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W20800

AMAZON: CUSTOMERS AND CLIMATE CHANGE1

Veena Keshav Pailwar wrote this case solely to provide material for class discussion. The author does not intend to illustrate either
effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying
information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) [email protected]; www.iveycases.com. Our goal is to publish
materials of the highest quality; submit any errata to [email protected]. i1v2e5y5pubs

Copyright © 2020, Ivey Business School Foundation Version: 2020-09-29

On September 9, 2019, thousands of employees of the US head office of Amazon.com Inc. (Amazon), in
Seattle, Washington, violated the company's external communication policy2 by threatening to join the
global climate strikes planned for the week of September 20–27.3 The employees were protesting against
the company’s practices that they felt were contributing substantially to climate change. 4 Pressure to change
the company’s practices was intensifying—not only from employees but also from various non-
governmental environmental organizations and some politicians.5 These groups advocated for greater
disclosure by public companies to reveal their carbon footprint and any initiative to reduce climate risk.

Led by US President Donald Trump, the ruling Republican Party controlled the United States Senate and did
not consider climate change a major concern.6 The Democratic Party, however, which controlled the United
States Congress, had been pushing for tighter disclosure norms for public companies by repeatedly
introducing into the United States Senate a bill for the Climate Risk Disclosure Act.7 If the bill were to be
passed by the United States Senate and signed by the president, the act would require US public companies
to disclose several climate-related risks to their shareholders and to the public.

Amazon, however, was a customer-centric company that aimed to maximize shareholder value over the long
term (see Exhibit 1).8 Given Amazon’s business model, estimating and reducing its carbon footprint was a
Herculean task. In addition, greater transparency could make environment-conscious consumers more
informed and more aware, compelling Amazon to take even more initiatives to reduce its carbon footprint.
Amazon needed to decide whether to continue pursuing its customer-centric approach or introduce new
transparency initiatives to address climate-related issues.

AMAZON: EXPANSION, GROWTH, AND BUSINESS MODEL

In 2019, Amazon was the world’s largest online retailer9 and web services provider in terms of revenue,10
as well as the most valuable brand.11 The company employed more than 630,000 workers worldwide.12
Amazon was initially set up as an online bookstore in 1994. Jeff Bezos, the company’s chief executive
officer, operated the company with the motto “Grow Big and Fast,”13 which led to rapid expansion. By
2018, the company was selling a vast variety of products and services, including consumer electronics, toys,
home improvement items, fashion apparel and accessories, groceries, videos, movie streaming, cloud
services, online advertising, web-based logistics, and publication services through its e-commerce site and

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subsidiaries located across all of the world’s continents.14 To ensure extensive control over its global e-
commerce operations and to withstand the effects of competition, Amazon followed a hierarchical
organizational structure.15 To expand its customer base and improve profitability, Amazon adopted different
business models for its range of product and service offerings that focused on four key areas: Amazon
Retail16, Amazon Prime17, Amazon Web Services (AWS) 18, and Amazon Advertising19.

Amazon Retail

Amazon’s retail business was based largely online, with limited offline presence. It operated in a variety of
ways, using both first-party (or direct) and third-party vendor sales. For first-party vendor sales, Amazon
mainly purchased in the wholesale market, maintained inventories of the purchased items, and controlled
the pricing of products with a small markup.20 For third-party sales, Amazon provided its online platform
on a commission basis for other retailers to sell their products to buyers.21 Some orders were fulfilled by
Amazon; others were fulfilled by third-party vendors. The share of third-party vendor sales increased
continuously from 3 per cent in 1999 to 58 per cent in 2018.22 Therefore, most products that Amazon
shipped were technically neither part of its inventory nor recorded on its balance sheet. In 2018, to meet its
e-commerce operations, Amazon controlled more than 288 million square feet (27 million square metres)
of real estate, consisting of warehouses, fulfillment centres, sortation centres, delivery hubs, and office
space.23 However, Amazon owned only 11 million square feet (1 million square metres) of this space.24 The
rest of the space was leased. To ship items from its fulfillment centres, rather than owning a fleet of trucks
and delivery vans, Amazon relied heavily on delivery partners and drivers, who acted as third-party service
providers engaged by Amazon as required.25

Amazon Prime

Amazon offered some products and services, such as Amazon Prime, through a subscription business
model. For a given annual membership fee, Amazon Prime members were provided various services,
including free shipping on one-day delivery of qualifying items and streaming access to digital music,
movies, television shows, and e-books. Amazon Prime members were also provided with unlimited storage
space for their photographs. As part of this business model, Amazon was testing a proposed delivery service
called Amazon Prime Air, which aimed to deliver small parcels within 30 minutes via drones.26 By early
2019, Amazon Prime had reached over 100 million subscribers in the United States alone.27

Amazon Web Services

AWS provided over 100 web services, including computing, storage, data management, networking,
monitoring, security, governance, analytics, and artificial intelligence on a pay-as-you-go basis. AWS used
a pricing scheme similar to the one used by basic utilities such as water, electricity, or telephone services,
allowing customers to pay only for the amount of cloud-based services they used, without requiring long-
term contracts or complex licensing terms. AWS helped Amazon to expand its reach to small and medium
industries and to capture a significant portion of the cloud market. Major AWS customers included Netflix
Inc., Twitch, LinkedIn, Facebook Inc., and Turner Broadcasting System Inc. 28 In total, over 2.6 million
companies used AWS.29 Some estimates indicated that AWS controlled 51 per cent of the cloud
infrastructure services market,30 which was higher than the combined share of its three major rivals: Google
LLC, Microsoft Corporation, and International Business Machines Corporation (IBM). 31 Even though
Amazon was the world’s largest online retailer, the bulk of its operating income came from the AWS
business (see Exhibit 2).32

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Amazon Advertising

Amazon charged other companies to promote their products online. Amazon’s vast database of customer
purchase behaviour provided a distinct competitive advantage in the digital advertising market over
competitors such as Google LLC and Facebook Inc.33 Because Amazon’s businesses were spread across
various industries, the company could provide its customers with advertising over various different markets,
including online retail, movie and music streaming, gaming, and even delivery services. Amazon also
provided advertising space to companies that operated outside the Amazon sphere.34

