Amazon 2023 Sustainability Report: Insights

Insider Brief

• Amazon released its 2023 Sustainability Report, focusing on the company’s progress on meeting its climate and sustainability goals.
• Amazon’s latest sustainability efforts include 36 data centers built with lower-carbon concrete and the implementation of water-positive projects.
• The “Frustration-Free Packaging” program eliminated over 1.5 million tons of packaging materials.

In a world grappling with climate change, can an e-commerce giant become a sustainability champion? Amazon’s 2023 Sustainability Report suggests it’s not just possible, but already happening. From carbon-cutting concrete to water-positive projects, Amazon is redefining what it means to be a responsible global corporation in the 21st century.

This report highlights significant progress in key areas, offering concrete data and examples of initiatives that contribute to Amazon’s overarching sustainability goals. This article dives  into Amazon’s achievements in three main categories: 

1. Environment

• Carbon Reduction: AWS built 36 data centres using lower-carbon concrete, tested low-carbon cement achieving a 64% reduction in embodied carbon, and reduced steel content in data centres to save emissions.
• Water Management: Implementation of water-positive projects such as rainwater harvesting systems and water recycling programs, contributing to significant water usage reduction.
• Packaging: The “Frustration-Free Packaging” program eliminated over 1.5 million tons of packaging materials by 2023. The “Climate Pledge Friendly” label promotes environmentally responsible consumption.

2. Value Chain

• Supplier Assessments: Suppliers of Amazon-branded products were evaluated for compliance with labour rights, ethics, environment, and health and safety standards using independent audits.
• Transparency: Engagement with the Open Supply Hub to list production facilities and collaboration with IOM to promote human and labour rights for migrant workers.
• Supplier Diversity: Amazon spent $4.3 billion with over 500 certified U.S. Tier 1 diverse suppliers, supporting 30,000 jobs and generating $2.8 billion in wages. The “Supplier Leadership on Climate Transition” program saw over 200 suppliers committing to emissions reductions.

3. People

• Inclusive Standards: Implementation of born-inclusive standards across operations to embed equity and inclusion into products and talent strategies.
• Health and Safety: Prioritised safe working conditions and fair treatment, with 100% of supplier employee grievances investigated and resolved.
• Employee Development: The “Career Choice” program enabled over 100,000 employees to upskill, and the “Pay to Quit” program offered financial incentives for employees to pursue other opportunities.

Impressive Statistics

Amazon’s 2023 Sustainability Report showcases numerous achievements that underline the company’s commitment to sustainability. Here are some of the standout statistics:

• Data Centers: AWS built 36 data centres using lower-carbon concrete, a significant increase from 16 in 2022.
• Carbon Reduction: The use of low-carbon cement in data centres resulted in a 64% reduction in embodied carbon.
• Steel Savings: AWS reduced steel content in its data centres, saving 70 tons for two-story and 137 tons for three-story facilities.
• Packaging Reduction: The “Frustration-Free Packaging” program eliminated over 1.5 million tons of packaging materials.
• Supplier Diversity Spend: Amazon spent $4.3 billion with over 500 certified U.S. Tier 1 diverse suppliers, supporting 30,000 jobs and generating $2.8 billion in wages.
• Water Management: Implementation of water-positive projects, such as rainwater harvesting and water recycling programs, significantly reduced water usage.
• Career Development: The “Career Choice” program enabled over 100,000 employees to upskill and advance their careers.

Environment

Amazon is building a greener future. From carbon-cutting concrete to steel savings and smart water use, the company is unwrapping new packaging solutions. In 2023, Amazon made notable advancements in reducing its carbon footprint.

Amazon Web Services (AWS) is becoming a key driver of progress on Amazon’s Climate Pledge, committing the company to achieving net-zero carbon emissions by 2040. Through the integration of low-carbon building materials (e.g., concrete), AWS achieved a 64% reduction in embodied carbon compared to the industry average across the 36 newly minted data centres, up from 16 in 2022.

