Element Assignment Sample
Introduction
Economics, environmental, and social sustainability have become increasingly important and beneficial in today’s business environment. A business’ corporate strategy that includes sustainability enhances its brand, meets consumer demands, increases productivity, and creates new opportunities, thereby attracting talented employees (Lloret, 2016). An enterprise is sustainable when it adopts a strategy and activities to meet its stakeholder’s needs and protect and maintain the natural, human, and financial resources needed. As an employer, Amazon strives to be the best employer on Earth, as well as the safest workplace on Earth. To achieve goal set by the company of being a huge customer-centric company over the Earth, Amazon aims towards building a sustainable operation that benefits customers, communities, and employees at large. As part of its commitment to basic dignity and respect, Amazon ensures the treatment of its partners around the world. The path to net-zero carbon is not straightforward, and perhaps it is not a linear progression year after year, as many companies and countries are pursuing long-term strategies (Faiella and Mistretta, 2022). The primary purpose of the report focuses on analyzing Amazon’s supply chain in terms of its sustainability performance, as well as its carbon footprint and social impact, and then to compare Amazon’s sustainability policy with that of other companies. Using the Lifecycle Management Model, the report outlines how Amazon plans to increase sustainability, as well as some recommendations for how Amazon can increase sustainability.Element Assignment Sample
Organization Overview
The biggest online retailer in the world is Amazon.com, Inc. With a rank of 43rd in the best 100 global brands in 2009, it is the world’s largest online retailer. Amazon was founded by Jeff Bezos in the year 1994, opened its online store in the year 1995, and had revenues of $24.509 billion in the year 2009 with 20,700 employees. Amazon consists of 6 websites in the United Kingdom, Canada, China, France, Japan, and Germany (Hahn et. al. 2018). A few products are available for international shipping in certain countries.
Additionally, Amazon consists of plans towards usage of 100% renewable energy in order to power their operations by the year 2025 and targets towards reaching a net zero CO2 emissions by the year 2040. Amazon has ordered more than 100,000 electric delivery vehicles since the end of 2015. The company plans to invest $100 million in reforestation. In their third year, Amazon can observe the decarbonization process in a more comprehensive manner than ever before. Everybody knows progress is not linear, and the year 2020 was the clearest example of how difficult forecasting is. In sustainability, Amazon identified the need for strategic partnerships that will reduce emissions throughout their supply chains and ultimately contribute to the net-zero carbon goal they aim to reach by 2040 (Campbell, 2020). The Sustainability Ambassadors program will be spread across Europe in 2021 with the help of a mentorship program from senior management to demonstrate how the program contributes to Amazon’s sustainability goals.
Figure 1: Amazon Logo
(Source: Amazon.com, 2022)
Sustainability Analysis
Amazon will purchase over 100,000 electric delivery vehicles in the near future, and $100 million will be invested in reforestation worldwide. The company has also started Amazon Climate Pledge Fund, with $2 billion rates of fund designed to support companies that provide innovative goods and services that help shift economy to a low carbon economy (Silaban et. al. 2021). As Amazon continues on its path to 100% renewable energy by 2025, AWS focuses on efficiency and continuous innovation across its infrastructure globally. In every aspect of its infrastructure, AWS is dedicated to improving efficiency. Amazon is committed to build a business sustainable in nature that benefits customers, employees, and communities as part of its mission to be the most customer-centric company on the planet (Polacco and Backes, 2018).
