Amazon has taken another major step in the fight against climate change with the launch of a new carbon credit service on its Sustainability Exchange platform. This initiative is designed to help businesses invest in quality carbon credits, supporting nature-based projects and advanced carbon removal technologies. By offering access to vetted credits, Amazon aims to enhance transparency, credibility, and corporate participation in voluntary carbon markets.
Amazon is making significant changes to achieve its goal of reaching net-zero carbon emissions by 2040. The company plans to transition to carbon-free energy, electrify its delivery fleet, and enhance energy efficiency in its data centers. Notably, Amazon has already met its target of using 100% renewable energy seven years ahead of schedule.
The importance of reducing emissions is clear to Amazon, but some emissions are challenging to eliminate entirely. This is where carbon credits play a crucial role, providing a way to offset unavoidable emissions by supporting projects that capture or prevent carbon from entering the atmosphere. Kara Hurst, Amazon’s Chief Sustainability Officer, emphasized the need to address deforestation, which accounts for 30% of global carbon emissions. She highlighted the significance of investing in nature and technology for carbon removal, stressing the importance of halting and reversing deforestation to combat climate change effectively.
The new carbon credit service expands Amazon’s Sustainability Exchange, offering tools for companies to create and implement sustainability plans. Qualified businesses can purchase carbon credits to support their decarbonization efforts. Key features of the service include science-based carbon credits that meet strict environmental standards, support for nature-based solutions such as reforestation and land restoration, investment in carbon removal technologies like direct air capture, and access for Climate Pledge signatories to meet their sustainability targets.
Amazon has set stringent criteria for companies looking to buy carbon credits on its platform. Businesses must establish a net-zero target that includes direct emissions (Scope 1), indirect emissions from electricity use (Scope 2), and emissions from the value chain (Scope 3). They are also required to measure and publicly report their greenhouse gas emissions regularly and implement decarbonization strategies aligned with the latest climate science. Several companies, including Seneca Group, Ryan Companies, Corsair, and Slalom, have already joined Amazon’s initiative, viewing the platform as a trusted source of reliable carbon credits to help them achieve their climate goals.
Amazon’s entry into the carbon credit market has the potential to bring significant changes to the voluntary carbon market, where companies purchase credits to offset their emissions. The market has faced challenges such as unclear rules and low-quality projects, leading to doubts about the environmental benefits of carbon offsets. Amazon’s involvement could address these issues by offering high-quality credits with strict verification, rebuilding trust and increasing demand for carbon credits.
The voluntary carbon market has experienced declining demand for carbon credits, with concerns about their effectiveness leading to fewer credits being retired. Amazon’s focus on providing verified, high-quality credits aims to restore confidence in the market and drive more businesses to invest in climate change projects. The company’s leadership in this space could inspire other large companies to develop similar services, fostering competition and directing more funds towards emissions reduction projects.
To address skepticism around carbon credits, Amazon ensures that businesses prioritize real emissions reductions before purchasing offsets. The company also invests in Beyond Value Chain Mitigation (BVCM), supporting climate solutions beyond its direct impact. Through partnerships like the LEAF Coalition, Amazon has raised over $1 billion to protect tropical forests, demonstrating its commitment to environmental conservation.
Amazon’s new carbon credit service represents a significant step towards corporate responsibility in carbon markets. As demand for high-quality offsets grows, Amazon’s platform could play a crucial role in scaling up investments in climate solutions globally. The long-term success of this initiative will depend on maintaining market integrity, expanding eligibility to more companies while upholding high standards, and tracking the real-world impact of funded projects.
By expanding its Sustainability Exchange and offering businesses a tool to offset unavoidable emissions while driving investments in environmental solutions, Amazon is increasing its role in the voluntary carbon market. The company’s leadership in this area has the potential to set a new standard for corporate engagement in climate action.
