A couple of weeks ago, just before Earth Day, Amazon presented some interesting information about the green purchasing habits of its customers, showing how America is going green. One interesting piece that was missing in this report was how Amazon is going green.
Frankly, I really don’t know how green is Amazon because when it comes to its own footprint, Amazon is consistently more secretive than the CIA (which actually doesn’t mind sharing its green initiatives).
It is well known for example that Amazon does not reveal information on how many Kindles it sells, but did you know Amazon also does not share information about the carbon footprint of the Kindle? Although it is their top selling product ever, Amazon has repeatedly ignored requests to provide information regarding the Kindle’s footprint. Here are two examples:
Another example can be found in the 2009 Green Grades Report Card published by Dogwood Alliance and ForestEthics, where Amazon got an F. It was reported there that “the giant online retailer ignored our survey, so questions remain about their paper sourcing practices.” In the 2010 report Amazon got F+, but it wasn’t reported if it finally provided the requested information or kept ingoing the requests for doing so.
I think, by now, the picture is pretty clear – Amazon is reluctant to disclose any sort of information when it comes to its own environmental impacts. Is it because they don’t want to reveal this data or just never bothered to collect and calculate it? I don’t know the answer, but I believe the latter sounds more reasonable. For some reason it seems like Amazon, a company that is proud in making decisions based on “long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions,” doesn’t believe environmental issues have anything to do with its business. Therefore, it just ignores them.
There are few exceptions. One was the mapping of customers’ green purchasing habits that I mentioned earlier. Another relates to packaging. Last September the New York Times reported that “for nearly two years, Amazon has been trying to get manufacturers to adopt “frustration-free packaging” that gets rid of plastic cases and air-bubble wrap — major irritants for consumers.” The packaging solutions Amazon was promoting were not only more user-friendly but also more sustainable as they used fewer materials and had a smaller footprint.
The reason Amazon made the effort of working with manufacturers to design greener packages was simply because many customers weren’t happy with the plastic cases and air-bubble wraps - some customers were experiencing what Jeff Bezos, founder and CEO of Amazon.com, called “wrap rage” and these packages had become, according to the NYT article, one of Amazon’s biggest sources of customer complaints. Unhappy customers are bad for business and therefore Amazon had a clear incentive to act and work on providing better solutions.
I guess this is also another reason why Amazon doesn’t disclose its environmental impacts – it probably didn’t receive enough complains from customers about it. I assume that although customers buy more green products on Amazon, very few of them experience “carbon rage” and send letters to Jeff Bezos complaining about it. Consequently Amazon feels the fact it doesn’t provide any information on its environmental efforts doesn’t result in unhappy customers.
But there’s actually one group of stakeholders that is not happy about it. And this is a group that Amazon cares about very much – shareholders. Next month, in the annual meeting of Amazon’s shareholders, shareholders will vote on a resolution calling the company to prepare a report that will assess the impact of climate change on Amazon and make it public.
This resolution was filed by Calvert Investments, one of the largest sustainable and responsible investment (SRI) companies in the US (disclosure: I also helped in the preparation of this resolution). Why Calvert filed this resolution? Because as a shareholder it sees climate change in terms of risks and opportunities that Amazon can’t and shouldn’t ignore any longer.
The approach of Calvert and a growing number of investors is that ignoring climate change and other environmental issues put not only the environment but also their shareholders at risk. In other words, continuing with a business as usual approach is jeopardizing Amazon’s long-term positioning and its ability to generate value to its shareholders in the future.
Now, Amazon may not pay too much attention to its carbon footprint, but it is very conscious about its ability to generate shareholder value over the long term. That’s at least what Jeff Bezos said last year in the letter to shareholders – “We believe that a fundamental measure of our success will be the shareholder value we create over the long term.”
I believe increasing long-term shareholder value is as important to Amazon as increasing customer satisfaction, which is why I hope Amazon will take this resolution seriously, just like it did with packaging. This is an opportunity for Amazon to start measuring and eventually reducing its footprint and increase their capacity to adapt to climate change risks and opportunities.
I hope Amazon will see it this way and understand that the time has come to stop being so hush hush about their footprint (they can still keep the number of Kindles sold a secret if they have to) and start taking climate change seriously.
Raz Godelnik is the co-founder and CEO of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.