Amazon’s $2.9bn Climate Pledge Fund to reduce climate change impact

Amazon.com is launching a $2.9bn venture-capital fund focused on technology investments to reduce the impact of climate change.

Amazon aims to reach a goal of ‘net zero’ carbon emissions by 2040

Amazon.com is launching a $US2bn ($2.9bn) internal venture-capital fund focused on technology investments to reduce the impact of climate change, the latest sustainability initiative from the technology giant after criticism of its environmental record.

The new fund, which will be called The Climate Pledge Fund, will invest in companies across a number of industries, including transportation, energy generation, battery storage, manufacturing and food and agriculture, according to the company. The aim is to help Amazon and other companies reach a goal of “net zero” carbon emissions by 2040.

Amazon and a number of other companies are seeking to reduce the climate impact of their operations, both through reduced use of fossil fuels and investments in projects such as reforestation.

“Companies from around the world of all sizes and stages will be considered, from pre-product start-ups to well-established enterprises,” Amazon chief executive Jeff Bezos said in a statement.

“Each prospective investment will be judged on its potential to accelerate the path to zero carbon and help protect the planet for ­future generations.”

Amazon didn’t provide a time horizon for the $US2bn, which it described as “initial funding” that could grow over time. With the fund, Amazon would become a significant corporate player in new energy investing, which has risen significantly in the past decade.

Global venture capital and private-equity investments in clean energy reached $US10.5bn in 2019, up 6 per cent from the previous year and the highest since 2010, according to BloombergNEF.

Investments in new energy ventures and climate change mitigation strategies come from a ­variety of sources, including venture capitalists, billion­aires, governments and comp­anies in energy, car and tech industries.

The trillion-dollar Seattle-based company has come under pressure in recent years for its toll on the environment from delivering millions of packages to its customers each year. Last year, a group called Amazon Employees for Climate Justice wrote an open letter, signed by thousands of employees, urging the company to commit to a deadline to secure 100 per cent of its electricity from renewable sources.

Amazon said its emissions rose 15 per cent in 2019 compared with the previous year, reaching the equivalent of 51.17 million tonnes of carbon dioxide. The company’s net sales rose 22 per cent for the year, and Amazon said on Tuesday the fact emissions increased to a lesser degree than sales was indicative of reduced “carbon intensity” in its operations.

Amazon last year co-founded an initiative called “The Climate Pledge”, which is a commitment to reach carbon-reduction goals set in the Paris Climate Agreement and be carbon-neutral by 2040, or a decade early. Verizon Communications, Reckitt Benckiser and Infosys also recently signed the pledge.

The new fund will “support the development of sustainable and decarbonising technologies and services that will enable Amazon and other companies to meet The Climate Pledge,” a memo from Amazon says.

In 2016, 190 countries committed to reduce greenhouse gas emissions and keep global temperatures from rising more than 2C above pre-industrial levels.

Amazon is no stranger to investing in companies with interesting technology. In 2015, it launched the Alexa Fund, a venture capital arm focused on making investments in start-ups focused on voice technology, with an initial investment of $US100m.

Amazon last year led a $US700m financing round in the electric-vehicle start-up Rivian.