Amazon recently announced “Shipment Zero,” its intention to achieve net-zero carbon emissions in deliveries to customers, with a goal of being carbon neutral for 50% of its shipments by 2030. “Amazon has a long-term goal to power our global infrastructure using 100% renewable energy, and we are making solid progress,” the company wrote in a post on its blog.
Amazon has identified a range of approaches it hopes will minimize its supply chain’s carbon footprint, including “improvements in electric vehicles, aviation bio fuels, reusable packaging, and renewable energy.” According to Fast Company, while Amazon has said it won’t rely on carbon offsets, it could potentially cut emissions by changing its Prime offering to discourage unnecessary rush deliveries. In fact, Time notes that the recently announced “Amazon Day” feature, which allows shoppers to consolidate their shipments, is part of the “Shipment Zero” initiative—and one of the first specific details to emerge.
With “Shipment Zero,” Amazon taps into a growing trend of companies responding to the environmental effects of a business model built on constant worldwide shipping.
Logistics and the Environment
Concerns about the supply chain’s carbon footprint extend beyond Amazon. Greenhouse gas emissions in supply chains average a total of four times those in a company’s direct operations. The transportation industry has surpassed power plants as the primary source of carbon dioxide emissions in the US, accounting for 29% of US greenhouse gas emissions in 2017. Meanwhile, the aviation industry accounts for between 2 and 2.5% of global carbon dioxide emissions, according to Manchester Metropolitan University’s Center for Aviation, Transport, and the Environment. That number is only expected to continue growing in coming years.
Calculating the carbon footprint of a company’s logistics network is no simple matter, given the variety of shipping methods and options at play. What’s more, companies often don’t have direct control over how their goods are transported and are thus dependent on their shipping partners or an independent monitor like Arviem to provide data on carbon emissions. Still, Amazon said that it will disclose figures around its carbon footprint sometime this year.
A Broader Trend
Other brands, too, are moving toward carbon neutrality. UPS is partnering with a number of companies to develop electric truck models—last year it preordered 125 trucks from Tesla, while Workhorse is set to provide another 950. In a few cities, UPS even delivers some goods via electric tricycle.
Iconic furniture chain IKEA wants to go beyond carbon neutral to climate positive by 2030. For the short term, the company is targeting zero–carbon-emissions delivery in New York City, Amsterdam, and some other cities by 2020—and it wants to match that in every city it serves by 2025. Like UPS, IKEA is working with vehicle-makers on electric delivery options. Trucks will likely come first, but IKEA has also experimented with electric bikes and other technology.
Last year, carbon disclosure nonprofit CDP named 58 companies that are taking a leading role in reducing their supply chains’ carbon footprint, doubling the total from 2017. The list includes Bank of America, Panasonic, Rolls Royce, Tokyo Gas, and Unilever. Roughly 75% of the more than 4,800 suppliers responding to CDP’s survey said they recognize climate change risks to their business, and 52% reported that combating climate change is now part of their business strategy.
The role that business risks, strategy, or shareholder input played in driving Amazon’s new policy isn’t entirely clear. But as the world’s biggest online retailer, the company’s decision to join the movement could prove influential and act as a “tipping point” for others to do so as well.