Facing mounting criticism over the environmental impact of its massive e-commerce and data services operations, Amazon.com (NASDAQ: AMZN) on Tuesday announced a $2 billion investment fund focused on “sustainable and decarbonizing technologies.”
The newly formed Climate Pledge Fund will invest in industries and technologies focused on reducing greenhouse gas emissions that contribute to climate change.
“This dedicated investment program will invest in visionary companies whose products and solutions will facilitate the transition to a low-carbon economy,” the company said in a blog post.
Among the sector categories Amazon will target are transportation and logistics, energy generation, battery storage, manufacturing, and food and agriculture. Companies of all sizes and stages will be considered, the statement said, from pre-product startups to well-established enterprises looking to scale.
Also on Tuesday the company announced it would speed up by five years — to 2025 — a previously announced effort to power its operations with renewable energy sources. The company reaffirmed another earlier commitment to be carbon neutral by 2040.
The fund launches as Amazon faces intense scrutiny for the pollution it generates by delivering over 10 billion packages a year. That figure continues to spiral upward as a result of the coronavirus pandemic, which has spurred a massive increase in online shopping.
Related story: Amid a pandemic, Amazon pivots, and profits
Over the past year a vocal group of Amazon employees has hammered the $1 trillion online shopping giant for its environmental practices, and for donating funding to climate change-denying organizations.
Environmental groups and regulators are also circling e-commerce operations, with penalties on fossil fuel transportation expected to be implemented in many cities over the next decade.
To address the calls for environmental mitigation coming from all fronts, Amazon last year announced a series of green initiatives aimed at reducing impacts from packaging, delivery, and data centers. In June 2019, the e-giant launched a $100 million reforestation effort, as well as the broader initiative to make the company carbon neutral.
And as the company beefs up its logistics services to meet growing demand, it has pivoted toward clean technologies. Also last June, Amazon ordered 100,000 electric vehicles from Rivian, the single-largest electric truck purchase on record. Those vehicles are expected to come online in 2021. Other logistics initiatives include Amazon’s Prime Air delivery drone, an electric aircraft the company touts as a safer and more environmentally friendly way of delivering packages.
The Climate Pledge Fund adds another dimension to the battle between Amazon and its arch e-commerce rival, Walmart. That company has also stepped up investments in clean transportation technologies, among them the purchase of Tesla Semis and partnerships and investments with electric and autonomous vehicle companies to improve efficiency.
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