CARBON FOOTPRINT AND CRITICISM

To reduce the adverse impact of its activities on the Earth’s climate, Amazon had taken several steps. The
company had made a considerable investment in solar and wind power projects and in a packaging program
that eliminated waste through the company’s supply chain. However, many critics were skeptical of these
efforts.35 All major Amazon business domains and processes were accused of increasing the world’s total
carbon emissions.36

Impact of Amazon Retail

Online purchases were seen as being helpful to the environment by eliminating customers’ in-person visits to
physical stores, which saved fuel consumption and thus reduced carbon emissions that caused damage to the
world’s climate. However, new practices adopted by Amazon, such as a free shipping on one-day delivery for
all Amazon Prime members, were reversing the advantages that online shopping had gained. The free shipping
enticed customers to place multiple orders, rather than efficiently planning purchases into a single order
delivered in one shipment. The new schemes led to faster shipping, smaller package sizes, and more delivery
trips, which led to higher levels of carbon emissions. In 2017, the non-profit environmental advocacy group
350 Seattle estimated that Amazon’s package deliveries alone emitted 19 million tonnes of carbon, roughly
equivalent to the total annual carbon emissions of 4.7 coal-fired power plants.37 However, because most of
Amazon’s retail goods were sold by third-party businesses that operated from Amazon’s leased spaces, the
company shifted the sustainability issue to its service partners in the supply chain.38

Impact of Amazon Web Services

Given its rapid growth and constantly increasing size, AWS was expected to leave a larger carbon footprint
than Amazon’s retail online business and shipping operations. AWS was supported by various data centres
scattered across the world.39 Most of them, however, were located in the US state of Virginia’s Loudoun
County, in what was known as Ashburn’s Data Center Alley, where 70 per cent of the world’s Internet
traffic passed through.40 In a 2019 report, the global non-governmental environmental organization
Greenpeace claimed that only 12 per cent of the data centre’s energy consumption came from renewable
energy sources (see Exhibit 3).41 Of 15 major Internet companies for which Greenpeace reported data, only
three used a substantial amount of renewable energy: Apple Inc. used 100 per cent renewable energy for its
operations, Facebook Inc. used 37 per cent, and Microsoft Corporation used 34 per cent. 42

As the report emphasized, major Internet companies that showed leadership in meeting renewable energy
goals could influence other companies to do the same.43 But AWS had failed to keep its commitment to
become a leader in this respect, while its consistent growth in cloud computing capacity continued to
increase its carbon footprint.44 In another report, Greenpeace ranked Amazon 12th among 15 major Internet

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companies, with a clean energy index of 17 per cent and an overall grade of C (see Exhibit 4),45 well below
major competitors such as Microsoft Corporation and Google LLC (see Exhibit 5).

Along with the increase in its client base, Amazon continued to expand its capacity of data centres without
expanding green sources of energy to run them. Criticizing Amazon for its non-commitment, Elizabeth
Jardim, senior corporate campaigner at Greenpeace, commented on the current state and future issues
related to Amazon’s failings in regard to renewable energy:

Despite Amazon’s public commitment to renewable energy, the world’s largest cloud computing
company is hoping no one will notice that it’s still powering its corner of the internet with dirty
energy. . . . Unless Amazon and other cloud giants in Virginia change course, our growing use of
the internet could lead to more pipelines, more pollution and more problems for our climate. . . .
It’s time for Jeff Bezos to think beyond profit and accept responsibility for Amazon’s impact on
the global climate.46

Expressing discontent over a lack of corporate social responsibility, climatologist Michael Mann stated,
“There is a deep irony that the very companies that are supposed to represent the leading edge of
technological innovation and advancement are actually taking us backward.”47

Serving Companies from the Oil and Gas Sector

In addition to using mainly electricity generated from fossil fuels to power its data centres, Amazon was
accused of targeting companies from the oil and gas sector. In 2019, oil accounted for approximately one-
third of the world’s total carbon emissions, while gas accounted for one-fifth. Therefore, these companies
had extensive carbon footprints. Amazon’s AWS clients included some giants from the fossil fuel industry:
Gulfmark Offshore Inc., the world’s premier provider of offshore marine services; Seaoil Philippines Inc.,
the largest independent oil company in the Philippines; Saudi Aramco, Saudi Arabia’s state-owned
company; and Mitsui Coal Holdings Pty. Ltd., a Japanese coal investment company. 48

To lure oil and gas giants, Amazon offered them attractive deals; to retain them, it generated demand for their
products by powering its own data centres with their fossil fuels. Cloud computing services such as AWS
helped these companies increase productivity by stimulating exploration, oilfield automation, and data
transportation from remote sites.49 Increased productivity led to comparatively lower prices for fossil fuels
and discouraged users from adopting green sources of energy. The oil and gas sector accounted for almost 10
per cent of the total cloud computing market.50 Microsoft Corporation had the largest number of clients from
the oil and gas sector,51 but AWS held the largest share in the cloud computing market.52 Therefore, losing oil
and gas clients would hurt AWS’s chances of retaining its competitive lead in the market.

Lack of Transparency

One reason why Amazon attracted skepticism from critics was its lack of transparency in disclosing carbon
emission information.53 For example, Amazon ignored requests for details from CDP (formerly the Carbon
Disclosure Project), a group that had been collecting information on carbon performance from investors,
companies, and cities since 2002.54 CDP had graded Amazon an F since 2010 because of its failure to
comply.55 Greenpeace had also assigned an F grade to Amazon for its lack of disclosure.56

In the past, Amazon had shown considerable interest in fighting climate change. For example, in 2014, the
company had committed to operate its global infrastructure fully on renewable sources of energy. In 2016,

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Bezos had shown an interest in Microsoft Corporation founder Bill Gates’s multibillion-dollar investment
fund dedicated to fighting climate change.57 However, despite its pledge and interest, Amazon had not
announced any new project to supply clean energy to its data centres since 2016.58 In 2018, it also
abandoned a wind farm project that the company had announced in Texas in 2017.59 Critics attributed
Amazon’s change of direction regarding green energy to its decision to lure giant oil and gas sector clients. 60

