Dive Brief:
- Amazon started selling “high-integrity science-based” carbon credits as part of its Sustainable Exchange resource hub, the company announced last week. Initial customers include online photo sharing and storage platform Flickr, as well as companies in the real estate, consumer electronics and technology consulting industries, according to a press release.
- The e-commerce giant opened the carbon credits to its U.S. supply chain partners, enterprise customers and signatories of The Climate Pledge “access to invest in nature-based projects and carbon removal technologies” through the credits through the resource sharing platform, according to the March 19 release.
- Amazon said in the release that the credits will only be available to companies that have net-zero targets for their scope 1, scope 2 and scope 3 emissions, measure and regularly report their greenhouse gas emissions and “commit to implementing decarbonization strategies in line with the latest climate science.”
Dive Insight:
Amazon said it considers carbon credits “high-quality or high-integrity” when the projects represent “the reduction or removal of one metric ton of [carbon dioxide] from the atmosphere that would not have occurred without climate finance,” according to a February blog explaining the company’s approach to carbon credits.
Amazon Chief Sustainability Officer Kara Hurst said in the release that although the voluntary carbon market has had issues with transparency, credibility and availability — which has led to skepticism — “the science is clear.”
“We must halt and reverse deforestation and restore millions of miles of forests to slow the worst effects of climate change,” Hurst said. “[Amazon is] using our size and high vetting standards to help promote additional investments in nature, and we are excited to share this new opportunity with companies who are also committed to the difficult work of decarbonizing their operations.”
Amazon had previously launched its Sustainability Exchange platform to share resources, training and playbooks for companies looking to meet their sustainability goals and enhance their decarbonization strategies. In addition to Flickr, which is a Climate Pledge signatory, Amazon said last week that the initial program participants include real estate advisory Seneca Group; commercial real estate construction company Ryan Companies; consumer electronics company Corsair; office furniture manufacturer Steelcase; and business tech consulting firm Slalom.
Executives from some of the participating companies said that they had previously had issues navigating the market to find high-quality credits, but felt assured to participate by Amazon’s expertise and trust the company has built in the market. Amazon was the top purchaser of green energy in 2023, according to BloombergNEF
“Sourcing high-quality credits is a must for us, and with a trusted partner like Amazon by our side, we’re excited and confident that our move into the voluntary carbon market will truly make a difference where it matters most,” Slalom Chief People Officer Kristine Santa-Coloma Rohls said in the release.
Flickr President and Chief Operating Officer Ben MacAskill said the image storage platform and its parent company SmugMug have invested in “a number of nature-based solutions … but they often lack credibility.” He said that “Amazon’s expertise and scientific rigor” give the company confidence in its ability to use the credits to help meet its climate goals.
Besides considering a project’s “additionality” — or that it results in emissions being reduced that would not have without climate finance — Amazon also considers an estimation of results that is biased towards under-estimation and the social benefits that result from the nature-based project to determine the quality and integrity of carbon credits, the February blog said. The company evaluates projects along those dimensions, as well as how they align with the company’s approach to carbon neutralization.
“Amazon’s approach to quality is to start from first principles and identify or develop honest and rigorous impact evaluation methodologies, rather than default to current standards, and to continually revisit these approaches as the science and technology change,” Amazon said in a document explaining its carbon neutralization approach. “While we aim for comprehensive and accurate impact evaluation, methodologies we use may overestimate impact in some areas, and underestimate in other areas.”
The company — which has a 2040 net-zero target date — said it does not believe the traditional approach to carbon offsetting “is conducive to the scaled climate action” needed.
Such an approach has also been eschewed by the Science Based Targets initiative, which validates that company net-zero targets are aligned with leading climate science. SBTi released a study last year that found “clear risks” to companies using carbon credits to offset emissions on their balance sheet and reaffirmed that view in a draft update to its corporate net-zero standard. Amazon does not count carbon credits towards its decarbonization targets, the company said in its February blog.
Amazon said it estimates less than 5% of credits in the global voluntary carbon market meet the company’s quality bar. The tech company said it is currently focused on reducing tropical deforestation, restoring degraded land and advancing technical carbon removal as part of its carbon neutralization strategy. That strategy includes direct investments, advance purchase agreements, development of crediting methodologies and technical innovations that aim to advance credit quality.
