According to a 2018 report from the Intergovernmental Panel on Climate Change, a United Nations body, the cost of a 1.5°C increase in temperatures by 2030 could lead to damage costs of $54tn.
Amazon’s ambitions to address its carbon footprint appear significant. It hopes to power all of its operations with 100pc renewable energy by 2025. By 2030, the aim is to make all Amazon shipments net zero on carbon. Ten years after that, the goal is to be net zero on emissions across the board.
Net zero pledges have their own issues, often relying on murky offsets rather than meaningful changes to business practice.
The $2bn fund announced last week will be targeted at finding emerging technologies with greener solutions for energy storage, transportation and manufacturing.
Paul Griffin, professor of management at University of California, Davis, says the effectiveness of this fund will depend on how it is invested and how transparent any spending and impact information is.
“We would see some fanfare about the funds being awarded, but the activity could be a non-public organisation so we might not see much about what they’re doing with it and what the results were, other than any voluntary reporting, which is going to be a little bit biased to make them look good anyway,” says.
This fund isn’t a charitable venture from Amazon. Figures point to strong returns coming from green investments. Morningstar, a US financial services firm, found investments in environmental, corporate and social governance (ESG) fields placed 66pc of funds targeting these areas in the top halves of their categories.
David Storm, head of multi-asset portfolio strategy at RBC Wealth Management, claims the strength of performance of ESG bets shows they are “more resilient during bear markets” the likes of which have been experienced since the onset of the pandemic.
“While investing in companies with sustainable business practices is worthy on its own, there’s a long-held misconception that doing so comes at a price of lower investment returns,” he says.
Data from Pitchbook, the research firm, found cleantech start-ups in the US raised $7.1bn from venture capital investors in 2018, more than ever before.
Wise investments could also improve the business itself, making it more efficient and helping it prepare for a future affected by the impacts of climate change.
Zoox, the self-driving start-up founded in 2014 and snapped up by Amazon last week, will dovetail into the e-commerce giant’s plans to bring a cleaner means of getting goods to online shoppers who have turned to the company more than ever before during lockdown.
There are some hopes that similar moves from other global entrepreneurs motivated by the financial and PR benefits of being greener could build enough momentum to keep temperatures down.
Larry Fink, the billionaire chief executive of Blackrock, the investment management firm, acknowledged in a letter to clients earlier this year that climate change would accelerate a “fundamental reshaping of finance”.
This is not the first time trendy enthusiasm has sprung up for green investments. Pitchbook data indicates that venture capital investments rose 137pc between 2006 and 2008 in the US cleantech sector, but eventually fizzled out in the aftermath of the 2008 financial crash.
This time around warnings are more urgent and the need more pressing. Scientists estimate that global emissions will need to be halved over the next decade to prevent a catastrophic 1.5 degree climb in global warming.
Amazon employees have been pushing for over a year for the company to take the climate issue seriously, forming a group called Amazon Employees for Climate Justice.
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