In its 2019 report, Greenpeace highlighted Amazon’s departure from its 2014 commitment to use 100 per
cent renewable energy for its data centres.61 Gary Cook, a senior analyst and energy campaigner at
Greenpeace, described Amazon as “completely nontransparent,” making it difficult to estimate Amazon’s
carbon footprint on the planet.62 Cook attributed the lack of transparency and a casual approach to a change
in leadership in various Amazon departments: “The new direction was that buying renewables directly is
not something we want to be doing, not something we want to pay for it, it’s not enough of a priority for
customers.”63

Meeting Renewable Energy Commitments

Many US states had imposed renewable energy commitments on their power utilities, requiring them to
generate a minimum amount of energy from renewable sources. Utilities that generated more than the
minimum amount were rewarded with renewable energy certificates (RECs) that could be sold in the open
market to other utilities that fell below their minimum renewable energy level. RECs could also be sold to
corporations as incentive for meeting voluntary clean energy commitments. Purchasing RECs, however,
did not provide renewable energy. The REC purchaser could continue to use power generated from fossil
fuels, but the purchased RECs confirmed that green energy had been generated by another company to help
the purchaser meet its renewable energy commitment. For example, Amazon powered a large part its data
centres using fossil fuels, but the company met its clean energy commitments by purchasing RECs. Such
measures forced fossil fuel users such as Amazon to buy RECs, but did not reduce the pollution emanating
from powering giant data centres.64

Funding Political Parties and Climate Deniers

Similar to many major US technology companies, Amazon attempted to remain politically impartial by
donating relatively equally to candidates of both US political parties (see Exhibit 6). However, climate
change activists did not see this strategy as being impartial. They interpreted Amazon’s actions as a major
threat and demanded a stop to funding politicians opposed to climate change policies, including 68
Members of Congress who voted against climate change legislation 100 per cent of the time.65 They also
opposed funding to the Competitive Enterprise Institute, a group that advocated for the United States to
withdraw from the Paris Agreement.66 Under the United Nations Framework Convention on Climate
Change, the Paris Agreement required signatory countries to help keep the world’s temperature within 2
degrees Celsius of pre-industrial levels.67

SHAREHOLDER RESOLUTION AND EMPLOYEE PROTEST

The climate change protest by the Amazon employees was not new. On November 28, 2018, a group of
Amazon employees used their power as shareholders to file a climate resolution with the US Securities and
Exchange Commission.68 The employees called on Amazon’s board of directors for more transparency and
specific timed steps to reduce Amazon’s carbon footprint. In response, Amazon launched its Shipment Zero
initiative in February 2019, aimed at achieving 50 per cent net-zero shipments by 2030.69 Amazon also

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announced that it would disclose the company’s emission data later in the year. However, critics quickly
pointed out three key shortcomings of the initiative: (1) given Amazon’s growth rate, a 50 per cent reduction
in emissions would mean that Amazon’s activities in 2030 would not be any better than in 2019; (2) the
“50 per cent net-zero” promise in the commitment would allow Amazon to continue polluting areas where
vulnerable communities lived and invest in clean energy in the other areas to offset its emissions; and (3)
the Shipment Zero initiative did not address the emissions problem in Amazon’s AWS business. 70

The protesting employees, who referred to themselves as Amazon Employees for Climate Justice, urged
other employees to sign an open letter on climate plan resolution addressed to Bezos and Amazon’s board
of directors.71 On April 10, 2019, thousands of Amazon employees across the world, ranging from
warehouse workers to engineers to salespeople, signed the open letter urging Amazon to immediately
address the issue of climate change.72 The letter called for Amazon to go beyond its plan to reduce emissions
by 50 per cent by 2030 to eliminate 100 per cent of emissions by 2050. It asked Amazon to move away
from fossil fuels entirely, rather than using RECs, and to prioritize emission reduction in communities most
affected by pollution. Amazon was asked to refrain from targeting the oil and natural gas industry for
business, and to stop all donations to politicians that opposed action on climate change. 73 The letter also
confirmed the company’s ability to meet its objectives:

Amazon has the resources and scale to spark the world’s imagination and redefine what is possible
and necessary to address the climate crisis. We believe this is a historic opportunity for Amazon to
stand with employees and signal to the world that we’re ready to be a climate leader.74

The climate change advocacy group 350 Seattle supported the shareholder resolution and was critical of
Amazon’s initiatives to reduce its carbon footprint.75 Glass Lewis & Co. and Institutional Shareholder
Services Inc., the largest proxy advisory firms in the United States, recommended voting in favour of the
letter’s resolution.76

However, in a proxy statement, the Amazon board of directors stated that Amazon had already initiated
several steps to reduce its carbon footprint, including frustration-free packaging, shipping in company-
owned containers, investments in solar power and windmill farms, solar panels on its fulfillment centre’s
rooftops, and the Shipment Zero plan to reduce 50 per cent of emissions by 2030.77 The board of directors
also highlighted its intention to disclose the company’s carbon footprint information later in the year.
Finally, the company recommended that shareholders vote against the resolution.78

On May 22, 2019, Amazon held its annual shareholders’ meeting. The letter’s resolution was rejected by
41 per cent votes against, compared with 31 per cent of votes in favour. Abstentions counted as votes against
the resolution, which helped it to fail (see Exhibit 7).79 Despite the resolution’s failure, however, the number
of shareholders who voted in favour was higher than for any sustainability resolution votes in the past. 80

Actions by Amazon employees who had driven the climate change initiative continued after the annual
shareholders’ meeting. They persisted their appeal for Amazon to be a leader in climate change issues by
achieving zero emissions by 2030, zero custom AWS contracts for fossil fuel companies, and zero funding
for climate denying lobbyists and politicians. Almost 1,000 Amazon workers pledged to walk off their job
and join the global climate strikes scheduled for September 20–27, 2019.81 Employees of the other major
technology companies, such as Google LLC and Microsoft Corporation, also pledged to join the strikes. 82

