Amazon (NASDAQ:AMZN) has launched a new service aimed at providing companies in its value chain with access to high-quality carbon credit investments. The initiative is designed for businesses committed to net zero climate targets and addresses key challenges in the voluntary carbon market, including transparency and quality concerns. The program expands on Amazon’s existing sustainability efforts and aims to facilitate greater investment in projects that contribute to reducing and removing carbon emissions.
Past sustainability initiatives from Amazon have focused on reducing emissions within its operations, including investments in renewable energy and low-carbon transportation. The company has also worked on improving its supply chain sustainability through its Sustainability Exchange platform, launched last year. The new carbon credit service builds on these efforts by offering companies a structured way to invest in verified projects that mitigate environmental impact.
How Does Amazon Ensure Carbon Credit Quality?
Amazon has outlined measures to ensure the credibility of the carbon credits offered through its new service. The company collaborates with third-party experts to assess and verify the impact of projects and employs a “first principles approach” to evaluate methodologies rather than relying solely on existing industry standards. Amazon also commits to continuously reviewing scientific advancements to refine its assessment processes.
Who Can Participate in Amazon’s Carbon Credit Service?
The new service is available to Amazon’s suppliers, enterprise customers, and signatories of The Climate Pledge. To qualify, companies must have established net zero climate targets that include Scope 1, 2, and 3 emissions. Additionally, they are required to regularly measure and publicly report their carbon footprint and implement decarbonization strategies in alignment with current climate science.
Amazon’s carbon credit investments focus on three key areas: preventing deforestation, restoring forests, and advancing technological carbon removal methods. These priorities align with broader global efforts to combat climate change by preserving natural ecosystems and exploring innovative carbon reduction technologies.
Kara Hurst, Chief Sustainability Officer at Amazon, highlighted the challenges facing the voluntary carbon market and emphasized Amazon’s role in promoting high-quality investments:
“The voluntary carbon market has been challenged with issues of transparency, credibility, and the availability of high-quality carbon credits, which has led to skepticism about nature and technological carbon removal as an effective tool to combat climate change. However, 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. We’re 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.”
The introduction of Amazon’s new service comes at a time when businesses face increasing pressure to meet sustainability targets. However, concerns remain regarding the effectiveness of carbon credit markets, with past reports indicating issues related to credit verification and long-term impact. By establishing stricter eligibility and assessment criteria, Amazon seeks to address these challenges while expanding access to carbon reduction initiatives.
For companies aiming to meet net zero targets, securing credible carbon credits can be a crucial step in addressing residual emissions. Ensuring transparency and stringent evaluation processes may help improve confidence in the voluntary carbon market. As more businesses seek climate solutions, the success of Amazon’s initiative will likely depend on the integrity of the projects it supports and the long-term sustainability outcomes they achieve.
