Back in February, Jeff Bezos pledged to donate $10bn (around 7% of his net worth) to help tackle climate change. It would be interesting to know what sort of reaction he expected. The reaction he got could be summarised as “not bad, but could do much better”. It probably didn’t help that Bezos’ fortune essentially comes from Amazon, a company which has some very questionable business practices. With the spotlight on them right now, as essential suppliers, it will be interesting to see what happens next.
A classic case of greenwashing?
While $10bn is a lot of money by any standards, it has to be put in the context of Bezos’ behaviour in general. To begin with, part of the reason why Bezos can afford that $10bn is because he has become wealthy through the profits of a company which is notorious for its aggressive stance on taxation. How anybody feels about that will probably depend largely on their trust in the tax system, but it is a fact nevertheless.
It’s also a fact that Bezos is liquidating $1bn a year in Amazon stock to fund a space exploration programme called Blue Origin. Humanity’s long-term future may indeed lie in the stars, but its immediate future lies here and there is a lot of action to be taken if we are to stand any serious chance of making it to the stars in the centuries ahead.
It’s also a fact that Amazon has regularly been accused of imposing brutal working conditions on warehouse employees and while the company disputes these claims, it certainly does use zero-hours contracts. Admittedly they are far from the only company who do this but that doesn’t change the controversy over them.
Last, but definitely by no means least, it’s also a fact that Amazon’s warehousing, logistics and haulage operations are pretty much a byword for unsustainable practices. To be fair, Amazon has committed to becoming carbon neutral by 2040 (according to a report it had created its emissions are currently roughly equivalent to those of Norway).
It’ll be interesting to see how Amazon is going to achieve this given that urban last-mile delivery is expected to grow by 78% by 2030 and will require an estimated 36% more delivery vehicles to cover 100 cities and lead to an increase in emissions of around 33%. Perhaps it plans to lighten the load on its vans and drones by cutting back on its notorious packaging.
Lessons for the logistics industry?
It’s easy to point the finger at Amazon, literally and figuratively, they’re probably the biggest target in the world, at least when it comes to logistics and there are several reasons why they got that way, not least of which being their groundbreaking use of technology as a sales tool. It’s also easy to see Amazon as too big to fail, although history is littered with the corpses of those who were too big to fail.
The reality, however, is that the price of criticism is to offer an alternative and, similarly, the way to attract customers from a competitor is to offer something different, which is not necessarily just a lower price. As the reaction to Bezos’ announcement shows, customers are becoming increasingly uneasy with Amazon’s behaviour, which provides a window of opportunity for other companies, including those in the logistics industry.
Although Amazon’s direct competitors are other retailers (and tech giants), those other retailers need a method to get their products from A to B which is at least reasonably close to being as good as anything offered by Amazon – and more sustainable. This is a high bar to jump, whatever else may be said about Amazon, it’s efficient, but it is possible, especially given the fact that many customers are increasingly willing to pay a premium for goods and services which emphasise sustainability.