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CHANGING CONSUMER PREFERENCES AND THREATENING COMPETITIVE SPACE

In many parts of the world, climate change issues had reached alarming levels. Growing awareness and
concern about the global environment and forecasted ill effects were boosting demand for environmentally
sustainable products and services. More than 80 per cent of respondents to an online global consumer
confidence survey conducted by the global data analytics company Nielsen Holdings PLC agreed that major
companies should participate in improving the environment.83 The analytics company’s executive director,
Regan Leggett, confirmed the survey’s results: “Sustainability has become an urgent opportunity for
companies to connect with customers who are excited about change.”84

Pressure toward a shift to sustainable sources of energy was also building among major global retailers,
both online and traditional, who were eager to adopt a more responsible and environmental image. Retail
giants such as eBay Inc., B2W, Zalando SE, Walmart Inc., Tesco PLC, and Carrefour S.A. were working
diligently to reduce their carbon footprints.85 They were also actively engaging their suppliers to meet the
criteria set out by the Science Based Targets Initiative,86 which asked companies to look beyond their own
company to help reduce the carbon footprint of companies within their supply chains that contributed more
than 40 per cent of their total emissions.87

Despite mounting pressure from consumers to adopt sustainable energy sources and practices, companies
needed to consider the limited availability and high costs of shifting to green energy. Amazon’s rapid
expansion strategy and customer-centric approach, which had led to quick delivery and lower prices, would
undoubtedly be negatively affected. Amazon needed to respond to pressure from consumers and other
companies. It could adopt a confrontational approach and continue to focus on its customer-centric strategy
in pursuit of shareholder interests. Or, it could instead opt for a more co-operative stance by openly
disclosing its carbon footprint information and changing its business model to a more sustainable approach.
Which option would provide Amazon with greater competitive advantage?

Veena Keshav Pailwar is a faculty member at the Institute of Management Technology in Nagpur, India.

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EXHIBIT 1: AMAZON.COM INC. LEADERSHIP PRINCIPLES

Customer Obsession: Amazon expected its leaders to follow a customer-centric approach so as to


improve customer satisfaction with its products and services.

Ownership: The professionals leading the various departments of Amazon were expected to work with
a long-term perspective rather than with short-term results.

Invent and Simplify: Amazon expected its leaders to simplify different operations and processes by
continuously innovating the new methods and the processes.

Are Right, A Lot: Rather than basing decisions on one’s own beliefs, Amazon guided its leaders to take
into account diverse perspectives when making decisions.

Learn and Be Curious: Amazon expected its leaders to continuously upgrade their skills and
knowledge, and to explore the new possibilities.

Hire and Develop the Best: Amazon recognized exceptional talent and expected its leaders to nurture
and develop that talent to take up the higher responsibilities.

Insist on the Highest Standard: The leaders were expected to follow high standards while delivering
the products, performing the services, and implanting the processes. They were expected to identify the
problems and fix them in the earlier stages so that they did not get passed on to the later stages.

Think Big: Amazon expected its leaders to take bold directions to improve customer satisfaction.

Bias for Action: Amazon believed in quick decision-making and calculated risk-taking.

Frugality: Amazon expected its leaders to work toward minimizing expenses by restraining the
expansion of the staff, the budget, and the fixed expenses.

Earn Trust: The leaders were expected to respect others by listening attentively and speaking candidly.
They were expected to earn trust by following the best practices in the industry.

Dive Deep: Amazon expected its leaders to look into the minute details, audit frequently, and be skeptical
whenever they noted a deviation from the expected outcome.

Have a Backbone, Disagree, and Commit: The leaders were expected to respectfully challenge
decisions whenever they disagreed. But once a decision was taken, they were required to stay by those
decisions and to not compromise for the sake of social cohesion.

Deliver Results: The leaders were expected to deliver the right quality on time and never to compromise
on it.

Source: Adapted by the case author from About Amazon Staff, “Our Leadership Principles,” Amazon.com Inc., accessed
January 10, 2020, www.aboutamazon.com/working-at-amazon/our-leadership-principles.

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EXHIBIT 2: AMAZON.COM INC. SALES, EXPENSES, AND INCOME, 2016–2018 (IN US$ MILLION)

Segment 2016 2017 2018


North America
Net sales 79,785 106,110 141,366
Operating expenses 77,424 103,273 134,099
Operating income 2,361 2,837 7,267
International
Net sales 43,983 54,297 65,866
Operating expenses 45,266 57,359 68,008
Operating income (1,283) (3,062) (2,142)
Amazon Web Services
Net sales 12,219 17,459 25,655
Operating expenses 9,111 13,128 18,359
Operating income 3,108 4,331 7,296
Source: Amazon.com Inc., Annual Report 2018, accessed February 9, 2020,
www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AMZN_2018.pdf.

EXHIBIT 3: GREENPEACE

Founded in Vancouver, Canada, in 1971, Greenpeace was an independent non-governmental campaigning


network of 27 independent regional and national organizations spread across 55 countries with its
registered office in Amsterdam. It was established to promote sustainability of the environment by protecting
biodiversity, preventing pollution, and controlling nuclear threats. It received most of its income from grants
and donations from private sources. In 2018, it received approximately 98 per cent of its income from such
sources. Because it received most income in the form of donations from individuals and grants from private
sources, it was independent of political and corporate interests. Greenpeace was cash-rich, with excellent
marketing abilities to generate revenues and build up a strong brand image. Traditionally, while dealing
with issues related to environmental sustainability, Greenpeace followed a confrontationist but non-violent
approach. Later, it augmented its confrontationist approach by offering alternative solutions on the problems
it raised to companies that showed a willingness to reach sustainable solutions.

While carrying out its campaigns, Greenpeace broadly followed three strategies. The first strategy was
peaceful direct action through public confrontation. The second strategy included investigation and public
education through the collection and publication of relevant material and the distribution of information
through brochures, posters, stickers, and press materials. It also included dialogue with large groups,
information stands at the street level, collection of signatures, protest postcards, and marketing-focused
television shows and advertisements. The third strategy included lobbying on its own and in collaboration
with other environmental organizations, government officials, influential political parties, and presidential
candidates. Greenpeace had previously influenced public politics by routing donations from its members to
presidential candidates and various members of the United States Senate and House of Representatives.
It also ranked presidential candidates based on their climate change views and policies.