Quantified Analysis
Quantifying Amazon’s total greenhouse gas emissions is of particular interest since it includes both direct and indirect emissions. Amazon uses a comprehensive, hybrid carbon footprint approach to determine Amazon’s emissions from its specific business activities based on its physical and financial data (Phillips and Brienen, 2017). By calculating Amazon’s total climate impact, mapping its most significant activities, and developing means to reduce carbon emissions across its business by 2040, Amazon will be able to reach net-zero carbon emissions. The Amazon carbon intensity metric calculates the total carbon emissions per dollar of gross merchandise sales, measured in grams of carbon dioxide equivalent (CO2e). Benchmarking annual performance based on this metric is common because it gives a relative comparison despite other changes to the business or its operations commitment of Amazon to reach net-zero carbon by the year 2040, despite their growing business, can be measured with this metric. However, Amazon’s overall carbon intensity decrease from 122.8 gms of CO2 per dollar of GMS in 2019 to 102.7 gms of CO2 per dollar of GMS in the year 2020, even though their business grew in the year 2020 and their C2 emissions increased 19% during that time (Amazon.com, 2022). It is expected that Amazon’s business will grow substantially in the year 2020, and its C2 emissions will increase 19% during same period, although its C2 intensity will decrease by 16 percent, from 122.8 gms of CO2 per dollar of GMS in the year 2019 to 102.7 gms in the year 2020. Marketplace outlets and other Amazon physical stores will cease operation in 2020, and Amazon will shift to home delivery, generating fewer carbon emissions.
Figure 2: Amazon Carbon Emissions per Year
(Source: Amazon Sustainability 2020 Report, 2021)
Amazon Social Impacts
In the Amazon ecosystem, over 7,500 Amazon natives have formed Sustainability Ambassadors – a grassroots network of environmental and social-minded workers seeking to expand the environmental and social impact efforts of companies like Amazon. Amazon is a member of the Sustainable Apparel Coalition (Coalition), an organization dedicated to reducing environmental and social impact of apparel and footwear products worldwide (Bertram and Chi, 2018). This Coalition is composed of manufacturers, retailers, apparel and footwear brands, non-governmental organizations, academics, and government institutions. Gender equality is fundamental to a sustainable supply chain and a human right. In addition to providing women with quality jobs, Amazon actively works to empower them to make their own career decisions, health decisions, and financial decisions. Also, Amazon is committed to constantly improving the conditions of working for all employees, including the regular and timely payment of wages, in collaboration with suppliers, business partners, and multi-stakeholder associations. To tell manufacturers how their facilities are performing on social and environmental fronts, Amazon encourages Amazon-branded suppliers to use Coalition’s Higg Index. As a result, Amazon is working with its suppliers to help them understand their environmental impacts and to adopt this assessment.
Complicated challenges are done for balancing social and environmental aspects
Like most companies and countries that invest in long-term strategies, Amazon knows that reaching net-zero carbon over the long run will not be an easy task that occurs in a linear fashion from year to year. To achieve a goal of this scope takes innovative thinking, bold commitments, and perseverance from business leaders to transform amazon’s entire business over an extended period of time. In addition, Amazon hopes to create a cross-sectoral network that works together to achieve decarbonization through collaboration with organizations, companies, and partners (Bataille et. al. 2020). In addition to these grants, ASDI offers grants that are open to researchers interested in using AWS’ scalable infrastructure and technology to address big, long-term sustainability challenges. The following are some examples of how AWS customers are embracing technology to address major challenges like climate change. ASDI helps organizations better understand long-term opportunities, whether they are government agencies or private businesses.
Digital Earth Africa – DE Africa (Digital Earth Africa) makes petabytes of decision-ready satellite data available to users on the African continent. Through the project, African nations can gain a unique understanding of how climate is changing on the continent through the easy availability of Earth observation data. In addition to the prevention and planning of droughts, floods, coastal and soil erosion, forests, agriculture, changes in land use and land cover, quality of water, and human settlements, these insights will also be of great importance for the planning of forest regeneration.
NOAA’s Emergency Response Imagery, a service hosted on Amazon Web Services, provides timely images of areas affected by storms, tornadoes, and floods following extreme weather events (Baker et. al. 2019). It is critical that such capability be available to guide action and safeguard lives and property. An image of the damage caused to both property and the environment can be a cost-effective way to understand what happened.
