Amazon's latest sustainability report faces internal criticism for using renewable energy certificates of questionable quality and is suspected of greenwashing. (Photo: Amazon)
Amazon has released the 2023 Sustainability Report, highlighting a significant milestone of achieving 100% renewable energy use, seven years ahead of its 2030 target. However, this achievement has been met with skepticism from within the company.
Employees have raised concerns about the authenticity of Amazon's green energy claims, accusing the company of "greenwashing" by using renewable energy certificates (RECs) with questionable environmental benefits. Additionally, there are worries that the expansion of Amazon Web Services (AWS) data centers could lead to a surge in carbon emissions.
Heavy reliance on low-quality RECs
Amazon boasts of investing in over 500 wind and solar projects worldwide, worth billions of dollars. These projects are meant to power Amazon's data centers, office buildings, retail stores, and logistics centers in 27 countries, equating to the energy use of approximately 7.6 million households. For the fourth consecutive year, Amazon claims the title of the world's largest purchaser of renewable energy.
However, Amazon's assertion of using 100% renewable energy does not mean that all its operations are directly powered by renewable sources. Instead, the company purchases an equivalent amount of renewable energy and feeds it into the public grid, acquiring Renewable Energy Credits or Renewable Energy Certificates in the process. This method allows them to match their energy consumption with renewable energy production.
According to a report by RECCESSARY, this approach, known as unbundled RECs, offers lower additionality, meaning there is a higher risk of overestimating or double-counting the environmental benefits.
The group "Amazon Employees for Climate Justice" accused Amazon of misleading the public, claiming that 68% of the RECs Amazon relies on come from low-quality sources, and only 22% of the data centers in the U.S. are genuinely powered by renewable energy.
As employees, we’re outraged with Amazon's misleading announcement today that “Amazon meets 100% renewable energy goal 7 years early." We estimate that in the US, Amazon actually only gets 22% renewable energy from the local utilities where its data centers operate. pic.twitter.com/kkqYRq3sVc
— Amazon Employees For Climate Justice (@AMZNforClimate) July 10, 2024
Concerns over AWS data center emissions
The employees' statement further criticizes Amazon's portrayal of its data centers as “being surrounded by wind and solar farms.” They argue that despite heavy investment in expanding data centers, Amazon remains heavily dependent on coal from West Virginia, oil from Saudi Arabia, and natural gas from Canada.
Amazon is not alone in claiming 100% renewable energy use through RECs, as competitors like Microsoft and Google are also expanding their data centers. To maintain its leadership in cloud services with AWS, Amazon plans to invest $150 billion over the next 15 years.
This massive investment has raised concerns about potential shortages in clean energy. The rush to build data centers may outpace the development of essential energy infrastructure, and the high energy demands of AI could lead to increased carbon emissions. There are also reports that Amazon may turn to nuclear energy to meet the electricity needs of its data centers.
Rising fossil fuel reliance despite emission reductions
Amazon's report highlights a 3% reduction in absolute carbon emissions in 2023, marking the second consecutive year of decrease. This includes an 11% reduction in Scope 2 emissions (energy-related) and a 5% reduction in Scope 3 emissions (supply chain-related). The primary reasons cited are excess warehouse capacity post-pandemic and a $10 billion reduction in AWS data center spending, resulting in a 13% decrease in capital goods-related emissions.
Amazon's report shows a 3% reduction in overall carbon emissions for 2023, whereas Scope 1 emissions increased by 7% over the previous year. (Unit: million tonne)
However, the report also reveals a 7% increase in Scope 1 emissions, primarily from Amazon's extensive logistics network, which relies heavily on fossil fuels. Despite its efforts to decarbonize its delivery fleet, an anonymous software development manager within the company stated that 98% of the company's vehicles still use gasoline or diesel, and air freight operations are similarly fossil-fuel dependent.
In 2023, Amazon quietly abandoned its "Shipment Zero" goal, which aimed for 50% of shipments to be net-zero emissions by 2030, and withdrew from the Science Based Targets initiative (SBTi) after failing to validate its climate commitments. Amazon's Climate Change score on the Carbon Disclosure Project (CDP) fell short of competitors like Microsoft and Google, receiving a "B" rating, indicating insufficient transparency.
Amazon's response and future plans
In response to criticism, Amazon remains committed to achieving net-zero emissions by 2040, emphasizing the transparency and accuracy of the data in its report, which has been verified by third-party auditors.
Amazon plans to continue its carbon reduction efforts and has launched the Sustainability Exchange platform to help other companies reduce their climate footprint, while prioritizing partnerships with suppliers committed to decarbonization.
Amazon is also developing a new carbon credit standard named Abacus with the carbon verification body Verra, bypassing the current leading body, the Integrity Council for the Voluntary Carbon Market (ICVCM)—a non-profit funded by Amazon founder Jeff Bezos. This move could potentially enhance liquidity in the carbon credit market.
Amazon argues that the existing carbon credit market is fragmented, complex, and opaque. Therefore, the company plans to establish its own carbon credit standard, especially in nature-based carbon removal credits from forest restoration and other areas to prevent carbon leakage, which has reportedly garnered interest from Google, Meta, and Microsoft.
As the world's largest e-commerce company, Amazon's sustainability initiatives are under intense scrutiny, and its actions significantly impact global efforts to combat climate change. The company's journey towards sustainability is ongoing and evolving, highlighting the complexities and challenges of corporate responsibility in the modern world.
Source: Amazon, New York Times, Bloomberg, Business Insider, New Stack, Reuters
