Amazon CEO Jeff Bezos announces the co-founding of The Climate Pledge at the National Press Club on September 19, 2019 in Washington.
Paul Morigi | Getty Images | Amazon
Although Jeff Bezos has stepped away from day-to-day operations at Amazon, his lessons still resonate in the halls. One of those business mantras is a guide to Amazon’s effort to achieve net-zero carbon emissions by 2040.
“Jeff Bezos has, what Amazon has become and is more widely quoted about, an expression that I think is actually quite beautiful.” said Daniel Gross of Amazon during an interview with CNBC correspondent Diana Olick on Thursday during CNBC’s ESG Impact event.
“Good intentions don’t work, mechanisms do.”
Amazon founder Jeff Bezos (via Daniel Gross)
That quote is: “‘Good intentions don’t work, mechanisms do,'” said Gross, director of the company’s climate investment arm, the Amazon Climate Commitment Fund.
“By making the climate pledge, by putting ‘Climate Pledge’ on Seattle’s main lights, by setting aside $2 billion for a climate pledge fund, those are the kinds of mechanisms that will keep us on track to deliver on that pledge.” he said gross.
In 2019, Amazon made its own voluntary commitment to decarbonize by 2040, a decade before the Paris climate agreement deadline. The e-commerce giant also invited other companies to commit to their own climate goals and become members of the organization, which Amazon launched with Christina Figueres Y Tom Rivett-Carnacthe architects of the historic 2015 Paris Agreement.
In 2020, Amazon announced that it had purchased the naming rights to a medium-sized stadium in Seattle and renamed it Climate Pledge Arena. This was meant to be “a regular reminder of the urgent need for climate action,” Bezos wrote on his personal Instagram account at the time.
Representation of Climate Pledge Arena
“We went out, we bought the naming rights to the main hockey stadium and concert arena in Seattle. And we didn’t call it Amazon Arena. We called it Climate Pledge Arena. You drive into downtown Seattle and you see Climate Promise in huge letters,” he said. Gross.
“In a way, it’s like we’ve created a mechanism where it would be so impossible to put the toothpaste back in the tube without humiliating ourselves for keeping that promise,” Gross said.
Another mechanism that Amazon has established is the Climate Commitment Fund, which allocates $2 billion to invest in climate startups that they are working to solve the problems that Amazon is facing.
“We shouldn’t sit idly by waiting for other people to develop the technologies and business models that can help decarbonize our operations, right? Otherwise, we could be waiting until 2040 before anyone has a hydrogen-powered aircraft. or something like that, that works for our operations,” Gross told CNBC.
“Instead, what we should be doing is putting money to work and, more importantly, doing everything we can to invest in companies with our time, with our energy, with our commitments to buy from them,” Gross said.
Investments must meet two conditions, 1/ be viable by conventional venture capital standards, and 2/ work to solve a problem for Amazon.
“We may see a fantastic company that is solving a carbon problem. But if it’s not an Amazon carbon problem, there’s nothing we can really do to help that company. So we limit ourselves to those companies where there is a technology we can adopt, Gross told CNBC.
The startup also has to appear to have a path to profitability.
“We are not a philanthropic organization. We are absolutely in this for profit,” Gross said. That said, if it looks like Amazon’s buying power will allow the startup to be profitable, that’s an option, too.
One of the best known examples is its partnership with the electric car manufacturer. Rivian, in which Amazon owns a stake. “We committed to buying 100,000 electric delivery vans and, not surprisingly, we chose to invest in the company before the IPO,” Gross said.