How Amazon Uses Data to Decarbonise Its Value Chain
<p>Amazon's carbon footprint extends far beyond its warehouses and offices. Approximately 76% of the company's total emissions sit in its value chain, among suppliers, logistics providers, manufacturers and freight networks. For a business of this scale, decarbonisation depends on understanding where emissions occur and using that information to make operational decisions.</p><p>The company's strategy centres on emissions measurement, renewable energy, vehicle electrification, fuel switching and supplier engagement. However, Amazon's 2024 sustainability reporting also reveals a persistent challenge: efficiency improvements and renewable electricity purchases do not always translate into falling absolute emissions.</p><p>This case matters beyond Amazon itself. The company's approach demonstrates how large businesses are beginning to use value-chain data as a management tool. It also shows the limits of relying on intensity metrics when total emissions continue to rise.</p><h2>The Climate Pledge and the 2040 net zero commitment</h2><p>In 2019, Amazon co-founded The Climate Pledge, committing to reach net zero carbon emissions across global operations by 2040. That target sits ten years ahead of the Paris Agreement's 2050 timeline. Signatories agree to measure and report emissions regularly, implement reduction measures and use credible offsets for residual emissions.</p><p>By the end of 2024, 549 organisations had signed the pledge. The initiative has grown into a reporting framework that encourages companies to standardise their emissions data and share decarbonisation methods across sectors. Michelle Jolly, Amazon's Director of Sustainability Solutions and Services, has described the work as a collective effort to understand emissions and identify credible reduction routes.</p><p>The emphasis reflects a structural problem for many large organisations. Emissions are often concentrated outside direct operational control, embedded in purchased goods, outsourced services, construction projects and third-party logistics. Consequently, any meaningful reduction strategy must extend beyond corporate facilities.</p><h2>How Amazon categorises its decarbonisation efforts</h2><p>Amazon's 2024 Sustainability Report identifies four broad decarbonisation areas: improving operational efficiency, deploying lower-carbon alternatives, investing in carbon-free energy, and supporting suppliers and logistics partners in cutting emissions. Data connects these categories by revealing where operational changes can deliver the largest reductions.</p><p>Examples include optimising transport routes, increasing package fill rates, improving energy efficiency in cloud-computing chips, introducing lower-power device settings and installing efficiency measures in buildings. The company also tracks packaging volumes, delivery patterns and supplier activity to identify intervention points.</p><p>Nevertheless, the relationship between efficiency and total emissions remains complex. Amazon reported that carbon intensity fell by 4% in 2024 while the business grew by 11%. Despite this, absolute carbon emissions increased by 6% during the same period. The rise was attributed primarily to data-centre construction and fuel consumption by third-party delivery providers.</p><p>This distinction is important for UK SMEs tracking their own footprints. A reduction in emissions per unit of revenue or activity indicates improved efficiency. It does not necessarily mean that overall climate impact is declining. Both metrics need to be monitored together.</p><h2>Renewable electricity matching and its scope</h2><p>Amazon reported that renewable energy sources matched 100% of the electricity consumed across its global operations in 2024. The company achieved its original 2030 target five years early. This involved investment in more than 600 renewable energy projects, including 124 projects added in 2024. Together, those projects have the potential to generate enough electricity to power the equivalent of 8.3 million U.S. homes.</p><p>Renewable energy matching primarily addresses electricity-related emissions, often categorised as Scope 2 emissions under the <a href="https://www.gov.uk/government/collections/greenhouse-gas-reporting">Greenhouse Gas Protocol</a>. It does not eliminate emissions associated with construction, purchased goods, transportation fuels or other activities in the wider value chain. Amazon's own reporting shows that indirect emissions from these sources represented 74% of its total carbon footprint in 2024 and increased during the year.</p><p>For businesses evaluating similar strategies, this highlights a common issue. Electricity procurement is often the most visible part of a decarbonisation programme. However, emissions from purchased goods, services and logistics can be significantly larger and more difficult to address.