The influence of Amazon and Jeff Bezos’ $10 billion philanthropic foundation on the carbon credit market is raising alarm as a battle intensifies between big tech companies and business groups over how to meet tough climate targets.
The Bezos Earth Fund is one of the largest donors to the Science Based Targets initiative, a world-renowned organization that groups like Apple and H&M have turned to to set voluntary standards and strict limits on the use of carbon credits to offset emissions.
Separately, Amazon is expanding its own voluntary pledge initiative, signed by more than 500 companies including Uber, IBM and Microsoft, which could be an alternative way to meet climate goals and has no restrictions on the use of carbon credits.
The SBTi is also in the process of rethinking its offsetting efforts, a decision that could be crucial for big tech companies at a time when artificial intelligence is driving a surge in emissions from the growing use of data centers.
Experts and activists have grown concerned that Amazon and the Bezos Foundation (whose chairman and vice-chairs are Bezos and his fiancee, Lauren Sanchez) could influence the SBTi, which has influence over whether a large group of companies can achieve a credible “net-zero” label.
A person close to Amazon said the company is a “completely separate” entity from the Bezos Fund and “operates independently of each other.”
But a former SBTi staff member filed a complaint with the UK Charity Commission in July, raising concerns about the influence of the Bezos Foundation, which also funds organisations that employ three of the SBTi members. board member.
The Charity Commission last week planned to advise SBTi, a UK-registered charity, on how to improve its governance, including on conflicts of interest, according to documents seen by the Financial Times.
The Bezos Earth Fund said it “looks forward to reading the UK Charity Commission’s findings.” SBTi said it has “clear governance processes in place, including conflict of interest statements, and will continue to take proactive steps to improve these mechanisms.”
Grantmakers with current or past ties to large corporations, such as Bloomberg Philanthropies, the IKEA Foundation, and the Rockefeller Foundation, are the financial backbone of climate standard-setting and campaigning. Google and its philanthropic arm also give money to groups in this space.
But the fight over the SBTi’s future could be crucial to companies’ efforts to meet their climate goals. Some companies are frustrated that the SBTi limits the use of credits to just 10% of emissions. Over the past year, Amazon and Microsoft were among hundreds of companies that were removed from the group’s list of ambitious commitments to reach “net zero.”
The Bezos Foundation is also a backer of the Greenhouse Gas Protocol, the gold standard-setting organization for carbon accounting, which is also in the midst of reconsidering its offsetting efforts.
A job listing posted earlier this week by the Climate and Nature Finance Cooperative, co-founded by the Bezos Foundation, called for staff to build a strategy “to support voluntary carbon markets,” which are currently worth about $1 billion.
Amazon is also seen promoting alternatives to the SBTi standard. Companies that sign its “Climate Pledge” must commit to reaching “net zero” by 2040, in line with the goals of the 2015 Paris Climate Agreement, but can choose exactly how much they reduce their own emissions or buy offsets. Amazon also helped create Abacus last year, a market label that tests the quality of carbon credits.
“Through our climate pledge, we are moving forward on our path to net-zero emissions and will continue to invest in and innovate climate solutions to benefit our customers, partners, and the planet,” Amazon said.
“If big polluters like the Amazon want to get to net zero as cheaply as possible, they will have an incentive to create the conditions in which offsets are seen as credible,” said Holger Hofmann-Riem, a member of the SBTI’s technical advisory group and a consultant to the Swiss non-profit Go for Impact.
“And if Bezos gives significant funding to the climate standards area, Amazon may be in a position to influence decisions there.”
Buying credits is typically much cheaper than reducing supply chain emissions, making it an option for some CEOs under pressure to meet climate pledges to shareholders.
A carbon credit represents one tonne of CO₂ removed or saved when, for example, a tree is saved or coal is replaced by renewable energy, but the benefit is difficult to quantify. Energy credits are intended to represent new renewable energy and are used in a similar way to offset emissions.
SBTi officials expressed concern that a “hydra” of carbon and energy credit lobbyists would emerge at climate policy meetings, and a person close to the Bezos Fund countered the criticism: “They can’t stand the fact that they no longer have carte blanche to set the rules. … Welcome to the mature world of standard setting.”
Amazon is the only company that has funded SBTI’s core operations, but is no longer a funder; Lafarge, ArcelorMittal, Danone and IKEA are funding specific projects.
In one intervention two and a half years ago, the fund’s chief executive, Andrew Steer, asked SBTi’s board and management to meet with a group of large publicly traded U.S. companies, including Amazon, Netflix, General Motors and Johnson Controls.
According to the 2022 email, seen by the Financial Times and first reported by Die Zeit, Steer expressed companies’ frustration with the SBTi’s “lack of flexibility,” particularly rules that restrict the use of carbon credits.
Stier wrote that meetings with SBTi management and the board “showing this kind of respect” would go a long way and could thwart calls for the creation of an alternative standard-setting body. He noted the “significant cash infusion” the Bezos Foundation has made to support standard-setting bodies.
The SBTi said its engagement with companies around the world had been “entirely appropriate”.
Two years later, in March, the Bezos Fund supported relaxing the SBTi’s rules on carbon credits at a meeting it convened, the Financial Times previously reported. A person close to the fund said the credits were not on the agenda and that the fund did not recommend their use at the meeting.
Shortly after, SBTi’s board announced it would allow large-scale use of carbon credits, but was later forced to reverse the move after it sparked employee discontent. CEO Luis Amaral resigned in July, citing “personal reasons.” Amaral had joined SBTi in 2022 after working under Steer at another climate change group.
“Everything we do at the Bezos Earth Fund is done solely for the public good,” the fund said, and Steer’s email “simply demonstrates that we care about communicating important information to our grantees to help them succeed.”
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