Amazon.com Inc.
Company Double Materiality Analysis
Important Announcement
Today marks the final day of complimentary access to our Company Double Materiality Analyses through Substack. Going forward, these analyses will be accessible as an exclusive element of the product offering from Sustainable Market Strategies. Don’t worry, we’ll continue to publish insightful content on sustainability themes in our familiar article format.
If you are interested in access to Company Double Materiality Analysis, please reach out. We will be happy to get in touch with you.
A primer describing the Double Materiality approach is available here.
Amazon.com Inc.
Ticker: AMZN US
ISIN: US0231351067
Market Cap: US$1,538 billion
GICS Sector: Consumer Discretionary
SICS Industry: E-commerce
Country: U.S.
SMS theme: Building Better Markets
SMS sub-theme: Sustainability DNA
Contribution to theme: Negative
Company Description
Amazon engages in the provision of online retail shopping services. It provides retail sales of consumer products and subscriptions through regional-focused websites such as www.amazon.com. Its Amazon Web Services segment consists of the global sales of compute, storage, database, and AWS service offerings for start-ups, enterprises, government agencies, etc.
Revenue exposure by country/region: USA (69%), Europe (16%), Asia/Pacific (11%).
Contribution to the sub-theme objectives:
As the largest retailer globally, Amazon has a huge opportunity to encourage sustainable consumption patterns; but the company does little to influence change. Setting a standard for next day at home delivery for everything is excessive and emissions producing. Despite strong ESG practices, the controversies for its treatment of employees and weak product impact are a negative for Amazon.
Sub-theme indicators:
Operational Performance
(Laggard, Aligned or Leader)
Material Topics for E-commerce: hardware infrastructure energy & water management, data privacy & advertising standards, data security, employee recruitment, inclusion and performance, product packaging and distribution.
Assessment: Laggard
The company is on an accelerated path to power global operations with 100% renewable energy by 2025. That said, in 2020, absolute carbon emissions increased 19%. Amazon aims to make 50% of shipment net-zero carbon by 2030.
According to a study AWS’s infrastructure is 3.6 times more energy efficient than the median of U.S. data centers.
In 2020, women earned 100.0 cents for every $ men earned performing same jobs, for minorities it was 99.2 cents.
CSR reports are detailed and they perform well on many metrics. Despite this strong reporting, the company is no stranger to controversy, and is frequently criticized for anti-competitive practices and employee working conditions.
Working conditions, health and safety: In 2022, Amazon accounted for 36% of all U.S warehouse employment while its workers suffered 53% of all injuries, including 4 deaths. Leaked memos reported an attrition/turnover rate between 70% and 83% in 2022 (US transportation avg.: 46%; US transportation warehouse avg.: 59%). Amazon is explicitly against unionization.
Controversies: Amazon faces a few controversies every year. Most recent ones: data breaches, collusion with Apple, safety problems in products sold, infringement of patent rights, trades with sanctioned Iranian entities, etc.
Product/Service Impact
(Negative, Neutral or Positive)
Assessment: Neutral
Amazon started serving customers by unlocking the internet’s power for consumers to be able to shop on-line and access thousands of products anytime, anywhere. Amazon is a leader in e-commerce, has created productivity gains leveraged across multiple industries.
AWS provides computing power to small and medium sized businesses (1 million users).
Amazon supports small businesses and entrepreneurs, with over 1.9 million active merchants. Products from small/medium businesses make up over 50% of sales. Though there have been some controversies regarding anti-competitive behavior.
Amazon has an opportunity to make an impact in sustainable consumption but does not YET achieve this.
SDG Alignment:
A downloadable version of the Double Materiality Analysis of Amazon.com Inc. is available in the pdf attached.
Did you know?Â
Future Positive Investor is just the tip of the iceberg for Sustainable Market Strategies.
Dive deeper into the world of sustainable investing with our cutting-edge research. We produce in-depth, actionable, and forward-looking sustainability-themed research that caters to a global audience of asset managers.
As a client, you receive:
Double Materiality Analyses: Delve into the environmental and financial impacts of specific companies; option to request analyses for specific companies you’re interested in.
Weekly Insights: actionable reports every Thursday, arming you with the latest trends and opportunities.
Bold Investment Ideas: We name names! Get company-specific investment ideas.
Exclusive Research Library: Access to 200+ comprehensive reports covering diverse industries and environmental facets (click here for the complete list).
Direct Q&A: Interact directly with our leading strategy and research minds for personalized insights.
Want to experience it firsthand? Sign up below: