21/07/2023

Amazon will update its Supply Chain Standards next year, with a new requirement for suppliers to report their carbon emissions data to the company and to set emissions reduction goals, according to the company’s 2022 Sustainability Report.

The new requirements form part of Amazon’s initiatives to reach its goal to achieve net zero carbon emissions by 2040. Scope 3 emissions, or those originating in the company’s value chain outside of its direct control, account for over three-quarters of Amazon’s emissions footprint.

In a blog post released alongside the sustainability report, Kara Hurst, Vice President and Head of Worldwide Sustainability at Amazon, said:

“Reaching net-zero carbon by 2040 requires Amazon to reduce its carbon footprint across our entire business, including our vast global supply chain. Like many companies our size, this is challenging, as these are activities that take place outside our direct operational control.”

Amazon revealed in the report that its total carbon footprint declined in 2022 by 0.4%, including a 0.7% decrease in Scope 3 emissions, despite the company’s 9% revenue growth during the year. Scope 3 emissions cuts were driven by areas including building construction, leased buildings and equipment, and third-party transportation.

Hurst said: “We know that to decrease our carbon footprint, we must work with our supply chain partners to help them decarbonize their own operations. Beginning in 2024, we’re updating our Supply Chain Standards to require suppliers to share their carbon emissions data with us and set carbon goals.”

While the company did not elaborate in the report on specific requirements or suppliers, Amazon’s Supply Chain Standards apply to all goods and services suppliers to the company and its subsidiaries, including vendors, service providers, selling partners, contractors and subcontractors.

In its report, Amazon said that it will use its size and scale to help suppliers that are committed to decarbonization by providing products and tools for tracking and decreasing emissions, and that it will help select suppliers transition to carbon-free electricity.

The report added: “Our potential for impact across our supply chain is big because it spans building materials, transportation, technical equipment, products, and packaging, and we look forward to having further impact in supply chain decarbonization.”

Additional highlights from the report included the company’s progress in its energy transition, with Amazon confirming that it is on track to power its operations with 100% renewable energy by 2025. Amazon grew its renewable energy capacity by 8 GW in 2022, setting a record for the most announced by a company in a single year, according to the report. The company also reported that it grew its fleet of electric delivery vehicles to 9,000 in 2022, with a goal to reach 100,000 by 2030.

Source: ESG Today - Amazon to require suppliers to Report Emissions, Set Climate Goals