Amazon's Climate Pledge

Amazon's Decision
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Created in 1994 by Jeff Bezos, Amazon Inc. is an American technology-based firm in Seattle. The entity ventures in e-commerce, digital streaming, artificial intelligence, and cloud computing. The organization is the largest global e-commerce cloud computing and marketplace platform, measured by market capitalization and revenue (Aćimović et al., 2020). In addition, Amazon is the world's largest online retailer and one of the largest providers of cloud computing services through its Amazon Web Services arm (Venkatesan, 2017). Jeff Bezos, the chairman, president, and chief executive officer, owns the corporation. Amazon has attained a competitive advantage by leveraging its massive scale and deep understanding of customer needs (Wells et al., 2018). Besides, it has a vast array of products and services. By leveraging its scale and technology, Amazon can offer customers a wide selection of products at competitive prices (Sadq et al., 2018). Additionally, the company has invested heavily in customer-centric features such as Prime, which offers loyal customers free shipping and other perks.
The firm recently announced its Climate Pledge, a commitment to become carbon neutral by 2040 and to realize the Paris Agreement's aim of net zero carbon waste by 2050. The company invested $100 million in its internal carbon reduction initiatives and is supporting the development of technologies that can reduce emissions. The Pledge also commits Amazon to utilize 100% renewable energy by 2030 and buy 100,000 electric delivery vehicles by 2030. The company further invested $2 billion in a new Climate Fund to support projects that reduce and remove carbon emissions from the atmosphere. The fund will finance projects such as reforestation and capturing atmospheric carbon dioxide. This discussion evaluates the above decision to comprehend the reasons for considering it and establish the ethical implications of the action and alternatives.
The decision-making process that led to Amazon's Climate Pledge started long before the company's formal announcement. The process began in 2015 when Amazon first committed itself to reach 100% renewable energy, a goal that was achieved in 2020. At the start of 2020, Amazon CEO, Jeff Bezos, challenged other companies to join the Climate Pledge, committing to realizing the Paris Agreement's objective of net zero carbon waste by 2050. This challenge and Amazon's commitment to becoming carbon neutral by 2040 sparked internal discussions among its leadership. In April 2020, the Amazon Sustainability team, led by Kara Hurst, began to develop the Climate Pledge (Pagitsas, 2022). The team worked with sustainability experts and outside organizations, including Global Optimism, to draft the official Pledge.
In June, the team presented the Climate Pledge to the Amazon Board of Directors, who approved the proposal. In September 2020, Amazon announced the Climate Pledge publicly. The announcement was made at the United Nations Climate Action Summit in New York City, where Jeff Bezos appeared in person to commit. The Climate Pledge was a deliberate and planned move driven by Amazon's commitment to sustainability. The decision-making process was conducted over several months and involved many stakeholders, including the Amazon Sustainability team, the Amazon Board of Directors, and external firms. The announcement of the Climate Pledge was a significant milestone in Amazon's journey to reach net zero carbon emissions by 2050.
Amazon's Climate Pledge is an example of an offensive strategy. This technique is designed to proactively seek opportunities for growth and expansion, aiming to increase market share, profitability, and sustainability. By committing to become carbon neutral by 2040 and attain the Paris Agreement's aim of net zero carbon waste by 2050, Amazon is taking a proactive stance to address the climate crisis and ensure a more sustainable future. The offensive strategy also involves Amazon investing in renewable energy sources, such as solar, wind, geothermal, and carbon capture and storage technologies. In addition, the company is investing in technology to reduce carbon emissions, such as using more efficient equipment, reducing waste, and investing in renewable energy sources. By committing to these initiatives, Amazon is taking a proactive approach to reducing its emissions and setting an example for other companies. Ideally, the firm is creating the Climate Pledge Fund, which will invest $2 billion in developing sustainable and decarbonizing technologies. This fund will help accelerate the development and deployment of clean technologies and services that can help reduce emissions worldwide.
One theory that could be used to explain Amazon's Climate Pledge is the Social Responsibility Theory. This framework states that businesses are responsible for acting in the interests of their stakeholders, including shareholders, employees, customers, and the environment (Brin & Nehme, 2019). The Social Responsibility Theory suggests that companies should strive to make decisions that benefit the environment and society. By making the Climate Pledge, Amazon demonstrates its commitment to its stakeholders and the environment. The act demonstrates that it is willing to take responsibility for its environmental impact and take action to reduce its carbon emissions. Amazon's Climate Pledge is also a way to show its customers and other stakeholders that it is a socially responsible company, which can lead to increased trust and loyalty.
The above action is a strategic move that is likely to have a significant impact on Amazon's Porter's Five Forces Model. First, the firm's commitment to reduce emissions and become carbon neutral by 2040 could lower its cost structure due to the adoption of more energy-efficient operations and the use of renewable energy sources. This effort could give the company a competitive edge in terms of cost and increase its ability to compete in the market. Second, Amazon's commitment to the Climate Pledge could create a competitive advantage in product differentiation (Wingfield et al., 2018). Clients may be willing to fund a premium for products that are manufactured in an environmentally responsible way. This situation could increase sales, market share, and a better brand image.
Amazon's commitment to the Climate Pledge could also create a competitive advantage in supplier relationships. Companies committed to reducing emissions and increasing their sustainability profile are likely to enter into long-term relationships with Amazon. This effort could boost Amazon's ability to secure the best suppliers and its bargaining power in the market (Wu et al., 2022). Ideally, Amazon's commitment to the Climate Pledge could create competitive advantages in customer loyalty. Customers may be more likely to purchase from Amazon if they know that the company is committed to reducing emissions and increasin...