In September 2019, Amazon CEO Jeff Bezos announced a plan in which the company will take leading strides in the fight against climate change. Amazon’s Climate Change Pledge is a plan to make the company carbon-neutral by 2040. Carbon-neutral means that no greenhouse gases, which scientists have proven contribute to overall global warming temperature, will be emitted into the environment.
The goal set by the Paris Climate Agreement was to achieve carbon-neutrality by 2050, but Amazon plans to accomplish this 10 years early. Amazon is now urging other companies to sign the Pledge in hopes that the company can trailblaze the fight against climate change.
“I think all businesses have a social responsibility to help fight climate change and be as sustainable as possible,” says Pat Penfield, director of executive education and professor of supply chain management practice at Syracuse University’s Martin J. Whitman School of Management.
Penfield’s research focuses on natural resource management and sustainability. He says the issue, especially for many small businesses, is the cost of being sustainable while trying to fight climate change.
“An example would be using fossil fuels versus renewable energy sources,” he explains. “Right now, it’s cost-effective in the short term to use fossil fuels versus buying solar panels or a windmill. However, non-renewable fuel prices will go up, so using renewable energy sources does pay for itself over a longer period of time. The issue is that small businesses are fighting to stay in business, and may not be around for the long term.”
During Amazon’s announcement, Bezos stressed that major companies working together are the only way to achieve success in climate efforts, as supply chains are all connected.
“If every company looked at ways to reduce their impact on the environment, we could exceed the goals and objectives of the Paris Agreement,” Penfield explains.
He elaborates that from a supply chain standpoint, if a business turns its supply chain green, it has a higher chance of reducing supply chain costs. A reduction in supply chain costs should then allow companies to see a larger profit.
“Green supply chains are a win/win for the environment and a company,” he says.
The urgency of structural changes that individuals and organizations must make to prevent the worst effects of climate change should be noted.
An ABC article from 2018 looked at a special report by United Nations panel researchers. The report reveals that global temperatures could reach an irreversible tipping point in just more than a decade if the world does not take significant action to reduce the amount of carbon dioxide released into the atmosphere.
Action plans by companies like Amazon are a great example of ways companies can act to help combat the worst effects of climate change.
Penfield says he believes companies should come up with custom environmental plans instead of being mandated by the government to comply with environmental regulations. He elaborated by explaining that when organizations customize environmental strategies to fit the business, they seem to exceed what governmental agencies require or mandate.
“If companies can work together and look for ways to improve their supply chains, we have a great chance to impact climate change and become a sustainable society,” Penfield says.