Open AQ empowers communities worldwide to improve their air quality by harmonizing, sharing, and utilizing open-air quality data. Using the OpenAQ platform hosted by AWS, researchers are able to gain insight into how COVID-19 impacts air quality.
Benchmarking Amazon’s sustainability efforts
As a standard by which others can be judged and measured, benchmarking can be said to serve as an aspect of compare and contrast. A company’s way of measuring its results and performance and comparing them to other companies in the same industry or to competing companies (Lankford, 2022). A holistic approach to sustainability is one that takes into consideration economic, ecological, and social factors simultaneously. A company’s long-term performance is significantly impacted when it adopts sustainable initiatives. It is not just Amazon’s products that drive its activities, but sustainability as well. A number of initiatives and programs have been implemented at the company’s manufacturing facilities in an effort to achieve zero-emission production (Pfeifer et. al. 2020). Every aspect of Amazon’s business is sustainable, which sets the company apart from other companies. For this reason, Amazon is building a system that encompasses transportation, energy, and data storage. The reports highlighted that Amazon, unlike other companies, focuses heavily on the affordability of its products in addition to the development of the technology behind the ecosystem. Research and development, as well as software development, are required to achieve this. It ensures that the board of directors and management play a more active role in driving sustainability within the organization (Bae et. al. 2018). Leadership from across Amazon makes up the sustainability council. Data is collected, analyses are conducted, and content is developed in this process. The board of directors also receives information from this council for review on a regular basis. Further, the board oversees initiatives, priorities, and outcomes related to sustainability. The company’s management sets higher standards for its employees, officers, and other office personnel, considering their responsibilities.
Furthermore, the company’s code of conduct for suppliers and partners outlines expectations for them. As part of its commitment to a safe supply chain, the company works to create safe working conditions. Employees are treated with respect, and manufacturing processes are developed in accordance with environmental concerns (Helleno et. al. 2017). In addition, they should ensure that their supply chain includes responsible sourcing throughout their operation as part of their supplier’s management system. Logistics, inventory management, and pricing are all part of Amazon’s supply chain process. A smooth supply chain has been ensured by efficiently optimizing all these elements of this E-commerce business organization. Amazon’s commitment to conducting business responsibly and ethically means working with suppliers who respect human rights, are committed to promoting a safe and inclusive work environment, and are interested in a sustainable future. For themselves and their suppliers, Amazon has set high standards. According to Amazon Supply Chain Standards, suppliers, their supply chains, and buying partners with whom Amazon sells products are expected to meet certain guidelines (Ceil, 2018). As part of Amazon’s due diligence approach to human rights and to ensuring workers’ rights, they insist on supply chain transparency. Amazon provides their supply chain map, which they update annually and can be downloaded, with information on which suppliers produce branded apparel, foods, beverages, and consumer electronics.
Comparison of Amazon with Alibaba
After analyzing Amazon’s sustainability, a comparison is made between Amazon and Alibaba’s sustainability. There are, however, some e-commerce giants who have developed a strong online presence and are now major players in the market. These corporations include Amazon (AMZN) and Alibaba (BABA). Procurement could be elaborated if the best practices of Amazon’s sustainability practices were considered. According to Amazon’s mission to be the Earth’s most customer-centric company, customers can choose from a wide variety of sustainable products that the company offers, whether they are Amazon-branded products or those that it sells from its millions of retailers and third-party sellers. Today, Alibaba unveiled a new ESG governance framework aimed at overseeing, enabling, and supporting the company’s target of carbon neutrality, as well as broader sustainability objectives. Besides the Carbon Neutral goals and broader sustainability objectives announced today, Alibaba also announced a new ESG governance framework to enable, oversee, and support these goals (Zhou et. al. 2018). To gain a deeper understanding of the value chain of their upstream and downstream products, emissions related to their use and disposal, and numerous other sources not yet measured effectively, Alibaba strives to collect more data. Carbon removal through technology is the key to achieving carbon neutrality in the long run. In order to maintain Alibaba’s sustainability, the company prioritizes suppliers with electric green and transportation packaging capabilities in its procurement of transportation and logistics services and packaging. Amazon wrote to the European Commission, urging them to remove barriers to corporate purchases of renewable energy and advising them to use corporate renewable energy procurement as part of their National Energy and Climate Plans. In their respective business models, Amazon and Alibaba are e-commerce companies that have distinct features that distinguish them from one another (Chang and Allen, 2016). Alibaba acts as a middleman between buyers and sellers, while Amazon is a leading retailer of both new and used goods.
