Amazon is still going green, despite handshakes with the red side of the force. Although the big tech has shrunk its diversity, equity, and inclusion (DEI) initiatives since Trump went back to the White House, the “E” from ESG remains in the strategy. Jeff Bezos’ giant announced recently that it is going to start offering carbon offsets for companies that want to compensate for emissions within its platforms.
Players engaged in Amazon’s operational chain, including suppliers, business customers, and other companies that signed The Climate Pledge, will be able to buy the credits to compensate for their own carbon emissions. Companies such as Flickr, Seneca, and Corsair have already committed to participating in this program.
The company presented the initiative as part of its efforts to meet the commitment of becoming net-zero in carbon emissions by 2040. According to the announcement, the credits are certified according to rigorous standards, but there were no further disclosures regarding the certification process or label.
The Silicon Valley giant said that the strategy is complementary rather than central. Aligned with the Science-Based Targets initiative (SBTi) standards, selling carbon offsets supports the use of this product as a means to mitigate residual emissions that cannot be eliminated through direct reductions. SBTi emphasizes that while carbon credits can play a role, companies should prioritize reducing or, ideally, eliminating emissions within their operations and supply chains.
Previous efforts
Amazon’s involvement in the carbon credit market is not entirely new. Previously, the company, along with five others, committed approximately $180 million to purchase carbon offset credits aimed at preserving the Amazon rainforest in Brazil’s Pará state. The company was one of the founders of the local foundation LEAF, that seeks to slow down forest destruction in that particular area.
The company’s strategy focuses on three key areas for its carbon credit investments: preventing deforestation in tropical forests, restoring degraded land, and advancing technological carbon removal methods. The company believes that as more businesses take responsibility for their emissions, the supply of high-quality carbon credits will shift towards removal-based solutions over time—an idea challenged by experts in the matter.
Carbon Offset Market
But as Amazon ventures into carbon credit sales, it sets a precedent for other corporations to follow. By providing a platform for purchasing high-quality carbon credits, if indeed effective, Amazon not only aids companies in achieving their sustainability goals but also contributes to the broader global effort to mitigate climate change.
The global carbon credit market is experiencing substantial growth. In 2023, the market was valued at around $479.4 billion and is projected to grow at a compound annual growth rate (CAGR) of 39.4% from 2024 to 2030. Factors driving this growth include government policies and regulations aimed at reducing greenhouse gas emissions—though in some countries, including the US, there has been a reversal on this topic.
Despite the market’s expansion, the integrity of carbon credits has been a topic of debate. Concerns have been raised about the effectiveness of certain projects and the potential for greenwashing. Efforts are underway to enhance the credibility of carbon credits through the development of robust frameworks and standards.