Source: Prepared by the case author with information from Greenpeace International, Stitching Greenpeace Council and
Related Entities, Annual Report 2018, June 28, 2019, accessed February 20, 2020, https://storage.googleapis.com/planet4-
international-stateless/2019/06/de3fd269-gpi-combined-financial-statements-2018.pdf; Amy Tikkanen, “Greenpeace,”
Encyclopaedia Britannica, accessed January 5, 2020, www.britannica.com/topic/Greenpeace; Gilles-Philippe Page,
“Greenpeace’s Campaign Strategies,” Peace Magazine, July 1, 2004, accessed February 20,
http://peacemagazine.org/archive/v20n3p13.htm; “Greenpeace,” Open Secrets, accessed February 24, 2020,
www.opensecrets.org/orgs/totals.php?id=D000051523&cycle=A; Zoya Teirstein, “Greenpeace Graded All the Presidential
Candidates’ Climate Policies. They Weren’t Impressed,” Mother Jones, June 3, 2019, accessed March 1, 2020,
www.motherjones.com/environment/2019/06/greenpeace-graded-all-the-presidential-candidates-climate-policies-they-
werent-impressed; Willie Soon and Patrick Moore, “Analysis of Greenpeace Business Model,” Heartland, December 14, 2018,
accessed May 13, 2020, www.heartland.org/publications-resources/publications/analysis-of-greenpeace-business-model.

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EXHIBIT 4: INTERNET COMPANIES’ CLEAN ENERGY SCORECARD

Clean Natural Coal Nuclear Energy Renewable Energy Renewable Advocacy Final
Energy Gas (in %) (in %) Transparency Energy Efficiency and Procurement Grade
Index (in %) Commitment and Mitigation
(in %) Siting Policy
Apple Inc. 83 4 5 5 A A A A B A
Facebook Inc. 67 7 15 9 A A A A B A
Google LLC 56 14 15 10 B A A A A A
Hewlett-Packard 50 17 27 5 D B C B C C
Salesforce 43 12 16 15 B A C B B B
Microsoft Corporation 32 23 31 10 B B C B B B
IBM 29 29 27 15 C B C C F C
Alibaba Group 24 3 67 3 F F C F D D
Baidu Inc. 24 3 67 3 F F D F F F
Tencent Holdings Ltd. 24 3 67 3 F F D F F F

2024.
Adobe Inc. 23 37 23 11 B A B B A B
Amazon.com Inc. 17 24 30 26 F D C C B C
Samsung Group 11 19 29 31 C D C D C D
Oracle Corporation 8 26 36 25 D D F D F D
Naver Corporation 2 19 39 31 B B B D D C

Source: Greenpeace, Clicking Clean: Who Is Winning the Race to Build a Green Internet? (Washington, DC: Greenpeace, January 2017), accessed January 5, 2020,
www.clickclean.org/downloads/ClickClean2016%20HiRes.pdf.

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EXHIBIT 5: THE CARBON FOOTPRINTS OF THE WORLD’S THREE LARGEST DATA CENTRES

Google Cloud, Microsoft Azure, and Amazon Web Services (AWS) were the world’s largest cloud-
computing service providers. All three had a high carbon footprint level. In response to protests from
employees and non-governmental organizations, they had implemented processes and techniques to
reduce their carbon footprints. The extent of their efforts and achievements varied substantially.

Google Cloud

Achievements: Since 2017, Google Cloud had been powering its data centres entirely from renewable
energy sources. However, part of this energy commitment was met by purchasing renewable energy
certificates. Google Inc. was the world’s largest corporate buyer of renewable energy.

Measures adopted to reduce its carbon footprint:

 Google Inc. procured green energy for its operations through power-purchase agreements with utility
companies across the world. In September 2019, it increased its renewable energy portfolio by 40 per
cent through such agreements and received access to green energy from utility companies in return
for investments in renewable energy projects.
 Google Inc. used machine-learning models to continuously optimize its use of electricity and maintain
an appropriate temperature in its data centres.

Microsoft Azure

Achievements: Since 2014, Microsoft Corporation had been powering its cloud servers entirely on
renewable energy sources. However, part of this energy commitment was met by purchasing renewable
energy certificates. Otherwise, Microsoft Corporation’s cloud servers used 60 per cent renewable energy.

Measures adopted to reduce its carbon footprint:

 Microsoft Corporation imposed internal carbon taxes, which encouraged its data centres, including
Azure, to minimize their carbon footprint.
 It also invested in clean power projects through power-purchase agreements. In early 2019, Microsoft
Corporation increased its renewable energy portfolio by 60 per cent.
 With the objective of improving energy efficiency, it invested in research on setting up data centres on
the ocean floor and using fuel cells, among others.
 Similar to Google Inc., Microsoft Corporation used machine-learning models to optimize energy
consumption at its data centres.

AWS

Achievements: In 2018, Amazon.com Inc. used only 50 per cent renewable energy across the company,
which included renewable energy certificates. Some of its data centres were powered by only 12 per cent
renewable energy. The lack of transparency made it difficult to accurately estimate AWS’s carbon footprint.

Measures adopted to reduce its carbon footprint:

 Similar to Google Inc. and Microsoft Corporation, Amazon.com Inc. had also entered into several
power-purchase agreements to procure energy from renewable sources.

Source: Daniel Oberhaus, “Amazon, Google, Microsoft: Here’s Who Has the Greenest Cloud,” Wired, December 18, 2019,
accessed July 9, 2020, www.wired.com/story/amazon-google-microsoft-green-clouds-and-hyperscale-data-centers.

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EXHIBIT 6: DONATIONS TO POLITICAL PARTIES: AMAZON VERSUS GREENPEACE (IN US$)

In the United States, corporations, labour unions, and other interest groups were prohibited from donating to political
parties and electoral candidates. However, corporate managers and shareholders, and members of trade unions and
other interest groups could donate through political action committees (PACs), which could donate directly to political
parties and candidates, and to so-called super political action committees, which could support or promote their
preferred candidates and parties indirectly.