Figure 3: Comparison of Alibaba and Amazon
(Source: Cuofano, 2018)
Lifecycle Assessment
An organization can use LCA to improve its sustainability performance across all business operations (Daddi et. al. 2017). The method aims to promote a more sustainable value chain management for large and small companies alike. They utilize a customer-focused, science-based approach to climate change at Amazon. To assess and map the environmental hotspots throughout its value chain, Amazon uses a structured life cycle assessment model. To determine which environmental issues are most critical to Amazon’s business, the company performed a materiality assessment. A number of factors can affect how Amazon categorizes climate risks and opportunities, including customer and stakeholder expectations, legislation, business risks, and industry best practices (Galuchi et. al. 2019). Amazon uses a range of approaches to address sustainability challenges, such as climate-related hazards, in their business operations. Cradle-to-grave or cradle-to-cradle analysis studies the environmental consequences of all aspects of the life cycle of a product, beginning with the extraction of raw materials, continuing through materials processing, manufacturing, consumption, and distribution.
Amazon calculates the amount of GHG emitted by each of these activities by multiplying the amount of the activity (e.g., miles traveled or gallons of fuel burned) by the appropriate life cycle “emissions factor” (e.g., grams CO2 per kilowatt-hour (kWh) of electricity used), which provides a representative value for the carbon dioxide emissions associated with that activity (Geller and Meneses, 2016). AWS technology and cutting-edge life-cycle assessment science were combined to build a computational tool that analyzes billions of operational and financial data points throughout Amazon’s global operations to quantify their carbon footprint. With the software, carbon emissions from all activities within the Amazon system boundary are estimated using an environmental assessment model based on dollars, and carbon emissions from carbon-intensive activities are accurately assessed using specific life cycle assessments based on processes (Welsh-Huggins and Liel, 2017). Amazon has a thorough grasp of their company’s carbon emissions and has conducted substantial research to set science-based targets, strategies, and measures to minimize them. Amazon has committed to the following goals as part of The Climate Pledge:
- By 2040, Amazon will have achieved net-zero carbon emissions.
- By 2030, provide 50% of shipments with net-zero carbon emissions.
- By 2025, Amazon intend to run our activities entirely on renewable energy (Nobre al. 2016).
To detect, decrease, and eliminate carbon emissions in their operations, Amazon teams are employing a wide, scientific strategy. Continuing its commitment to reduce carbon emissions, Amazon has signed on to the Science Based Targets Initiative (SBTi), confirming its commitment to take a science-based approach to reducing climate change emissions as part of The Climate Pledge. The findings of this study assist Amazon in prioritizing key areas where they have the greatest potential to benefit workers and communities positively. The assessment findings help Amazon prioritize important places where they can benefit workers and communities the most. Amazon Advisors will identify important human rights risks in their organization. Amazon consulted with a variety of external human rights experts before completing this assessment and incorporated their feedback into it (Raikas, 2020). Amazon compared the data to widely established human rights standards. This LCA model identified several important human rights concerns for Amazon, as well as some core human rights principles. A cradle-to-gate EIO LCA emission variable analyzes how much power is consumed extracting raw materials, using energy, transporting goods, and manufacturing a dollar of goods (Righi et. al. 2020). A method of tracking the inputs necessary for the manufacture of goods and services by using economic input-output data collected by governments. To manufacture $10,000 worth of computers in the United States, for example, $1,466 is needed from the computer storage devices industry, $491 from the printed circuit board industry, and so forth. As Amazon progresses up the supply chain, the EIO LCA accounts for the carbon emissions emitted in the production of each of these intermediate inputs and the carbon emissions emitted in the manufacturing of all inputs.
