Amazon has announced the launch of a $2 billion internal venture capital fund to “support the development of sustainable and decarbonizing technologies and services that will enable Amazon and other companies to meet the goals set by The Climate Pledge.” The Climate Pledge is Amazon’s commitment to reaching net-zero carbon by 2040–10 years earlier than the Paris Agreement; and it encourages other companies to follow their lead.
Amazon says that the new Climate Pledge Fund will, “invest in visionary companies whose products and solutions will facilitate the transition to a low-carbon economy,” and that it will consider companies of “all sizes and stages” as it looks to reduce greenhouse gas emissions through the development of low-carbon solutions. While the fund will invest in companies across a variety of industries, Amazon confirmed an initial focus on “transportation and logistics; energy generation, storage and utilization; manufacturing and materials; circular economy; and food and agriculture.”
On the same day as The Climate Pledge Fund announcement, the tech giant also confirmed that it expects to reach 100 percent renewable energy by 2025–five years ahead of the program’s original goal. Just weeks prior, Amazon confirmed five new solar projects as part of the Climate Pledge in the United States, China, and Australia, with the U.S. receiving the majority of the new installations in locations across Virginia and Ohio.
The Climate Pledge Fund and Amazon’s recent solar projects represent just a small part of the company’s efforts to move toward a low-carbon future and influence the industry. Another sustainability endeavor chartered by Amazon includes the company’s fall 2019 order of 100,000 Rivian electric delivery vans–this after Amazon led a $700 million investment round in Rivian just months prior. Amazon’s Climate Pledge Fund will pave the way for more sustainable investments like Rivian. Another Amazon-led initiative is the Right Now Climate Fund–a $100 million conservation and reforestation fund in partnership with The Nature Conservancy. The Seattle-based company’s sustainability efforts arrive after climate advocates have long criticized Amazon for its environmental record.
In the past, Amazon has faced pressure to pursue carbon footprint-reducing solutions and discontinue its business dealings with oil and gas companies that it negotiates with for fossil fuel sales and transport computing services. Amazon’s prior lack of a plan to combat climate change prompted thousands of company employees to submit a proposal during the company’s 2019 shareholder meeting, urging Founder and CEO Jeff Bezos to compose a plan to reduce Amazon’s carbon footprint.
However, Amazon’s recent sustainability efforts appear to be more than a response to criticism. The coronavirus pandemic has rocked the oil and gas industry, resulting in major financial losses, cuts, and layoffs. Simultaneously, the green energy sector has shown surprising resiliency amid the pandemic, and in 2020, solar and wind power are now the cheapest power sources across most of the globe. With investment focused on the potential for growth from sustainable solutions, Amazon appears to be taking advantage of the moment.