</p><p>Amazon also reported that U.S. Prime members avoided an estimated 452 million delivery trips in 2024 through consolidated deliveries. The company estimates this helped avoid more than 494 million boxes and 335,000 metric tons of carbon dioxide equivalent emissions. These figures demonstrate how customer order data can influence logistics efficiency, packaging demand and associated emissions.</p><h2>Electric delivery vans and infrastructure expansion</h2><p>Amazon had more than 31,400 electric delivery vans deployed globally by the end of 2024, up from approximately 19,000 in 2023. More than 24,000 of the vehicles were supplied by Rivian. The vehicles delivered approximately 1.5 billion packages worldwide during 2024. Amazon has set a longer-term goal of deploying at least 100,000 electric delivery vans globally by 2030.</p><p>Infrastructure expansion has accompanied the fleet rollout. Amazon installed 11,770 additional electric vehicle chargers in 2024, bringing its reported total to approximately 23,000 chargers across 50 delivery stations. Fleet data can help Amazon decide where electric vans are technically and economically suitable by analysing route length, payload, delivery density, charging availability and vehicle utilisation.</p><p>However, electrification is more straightforward for last-mile delivery than for long-haul trucking, aviation and ocean freight. Commercially scalable low-carbon alternatives for these transport modes remain more difficult to deploy. For UK businesses managing logistics, this suggests that electrification strategies need to be tailored to specific transport types and route characteristics.</p><h2>Alternative fuels for freight and aviation</h2><p>While electrification develops, Amazon is also using alternative fuels. During 2024, Amazon used 4.7 million gallons of renewable diesel, compared with 286,300 gallons in 2023. It also procured 3.7 million gallons of blended sustainable aviation fuel and sourced biofuel services for more than 10% of its ocean cargo.</p><p>The company reported that 90% of imported transoceanic shipments moved by ocean freight in 2024, while 10% travelled by air. It also increased rail-load volume in Europe by 59% compared with 2023. These measures can reduce the emissions intensity of freight, but their climate benefits depend on factors such as fuel origin, production method, land-use impacts and lifecycle emissions.</p><p>Transparent reporting of fuel characteristics and lifecycle methodologies remains important. For UK businesses procuring alternative fuels, this means verifying claims and understanding the full emissions profile, not just accepting a renewable label at face value.</p><h2>Supplier engagement and decarbonisation plans</h2><p>Because most of Amazon's footprint sits outside its direct operations, supplier engagement is central to its strategy. Amazon has focused on its highest-emitting suppliers, representing approximately 70% of its supply chain emissions. The company encourages them to join The Climate Pledge and establish credible decarbonisation plans.</p><p>The 2024 Sustainability Report states that three suppliers, Crane Worldwide Logistics, Shorr Packaging and STS Group, joined The Climate Pledge during the year. This approach is intended to move emissions reduction from a voluntary corporate aspiration toward a more structured process involving suppliers, logistics companies and packaging providers.</p><p>Supplier data is difficult to standardise. Companies may use different emissions boundaries, estimation methods and reporting years. Therefore, Amazon's strategy depends not only on collecting more information, but also on improving the comparability, verification and quality of that information across its procurement network.</p><p>For UK SMEs, this reflects a broader trend. As large customers set decarbonisation targets, their suppliers face increasing pressure to measure and report emissions. Businesses that can provide credible, verified emissions data may gain a competitive advantage in procurement processes. Our <a href="https://sbs.eco/procurement/">sustainable procurement support</a> helps suppliers prepare for these requirements.</p><h2>Progress across Climate Pledge signatories</h2><p>The Climate Pledge provides a mechanism for comparing progress across participating companies. According to a later Climate Pledge analysis, 119 signatories representing approximately 90% of publicly reported signatory revenue reduced combined Scope 1 and Scope 2 emissions by an average of 11% between 2021 and 2024. The reduction amounted to approximately 14 million metric tons of carbon dioxide equivalent.</p><p>The analysis found that emissions from purchased electricity, heat, steam and cooling declined more rapidly than direct operational emissions. Renewable energy procurement was a major factor. It also reported that the median reduction among signatories was 21%, indicating that at least half of the companies in the sample achieved reductions at or above that level.