Additionally, AWS reduced steel content in its data centres by incorporating higher-strength steel, saving 70 tons for two-story and 137 tons for three-story data centres. These changes resulted in a reduction of 63 and 124 metric tons of CO2e, respectively. 

The use of the Embodied Carbon in Construction Calculator (EC3) was instrumental in benchmarking and reducing the embodied carbon of building materials. In 2023, 231 building contractors across 47 companies and 26 countries utilised EC3 to enhance their carbon reduction strategies.

From clouds in the sky to the cloud in tech, Amazon is making waves with its innovative approach to water management

 Implementing several initiatives focused on improving consumptive efficiency-the company is demonstrating a clear commitment to promoting  strong stewardship practices. The innovations include: 

• Amazon’s water-positive projects, such as rainwater harvesting systems and water recycling programs, have significantly contributed to reducing water usage in its facilities.
• For example, at one of its largest fulfilment centres, Amazon implemented a state-of-the-art water recycling system that reduced the facility’s water consumption by 30%, showcasing the potential impact of such initiatives on operational sustainability.

On the  packaging front, Amazon’s “Frustration-Free Packaging” program, launched in 2008, remains core to the organisation’s waste reduction efforts. By 2023, the program had eliminated over 1.5 million tons of packaging materials. 

The company has also introduced its “Climate Pledge Friendly” label- aimed at enabling pro-environmental consumer behaviour 

In terms of transportation, Amazon is shifting gears to drive sustainability right to their customer’s doorsteps.

2023 saw the company continue to expand its fleet of electric delivery vehicles, paralleled with investments targeting sustainable logistics solutions. For example, Amazon ordered 100,000 electric delivery vehicles from Rivian, a move expected to reduce emissions by millions of metric tons annually.

Value Chain

When ethical production meets global transparency- Amazon maps its supply chain, empowering diverse suppliers while rallying its partners for climate action.

In 2023, Amazon’s value chain initiatives aimed at fostering transparency and traceability  across its global operations. The company put its Amazon-branded product suppliers under the microscope, scrutinising everything from labour practices to environmental footprints. This wasn’t just a cursory glance – with independent auditors armed with globally recognized standards like Sedex Members Ethical Trade Audit (SMETA) and the Responsible Business Alliance (RBA) leading the process. The needle doesn’t stop there. Amazon’s value chain also benefited from a series of targeted efforts including:

• Engagement with Open Supply Hub (a collaborative supply chain mapping platform),helping the company identify and track facilities  that produce Amazon-branded products. Boosting visibility, the hub now allows Amazon customers to This initiative interact more effectively with the company’s supply chain. 
• Collaboration with the International Organization for Migration (IOM)-promotingrespect for the human and labour rights of migrant workers in global supply chains.

Supplier diversity was a key focus area, with Amazon spending $4.3 billion with over 500 certified U.S. Tier 1 diverse suppliers. This supported 30,000 jobs and generated $2.8 billion in wages. Additionally, the company reported $1.5 billion of Tier 2 certified diverse spending by more than 200 U.S. suppliers, contributing to local economic growth. These efforts show Amazon’s commitment to fostering an inclusive and equitable supply chain.

Amazon also launched the “Supplier Leadership on Climate Transition” (Supplier LoCT) program, which offers suppliers resources and support to set science-based targets and reduce their carbon footprints. By the end of 2023, over 200 suppliers had joined the program, collectively committing to significant emissions reductions.

People

Designing inclusivity, prioritising safety, and amplifying voices- Amazon is investing in its people from factory floor to career advancement.

With a focus on people, 2023 encompassed efforts to foster inclusive and equitable experiences for employees, customers, and communities. Most notably, the company has implemented born-inclusive standards across its operations, embedding equity and inclusion into the architecture of its products and talent strategies.

Health and safety were paramount, with Amazon emphasising safe and healthy working conditions throughout its supply chain. 