Amazon.com Inc. funded both US political parties—Democrats and Republicans. More funding was donated to the
Democrats, reflecting the preference of employees, although shareholders preferred a more balanced funding
approach, as indicated in the table below:

Amazon Greenpeace
Election Total Individuals PACs Election Total Dem (%) Rep (%)
Cycle (Employees) Cycle
Dem (%) Rep (%) Dem (%) Rep (%)
2012 543,261 83.57 16.43 51.81 48.19 2012 34,497 100 0
2014 510,449 72.52 27.48 51.05 48.95 2014 0 0 0
2016 1,803,089 87.58 12.42 48.72 51.28 2016 10,959 100 0
2018 13,626,791 90.35 9.65 49.15 51.85 2018 20,661 100 0

Commenting on Amazon.com Inc.’s political donations, Karen Sebold, a professor at the University of Arkansas who
specializes in campaign financing, stated that “Amazon, like most corporations, is likely to give to both sides of the aisle
and attempt to curry favor with the majority party. . . . I am not surprised that Amazon is giving more in recent years to
the candidates that may determine their financial growth and longevity.”

All political donations by Greenpeace came from its employees and their family members. The organization did not
donate to political action committees. Its employees and their immediate family members donated only to Democrats.

Note: PACs = political action committees; Dem = Democrats; Rep = Republicans; an election cycle represented a two-year
period starting on January 1 of a particular year and ending on December 31 of the following year; for example, election cycle
2018 started on January 1, 2017, and ended on December 31, 2018.
Source: Prepared by the case author with information from “Amazon.com,” Open Secrets, accessed February 23, 2020,
www.opensecrets.org/orgs/totals.php?id=D000023883&cycle=2018; Andrew Keshner, “One Political Party Is Getting More
Love from Amazon Workers than Ever Before,” Market Watch, October 20, 2018, accessed February 23, 2020,
www.marketwatch.com/story/one-political-party-is-getting-more-love-from-amazon-workers-than-ever-before-2018-10-18;
and “Greenpeace,” Open Secrets, accessed August 27, 2020, www.opensecrets.org/orgs/totals?id=D000051523

EXHIBIT 7: WHO OWNS AMAZON.COM INC.?

As of February 2018, Amazon.com Inc. had 484,607,953 outstanding shares. Of these, 16.37 per cent were
owned by the company’s chief executive officer, Jeff Bezos, who was also the largest shareholder. Total
equity holdings of insiders, including Bezos, was approximately 17 per cent.

More than 60 per cent of the company’s shares were owned by institutional investors, of which the top 15
accounted for 29 per cent of all shares. The top two major institutional shareholders were investment banks
The Vanguard Group and BlackRock Inc., which accounted for approximately 6 per cent and 5 per cent of
total outstanding shares, respectively.

The balance of the company’s shares was held by individual investors, including many of its employees.
Although Bezos was the major shareholder, the company’s shares were widely held, so no specific person
or institution could control decision-making for the company.
Source: Prepared by the case author with information from “Amazon.com, Inc.,” United States Securities and Exchange Commission,
accessed January 12, 2020, www.sec.gov/Archives/edgar/data/1018724/000119312518121077/d514607ddef14a.htm; “Who Owns
Amazon?,” Seattle City Council Insights, May 4, 2018, accessed January 12, 2020, https://sccinsight.com/2018/05/04/who-owns-
amazon.

