world will need to follow suit. While Amazon has a plethora of resources, this will certainly be a challenge for smaller companies and will require innovative and agile solutions.
Photo by Daniel Eledut on Unsplash
Sources:
GreenBiz: Title: "Get ready: Amazon will ask supply chain to report emissions starting 2024" URL: https://www.greenbiz.com/article/get-ready-amazon-will-ask-supply-chain-report-emissions-starting-2024
Amazon: Sustainability Report 2022 URL: https://www.aboutamazon.com/news/sustainability/amazon-sustainability-report-2022
Amazon: 2022 Sustainability Report (PDF) URL: https://sustainability.aboutamazon.com/2022-sustainability-report.pdf
