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
Even while Jeff Bezos has stepped away from day-to-day operations at Amazon, his lessons still echo in the halls there. One of those business mantras is also a guidepost for Amazon’s effort to achieve net-zero carbon emissions by 2040.
“Jeff Bezos has — what’s become across Amazon and more broadly quoted — an expression that I think is really quite beautiful,” said Amazon’s Daniel Gross 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, who’s a director at the company’s climate investing arm, the Climate Pledge Fund at Amazon.
“By making the Climate Pledge, by putting ‘Climate Pledge’ up in major lights across Seattle, by setting aside $2 billion for a Climate Pledge Fund — those are the kinds of mechanisms that will keep us on track for delivering on that pledge,” Gross said.
In 2019, Amazon made its own voluntary commitment to decarbonize by 2040, a decade ahead of the Paris Climate Accord deadline. The ecommerce giant also invited other companies to pledge their own climate goals and to become a member in the organization, which Amazon launched with Christiana Figueres and Tom Rivett-Carnac, the architects of the landmark 2015 Paris Agreement.
In 2020, Amazon announced it had bought the naming rights to a mid-sized indoor arena 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 own Instagram at the same time.
Climate Pledge Arena rendering
Source: Amazon
“We went out, we bought the naming rights to the major hockey stadium and concert arena in Seattle. And we didn’t name it the Amazon Arena. We called it the Climate Pledge Arena. You drive down downtown Seattle, and you see Climate Pledge in enormous letters,” Gross said.
“In some ways, it’s like we created a mechanism where it would be just so impossible to put the toothpaste back in the tube without humiliating ourselves that we are sticking to that pledge,” Gross said.
Another mechanism Amazon has set up is the Climate Pledge Fund, which is directing $2 billion to inves into climate startups that are solving the problems Amazon itself has faced.
“We shouldn’t just sit idly by on the sidelines, waiting for other people to develop the technologies and the business models that can help decarbonize our operations, right? Otherwise, we might be waiting until 2040 before someone has a hydrogen-powered airplane or something like that, that works for our operations,” Gross told CNBC.
“Instead, what we should be doing is putting money at work, and more significantly, doing everything that we possibly can to invest in companies with our time with our energy with our commitments to purchase from them,” said Gross.
Investments Amazon makes into climate tech solutions have to both be viable according to conventional venture capital standards, but they also have to solve a problem for Amazon.
“We may see a fantastic company that’s solving a carbon problem. But if it’s not an Amazon carbon problem, there’s nothing that we can really do to help that company. And so we limit ourselves to those companies where there’s a technology we can adopt,” Gross told CNBC.
The startup also has to seem to have a pathway to profitability.
“We are not a philanthropic organization. We’re absolutely in it for profit,” Gross said. That said, if it looks like Amazon’s purchasing power will enable the startup to achieve profitability, that’s also an option.
One of the best known examples of this kind of partnership is with the electric automaker Rivian, in which Amazon owns a stake. “We made a purchase commitment for 100,000 electric delivery vans, and not surprisingly, we chose to invest in the company pre IPO.”