The company is working closely with suppliers to communicate standards, evaluate risks, and help build capacities for safer work environments. This approach included prioritising areas such as gender equity, fair wages, responsible recruitment, and environmental protection.Amazon’s commitment to its workforce goes beyond mere lip service, as evidenced by its robust grievance resolution system. In 2023, the company achieved a 100% investigation and resolution rate for supplier employee grievances across seven countries. 

This isn’t just about putting out fires; it’s about creating a culture of trust and accountability throughout the supply chain. By ensuring every voice is heard and every concern addressed, Amazon is setting a new standard for worker empowerment in the global marketplace.

But Amazon’s vision extends beyond conflict resolution. The company is actively investing in its employees’ futures through innovative programs:

• Career Choice: More than just a tuition assistance program, Career Choice is a ladder to opportunity. By pre-paying 95% of tuition for high-demand fields, Amazon has enabled over 100,000 employees to reimagine their career trajectories. This isn’t just about job training; it’s about life-changing education that can elevate entire families and communities.
• Pay to Quit: In a bold move that challenges conventional retention strategies, Amazon’s “Pay to Quit” program offers employees financial incentives to leave if they’re unsatisfied. This approach sends a powerful message: Amazon values genuine engagement over mere retention. The result? A more motivated, aligned workforce and a corporate culture that truly walks the talk on employee satisfaction.

These initiatives are more than just HR policies; they’re transformative forces reshaping the relationship between employer and employee. By investing in worker voice, career development, and job satisfaction, Amazon is creating a ripple effect that extends far beyond its own workforce. The company is setting new benchmarks for worker treatment in the global economy, potentially influencing labour practices across industries.

In the broader context of Amazon’s 2023 Sustainability Report, these worker-focused initiatives form a crucial pillar of the company’s holistic approach to sustainability. They demonstrate that true sustainability isn’t just about environmental metrics or supply chain efficiency—it’s about nurturing the human capital that drives innovation and growth.

As Amazon continues to refine and expand these programs, the potential impact is profound. We could be witnessing the early stages of a paradigm shift in how global corporations approach worker empowerment and satisfaction. 

The true test will be in the long-term outcomes: Will these initiatives lead to increased productivity, innovation, and worker loyalty? Will they inspire similar programs across the industry? 

Only time will tell, but one thing is clear: Amazon is betting big on the power of an empowered, satisfied workforce to drive its sustainability goals and business success.

Looking Ahead 

Looking ahead, Amazon has set ambitious goals to drive further sustainability. 

The company plans to expand its fleet of electric delivery vehicles, continue improving packaging solutions, and invest in renewable energy projects. These initiatives aim to reduce Amazon’s carbon footprint and contribute to a more sustainable future. Additionally, Amazon will continue to prioritise diversity and inclusion across its operations, fostering a more equitable workplace and supply chain.

Opportunities abound for Amazon to leverage its scale and resources to make a significant impact. By investing in innovative technologies, collaborating with stakeholders, and maintaining a commitment to transparency and accountability, Amazon can lead the way in corporate sustainability. The company’s ongoing efforts to upskill employees, promote fair labour practices, and enhance supply chain resilience will be instrumental in achieving its long-term sustainability goals.

However, one of the primary challenges Amazon faces is achieving net-zero carbon emissions by 2040. While significant progress has been made, this ambitious goal requires continuous innovation and investment in renewable energy, energy efficiency, and low-carbon technologies. Amazon will need to expand its use of sustainable building materials and further decarbonize its transportation and logistics operations to meet this target.

Supply chain sustainability remains another complex challenge. Ensuring that all suppliers adhere to high standards of labour rights, ethics, and environmental practices demands rigorous monitoring and ongoing improvements. Amazon’s efforts to enhance supply chain transparency and collaborate with organisations like the International Organization for Migration (IOM) are crucial in addressing these challenges and promoting responsible practices.