This isn’t great news for Amazon, a company known for its efforts on sustainability and ESG. Bloomberg reports that
“The Science Based Targets initiative, a United Nations-backed entity that validates net zero plans, has removed Amazon from its list of companies taking action on climate goals after the tech behemoth failed to implement its commitment to set a credible target for reducing carbon emissions. The move raises questions around Amazon’s status as a preferred stock among funds marketing themselves as ESG. The world’s largest ESG exchange-traded fund, which is managed by BlackRock, lists Amazon among its top three holdings.”
Oops. This move from SBTi comes even as Amazon announced its own “carbon credit label called ABACUS Verified Carbon Unit (VCU), which goes above and beyond Verra’s methodology and will focus on ensuring additionality, leakage, and durability standards in the market” last December and their recent requirement for suppliers to report carbon emissions data and set carbon goals.
I’m not sure what led to this rebuke, but the company may be having troubles putting together the application for SBTi:
“’We’ve collaborated with the Science Based Targets initiative over the last several years in order to determine appropriate submission guidelines and methodologies for complex businesses like Amazon,’ [company spokesperson Elizabeth] Fine said by email. Amazon intends to ‘continue to work with’ SBTi ‘to establish a path forward for submission.’”
It will be interesting to see how this develops, especially with regard to investor and ESG ratings response should Amazon not meet SBTi’s requirements.
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