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Amazon’s $2 billion Climate Pledge Fund has announced a new tranche of investments designed to help Amazon meet its goal of net zero carbon emissions by 2040 – 10 years ahead of the Paris Climate agreement.
The finance needed to address climate change is a challenging subject. The UN recently announced that with current commitments, we are likely to see emissions rise by 16% by 2030 (against 2010) rather than the 50% cuts that have been estimated as necessary if the world is to stay on track for net zero 2050. Public funding for action has been significantly challenged by the economic impacts of COVID and it has been announced that a key element of the agreement, $100 billion a year in finance from developed to developing countries from 2020, has not been reached – and won’t be before 2023.
That means that the private sector is going to need to fill that gap. While global standards around impact, social and environmental performance will be key to realigning the global financial system towards a net zero future, some companies are already beginning to act. One example is Amazon’s Climate Pledge Fund, supported by the Climate Pledge (a commitment co-founded by Amazon and Global Optimism is to support companies that are developing decarbonizing technologies and services that will enable Amazon and other companies to meet the goal of being net zero by 2040).
It has just announced a new wave of funding. There are several companies receiving this tranche of investment. One is Resilient Power, which works on EV fast charging, which is expected to help Amazon reach its broader decarbonization goals around transportation, including the ongoing incorporation of EVs into its delivery fleet, including deploying 100,000 custom EVs by 2030. Another is Infinium, which has developed a renewable fuels technology that Amazon says has the potential to accelerate Amazon’s efforts to transition its transportation network away from fossil-based fuels and deliver packages to consumers more sustainably. In the packaging sector CMC Machinery, which designs and manufacturers custom-sized packaging, can reduce single-use plastic padding. Amazon expects that by the end of 2022, the technology could reduce the cubic volume for each box by 24% on average, and the technology is projected to reduce the use of approximately 1 billion plastic air pillows by the end of 2022.
Previous investments in companies like CarbonCure, Pachama, Rivian, TurnTide Technologies, ZeroAvia, BETA Technologies and ION Energy cover markets from low carbon aviation, EVs, energy efficiency, recycling, carbon capture and, of course, platforms for the facilitation of low carbon transition. The unifying theme around each investment is its potential to lower Amazon’s and other companies’ carbon emissions and increase overall sustainability.
Kara Hurst, vice president and head of Worldwide Sustainability at Amazon said, “We continue to search for and identify revolutionary companies that are uniquely positioned to help accelerate the transition to a low-carbon economy. These companies span multiple industries and offer new pathways for Amazon to achieve the goals of The Climate Pledge”. Addressing climate change needs to be a collaborative effort. A spokesman said, “We need everybody involved – companies across sectors (big and small), NGOs, and government. We are energized that in just two short years more than 200 signatories have decided to join the Pledge and confront the challenge of climate change head-on through real business change.”
According to the company, Pledge signatories in total generate over $1.8 trillion in global annual revenues and have more than 7 million employees across 26 industries in 21 countries. These signatories are expected to collectively mitigate 1.98 billion metric tons (BMT) of carbon emissions from a 2020 baseline. This is equivalent to 5.4% of current global annual emissions.
The Fund looks at investments in companies in multiple industries, including transportation and logistics; energy generation, storage, and utilization; manufacturing and materials; circular economy; and food and agriculture. It is also investing at any size or any stage – as long at its development is going to contribute to an acceleration of the low carbon transition.
It’s a smart way to ensure that the technologies and approaches that Amazon needs to achieve its stated net zero goals can actually be met. And with current market trends, it looks like Amazon’s corporate development team is building an interesting venture arm.
