Amazon to suppliers: ‘We will give priority’ to those who tell us about their emission reduction plans

Amazon is pressuring its “highest emitting” suppliers — those that collectively account for 50 percent of emissions across its supply chain — to show how they plan to reduce their emissions.

The move comes as the $2.1 trillion cloud computing and e-commerce giant has required its suppliers, regardless of size, to report greenhouse gas emissions as part of a supply chain standards update scheduled for early 2024.

The consequences of not adhering to those plans “over time” could cause Amazon to reconsider doing business with a given supplier and seek alternatives, Amazon said July 10 in its 2023 Sustainability Progress Report, released the same day.

“We will prioritize those who demonstrate their plans and track record towards achieving net zero carbon emissions,” the report reads.

Amazon’s strong tactics, along with information and assistance in developing an emissions reduction plan, put the company at the forefront of corporate efforts to get suppliers aligned with sustainability strategies. Experts say real business consequences and human support are needed to effectively force smaller companies to respond.

The company did not provide a management representative for comment on the matter.

Copy what we do

Amazon did not provide a timeline for actions it would take in response to the threat, but it does not intend to leave the matter to chance.

According to the report, Amazon is already working directly with many suppliers to develop emission reduction plans and is encouraging them to join the Climate Pledge, which has been signed by 500 companies so far committing to achieving net zero emissions by 2040.

In addition, Amazon’s sustainability team has turned its own best practices into a vast library of detailed playbooks, case studies, and methodologies that it publishes on the new Amazon Sustainability Exchange website. Here are some examples of what you’ll find there:

• A guide on how to measure your carbon footprint, identify the metrics most important to your business and turn them into disclosures.
• Ideas for transitioning to electric fleets, including how to install charging infrastructure.
• Recommendations for reducing the footprint of buildings, from grocery stores to corporate offices, warehouses and distribution centers.
• A “beginner’s” guide to creating a water-saving strategy.
• Energy efficiency tips and renewable energy resources.

“We’ve learned a lot. We could keep those lessons to ourselves, but we know that achieving net zero emissions will require collective action from those who supply our operations,” said Kara Hurst, Amazon’s chief sustainability officer, in a blog post about the new site. “And we’re uniquely positioned to help drive meaningful global change.”

Suppliers need financial and educational resources

A growing number of multinational corporations, including Ikea, Microsoft, Philips and Walmart, with mature sustainability programs are asking their suppliers to adopt emissions reduction or environmental protection targets.

Resources like those in the new Amazon Sustainability Exchange are helpful, but many partners will need one-on-one interactions to actively engage, said Jon Powell, former global head of sustainability at Salesforce and now CEO of consulting firm Apex Catalytic.

“It takes people to do it, it can’t be automated,” he said.

The most successful initiatives combine incentives, such as funding, joint marketing opportunities or better contract terms, with consequences for inaction, including the threat of losing the business relationship, said Cooper Wechkin, founder and CEO of consulting firm RyeStrategy, which has developed sustainability education programs for many high-profile technology companies, including Salesforce.

“It takes multiple touchpoints to really get vendors moving,” Wechkin said. “You want them to see why this is important, but you don’t want them to get offended.”