Fuels such as gasoline, diesel, natural gas, biofuels, and hydrogen may be evaluated using the GREET lifecycle assessment tool. According to the EPA, the Department of Energy, the European Union, the United Nations, and the International Council for Clean Transport, vehicle fuel consumption rates are calculated using fuel consumption rates from a range of country-and-region-specific sources. Based on commercial LCA software that maintains a comprehensive repository of peer-reviewed emission components, the emissions model estimates vehicle emissions during manufacture, maintenance, and disposal (including batteries). By reviewing the “Bill of Material” for each device type, Amazon estimates the carbon footprint by using commercially available and publicly available life cycle analysis databases to model each component’s life cycle emissions. As the various stages of a device’s life cycle are modeled, Amazon’s research team estimates how much carbon emissions will be released during manufacturing, transportation, and end-of-life. Using these carbon footprint factors, Amazon estimates the carbon footprint of all devices that it sells in a calendar year in terms of manufacturing, transportation, and end-of-life treatment (Patterson et. al. 2021). For devices reporting energy use in countries where Amazon does not yet match the electricity system, Amazon calculates the emissions related to that country’s electricity system. By combining the annual emissions from all life cycle phases of devices, Amazon calculates the annual emissions for devices.
Figure 4: Life Cycle Assessment
(Source: Golsteijn, 2020)
Recommendations
Based on the preceding study, it can be concluded that the corporation places a strong emphasis on long-term sustainability (Sarkis, 2020). The company makes several attempts to promote its environmental goals and ambitions. At each stage, the company has assured that it can safeguard the environment, prevent pollution, and contribute to sustainable development processes. It attempts to integrate sustainable practices in all aspects of the company, from procurement to customer service. Amazon is well-known for its long-term inventions and developments. As a result, some of the recommendations made above can assist the organization in assuring and supporting sustainable operations at all levels (Adams et. al. 2016). Top management and executives represent the first degree of sustainability. As a result, the company’s board of directors can focus more on holding meetings and conducting performance evaluations to ensure that sustainability is applied at every level of the firm. A sustainability vision can be included in a board’s strategy, and then the performance of others can be measured against those objectives and targets. The board can also appoint some individuals to make this happen and oversee the actions. Another suggestion is to communicate and engage with their staff. The organization’s designated sustainability leader may encourage employee engagement in producing strategies, actions, and ideas that may be used inside the company to make everything accountable. Incorporating a sustainability plan within the company’s strategic documents and vision is insufficient. To preserve this in practice and daily, employee involvement and engagement are essential.
Conclusion
The external environment of modern business has significantly affected Amazon’s evolution. Maintaining the same level of supply chain management consistency will allow it to continue to evolve and grow. The company also intends to increase its investment value by utilizing technology to provide expanded and improved vendor platforms, web administrations, advanced activities, and the expansion of new and existing products. Protected items are among the products of the ecosystem. In addition to minimizing the environmental impact of transportation and electricity generation, as well as business, personal and residential energy consumption, the product ecosystem protects the customer from the very start of the process without fail. The study summarises the sustainability performance of Amazon’s supply chain. This article discusses the social impact, carbon emissions, and challenges Amazon faces in balancing social and environmental considerations.
Furthermore, the report reveals Amazon’s attitude to sustainability and how the corporation obtains its materials in a sustainable manner. It exposes the results of an investigation of the company’s supply chain and procurement operations. Furthermore, the tool picked by the corporation will contribute to the organization’s long-term viability. Finally, the organization makes every effort to guarantee that each of its functions contributes to the long-term sustainable development of the organization.
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