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ENDNOTES
1
This case has been written on the basis of published sources only. Consequently, the interpretation and perspectives
presented in this case are not necessarily those of Amazon.com, Inc. or any of its employees.
2
Jay Greene, “Amazon Threatens to Fire Critics Who Are Outspoken on Its Environmental Policies,” Washington Post,
January 2, 2020, accessed September 23, 2020, www.washingtonpost.com/technology/2020/01/02/amazon-threatens-fire-
outspoken-employee-critics-its-environmental-policies.
3
Louise Matsakis, “Amazon Employees Will Walk Out over the Company’s Climate Change Inaction,” Wired, September 9,
2019, accessed January 25, 2020, www.wired.com/story/amazon-walkout-climate-change/.
4
Ibid.
5
Ibid; Gary Cook and Elizabeth Jardim, “Clicking Clean Virginia,” Greenpeace, February 13, 2019, accessed February 29,
2020, www.greenpeace.org/usa/wp-content/uploads/2019/02/Greenpeace-Click-Clean-Virginia-2019.pdf; Emma Newburger,
“Elizabeth Warren Reintroduces Legislation Requiring Corporations to Disclose Climate Risk Exposure,” CNBC, July 10,
2019, accessed March 1, 2020, www.cnbc.com/2019/07/10/warren-reintroduces-legislation-requiring-firms-to-disclose-
climate-risk.html.
6
Jeff Mason, “Trump, on Climate, Says He Won’t Jeopardize U.S. Wealth on ‘Dreams,’” Reuters, August 26, 2019, accessed
January 26, 2020, www.reuters.com/article/us-g7-summit-trump-climatechange/trump-on-climate-says-he-wont-jeopardize-u-
s-wealth-on-dreams-idUSKCN1VG1RU.
7
Emma Newburger, op cit.
8
Raz Godelnik, “Why Amazon Needs to Come Clean about Its Carbon Footprints,” Triple Pundit: Energy and Environment,
May 9, 2011, accessed February 27, 2020, www.triplepundit.com/story/2011/why-amazon-needs-come-clean-about-its-
carbon-footprint/77646.
9
Nina Angelovska, “Top 5 Online Retailers: ‘Electronics and Media’ Is the Star of E-commerce Worldwide,” Forbes, May 20,
2019, accessed February 27, 2020, www.forbes.com/sites/ninaangelovska/2019/05/20/top-5-online-retailers-electronics-and-
media-is-the-star-of-e-commerce-worldwide/#84d2cb41cd9f.
10
Scott Fulton III, “Amazon AWS: Complete Guide to the World’s Largest Provider of Cloud Services,” ZDNet, April 1, 2019,
accessed March 1, 2020, www.zdnet.com/article/amazon-aws-everything-you-should-know-about-the-largest-cloud-provider.
11
Lucy Handley, “Amazon Beats Apple and Google to Become the World’s Most Valuable Brand,” CNBC, June 11, 2019,
www.cnbc.com/2019/06/11/amazon-beats-apple-and-google-to-become-the-worlds-most-valuable-brand.html.
12
Terri Cullen, “Amazon Plans to Spend $700 Million to Retrain a Third of Its US Workforce in New Skills,” CNBC, July 11,
2019, accessed February 27, 2020, www.cnbc.com/2019/07/11/amazon-plans-to-spend-700-million-to-retrain-a-third-of-its-
workforce-in-new-skills-wsj.html.
13
Christopher McFadden, “A Brief History of Amazon: The Everything Store,” Interesting Engineering, November 2, 2019,
accessed January 12, 2020, https://interestingengineering.com/a-very-brief-history-of-amazon-the-everything-store.
14
Ibid.
15
Pauline Meyer, “Amazon.com Inc.’s Organizational Structure Characteristics (An Analysis),” Panmore Institute, February
16, 2019, accessed March 1, 2019, http://panmore.com/amazon-com-inc-organizational-structure-characteristics-analysis.
16
“Amazon’s vs. Alibaba’s Business Models: An Overview,” Investopedia, May 8, 2019, accessed February 2019,
www.investopedia.com/articles/investing/061215/difference-between-amazon-and-alibabas-business-models.asp.
17
Nick Statt (2019), “Amazon is Spending Billions on Shipping as it Makes Prime One-day Delivery a reality,” The Verge,
accessed September 28, 2020, www.theverge.com/2019/10/24/20931055/amazon-prime-one-day-delivery-shipping-q3-
2019-earnings-spending.
18
AWS, accessed September 29, 2020, https://aws.amazon.com/pricing/.
19
Megan Graham, “Amazon Is Turning Advertising into Its Next Huge Business—Here’s How,” CNBC, July 17, 2019, accessed
March 1, 2020, www.cnbc.com/2019/07/17/how-amazon-advertising-works.html.
20
“Amazon’s vs. Alibaba’s Business Models: An Overview,” op cit.
21
Ibid
22
Amazon, 2018 Annual Report, accessed February 9, 2020,
https://s2.q4cdn.com/299287126/files/doc_financials/annual/2018-Annual-Report.pdf.
23
Ibid.
24
Ibid.
25
“What Is the Deal with Amazon Logistics?,” Seller Labs, July 26, 2019, accessed February 16, 2020,
www.sellerlabs.com/blog/whats-the-deal-with-amazon-logistics.
26
Amazon.com Inc., “Amazon Prime Air,” accessed January 12, 2020, www.amazon.com/Amazon-Prime-
Air/b?ie=UTF8&node=8037720011.
27
Michael Levin and Joshua Lowitz, “Amazon Exceeds 100 Million US Prime Members,” CIRP, January 17, 2019, accessed
January 17, 2020, https://files.constantcontact.com/150f9af2201/a37a79a7-0eff-4a38-b05a-ce3c459addc2.pdf.
28
Murat Uenlue, “Amazon Business Model, Amazon Web Services,” Innovation Tactics, November 6, 2018, accessed
February 10, 2020, www.innovationtactics.com/amazon-business-model-amazon-web-services.
29
“Amazon AWS,” Infoclutch, accessed February 10, 2020, www.infoclutch.com/installed-base/cloud-computing-
software/amazon-aws.
30
Tom Krazit, “State of the Cloud: Amazon Web Services Is Bigger than Its Other Four Major Competitors, Combined,”
GeekWire, August 3, 2018, accessed January 8, 2020, www.geekwire.com/2018/state-cloud-amazon-web-services-bigger-
four-major-competitors-combined.

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2024.
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31
Brian Merchant, “Amazon Is Aggressively Pursuing Big Oil as It Stalls Out on Clean Energy,” Gizmodo, April 8, 2019,
accessed February 29, 2020, https://gizmodo.com/amazon-is-aggressively-pursuing-big-oil-as-it-stalls-ou-1833875828.
32
Jordan Novet, “Amazon’s Cloud Business Reports 35% Growth in the Third Quarter, Trailing Estimates,” CNBC, October
24, 2019, accessed February 24, 2020 www.cnbc.com/2019/10/24/aws-earnings-q3-2019.html.
33
Megan Graham, op. cit.
34
Ibid.
35
Noah Higgins-Dunn. “Jeff Bezos Is Finally Ending Secrecy over Amazon’s Role in Carbon Emissions,” CNBC Business
News, March 8, 2019, accessed May 13, 2020, www.cnbc.com/2019/03/08/jeff-bezos-to-end-secrecy-over-amazons-role-in-
carbon-emissions.html.
36
Emily Atkin, “Breaking Up Amazon Won’t Solve Its Climate Problem,” The New Republic, April 26, 2019, accessed May 13,
2020, https://newrepublic.com/article/153660/breaking-amazon-wont-solve-climate-problem.
37
Merchant, op. cit.
38
Leon Kaye, “Amazon Resists Pressure to Participate in Carbon Footprint Disclosure Project,” Guardian, July 1, 2011,
accessed February 16, 2020, www.theguardian.com/sustainable-business/amazon-disclose-data-climate-carbon-footprint.
39
Irina Ivanova, “How Free One-Day Shipping Is Heating Up the Planet,” CBS News, May 24, 2019, accessed February 20,
2020, ww.cbsnews.com/news/amazon-prime-day-one-day-shipping-has-a-huge-carbon-footprint.
40
Gary Cook and Elizabeth Jardim, op. cit.
41
Ibid.
42
Ibid.
43
Ibid.
44
Ibid.
45
Gary Cook, Clicking Clean: Who Is Winning the Race to Build a Green Internet? (Washington DC: Greenpeace, January
2017), accessed January 5, 2020, www.clickclean.org/downloads/ClickClean2016%20HiRes.pdf.
46
Cassady Craighill, “Amazon Breaking Commitment to Power Cloud with 100% Renewable Energy,” Greenpeace, February
2019, accessed January 16, 2020, www.greenpeace.org/usa/news/greenpeace-finds-amazon-breaking-commitment-to-
power-cloud-with-100-renewable-energy.
47
Merchant, op. cit.
48
Ibid.
49
Ibid.
50
Matt O’Brien, “Employees Activism Isn’t Stopping Big Tech’s Pursuit of Big Oil,” USA Today, October 2, 2019, accessed
July 6, 2020, www.usatoday.com/story/tech/2019/10/02/microsoft-amazon-google-oil-gas-partnerships/3839379002.
51
Tim Donaghy, Caroline Henderson, and Elizabeth Jardim, “Oil in the Cloud,” Greenpeace, accessed July 5, 2020,
www.greenpeace.org/usa/reports/oil-in-the-cloud/.
52
Tom Krazit, “State of the Cloud: Amazon Web Services Is Bigger Than Its Other Four Major Competitors, Combined,”
GeekWire, August 3, 2018, accessed January 8, 2020, www.geekwire.com/2018/state-cloud-amazon-web-services-bigger-
four-major-competitors-combined.
53
Alex Hern, “Amazon Accused of Abandoning 100% Renewable Energy Goal,” Guardian, April 9, 2020, accessed July 6,
2020, www.theguardian.com/technology/2019/apr/09/amazon-accused-of-abandoning-100-per-cent-renewable-energy-goal.
54
Higgins-Dunn, op. cit.
55
Ibid.
56
Cook, op. cit.
57
Merchant, op. cit.
58
Sugandha Lahoti, “4520+ Amazon Employees Sign an Open Letter Asking for a ‘Company-Wide Plan That Matches the
Scale and Urgency of Climate Crisis,’” Packt, April 11, 2019, accessed January 16, 2020, https://hub.packtpub.com/4520-
amazon-employees-sign-an-open-letter-asking-for-a-company-wide-plan-that-matches-the-scale-and-urgency-of-climate-
crisis.
59
Ibid.
60
Alex Hern, “Amazon Accused of Abandoning 100% Renewable Energy Goal,” Guardian, April 9, 2019, accessed August
27, 2020, www.theguardian.com/technology/2019/apr/09/amazon-accused-of-abandoning-100-per-cent-renewable-energy-
goal.
61
Cook and Jardim, op. cit.
62
Merchant, op. cit.
63
Ibid.
64
Ibid.
65
Amazon Employees for Climate Justice, “Amazon Is Funding Premier Climate Denial Think Tank,” Medium, July 17, 2019,
accessed February 16, 2020, https://medium.com/@amazonemployeesclimatejustice/amazon-is-funding-premier-climate-
denial-think-tank-8f657b5c9922.
66
Ibid.
67
“What Is the Paris Agreement?,” United Nations, accessed February 16, 2020, https://unfccc.int/process-and-meetings/the-
paris-agreement/what-is-the-paris-agreement
68
“What’s Your Climate Plan Amazon?,” 350 Seattle, accessed February 9, 2020, https://actionnetwork.org/petitions/amazon-
adopt-the-workers-shareholder-resolution-asking-for-a-climate-plan.
69
“Ask Amazon to Come Clean on Climate Change!,” 350 Seattle, accessed January 10, 2020, https://350seattle.org/amazon.
70
Ibid.

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71
Amazon Employees for Climate Justice, “Open Letter to Jeff Bezos and the Amazon Board of Directors,” Medium, April 10,
2019, accessed January 21, 2020, https://medium.com/@amazonemployeesclimatejustice/public-letter-to-jeff-bezos-and-the-
amazon-board-of-directors-82a8405f5e38.
72
Ibid.
73
Ibid.
74
Ibid
75
“Ask Amazon to Come Clean on Climate Change!,” op. cit.
76
Todd Bishop, “Amazon Shareholder Proposals on Climate and Facial Recognition Won about 30 Percent of Vote,”
GeekWire, May 24, 2019, www.geekwire.com/2019/amazon-shareholders-proposals-climate-facial-recognition-won-30-
percent-vote.
77
United States Securities and Exchange Commission, Amazon.com Schedule 14A, accessed February 9, 2020,
www.sec.gov/Archives/edgar/data/1018724/000119312519102995/d667736ddef14a.htm.
78
Ibid.
79
Bishop, op. cit.
80
Ibid.
81
Jake Johnson, “Because ‘Everything Is on Fire,’ Nearly 1,000 Amazon Workers Pledge to Walk Out and Join Global Climate
Strike on September 20,” Common Dreams, September 9, 2019, accessed February 10, 2020,
www.commondreams.org/news/2019/09/09/because-everything-fire-nearly-1000-amazon-workers-pledge-walk-out-and-join-
global.
82
Marie C. Baca and Jay Greene, “Amazon, Google, Other Tech Employees Protest in Support of Climate Action,” Washington
Post, September 21, 2019, accessed March 1, 2020, www.washingtonpost.com/technology/2019/09/20/amazon-google-
other-tech-employees-protest-support-climate-action.
83
Nielsen, Sustainable Shoppers: Buy the Change They Wish to See in the World: A Strategy Guide by Nielsen, accessed
January 8, 2020, www.nielsen.com/wp-content/uploads/sites/3/2019/04/global-sustainable-shoppers-report-2018.pdf.
84
Nielsen, “Global Consumers Seek Companies That Care about Environmental Issues,” November, 9, 2018, accessed
January 1, 2020, www.nielsen.com/eu/en/insights/article/2018/global-consumers-seek-companies-that-care-about-
environmental-issues.
85
Dexter Galvin, “Why Online Retailers Are in Danger of Losing the ‘Retail Wars,’” CDP, November 27, 2018, accessed
January 26, 2020, www.cdp.net/en/articles/companies/why-online-retailers-are-in-danger-of-losing-the-retail-wars.
86
“About the Science Based Targets Initiative,” Science Based Targets, accessed August 15, 2020,
https://sciencebasedtargets.org/about-the-science-based-targets-initiative.
87
Galvin, op. cit.

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