</p><p>Those figures suggest that collective reporting and shared commitments can encourage progress, particularly in electricity procurement. They also reveal a limitation: Scope 1 and Scope 2 reductions are easier to measure than many Scope 3 emissions, such as purchased products, supplier manufacturing, construction and outsourced transportation.</p><p>This pattern is consistent with broader trends in corporate climate reporting. Direct emissions and purchased electricity are relatively straightforward to quantify and address. Value chain emissions require more complex data collection, engagement with third parties and coordinated action across organisational boundaries.</p><h2>What this approach reveals about value chain decarbonisation</h2><p>Amazon's use of data illustrates a broader shift in corporate climate strategy. Decarbonisation is no longer limited to installing renewable power at company facilities. It increasingly involves analysing the full chain of production, fulfilment, delivery and consumption. For UK businesses, this has practical implications.</p><p>First, emissions measurement needs to extend beyond direct operations. Most businesses will find that their largest emissions sources sit in their supply chains, purchased goods or outsourced logistics. Understanding these emissions requires engagement with suppliers and third-party service providers.</p><p>Second, intensity metrics and absolute emissions both matter. A company can become more efficient while its total emissions continue to rise. Both measures need to be tracked and reported. This is particularly relevant for businesses tendering for public sector contracts, where <a href="https://sbs.eco/net-zero-program/">PPN 06/21 compliance</a> requires credible carbon reduction plans.</p><p>Third, renewable electricity procurement addresses only part of the problem. While it can deliver significant Scope 2 reductions, it does not tackle emissions from construction, materials, transport fuels or supplier manufacturing. A comprehensive strategy must address all emission sources.</p><p>Fourth, supplier engagement is essential but difficult. Suppliers may lack the resources, systems or incentives to measure and report emissions. Standardising data collection, verifying information and coordinating reduction efforts across a procurement network requires sustained effort.</p><h2>Essential information for UK businesses</h2><ul><li>Amazon committed to reach net zero carbon emissions by 2040, ten years ahead of the Paris Agreement's 2050 timeline.</li><li>The Climate Pledge, co-founded by Amazon in 2019, had attracted 549 signatories by the end of 2024.</li><li>Amazon reported that renewable energy sources matched 100% of the electricity consumed across its global operations in 2024, five years ahead of its original 2030 target.</li><li>Approximately 76% of Amazon's carbon footprint sits in its supply chain, making supplier engagement central to its decarbonisation strategy.</li><li>Amazon deployed more than 31,400 electric delivery vans globally by the end of 2024, delivering approximately 1.5 billion packages during the year.</li><li>Amazon's carbon intensity fell by 4% in 2024, but absolute carbon emissions increased by 6% during the same period, primarily due to data-centre construction and third-party delivery fuel consumption.</li><li>Climate Pledge signatories reduced combined Scope 1 and Scope 2 emissions by an average of 11% between 2021 and 2024, with a median reduction of 21%.</li></ul><h2>What UK businesses should consider</h2><p>The most important test for any decarbonisation strategy is whether efficiency gains and renewable energy purchases can outpace emissions growth from expanding operations. Amazon's 2024 results show both progress and tension: renewable electricity matching, electric vehicle deployment and lower-carbon freight initiatives advanced, while absolute emissions still increased.</p><p>For UK SMEs, this highlights several practical considerations. If you supply larger businesses, expect increasing pressure to measure and report your emissions. Companies with credible decarbonisation plans may gain a competitive advantage in procurement processes. Conversely, businesses unable to provide verified emissions data may find themselves excluded from supply chains.</p><p>If you operate logistics or delivery services, consider how route optimisation, vehicle electrification and modal shift could reduce your emissions intensity. However, ensure that efficiency improvements translate into absolute reductions, not just lower emissions per delivery while total deliveries increase.</p><p>If you procure goods or services, start mapping your supply chain emissions. Identify your highest-emitting suppliers and engage them in reduction efforts. This will require standardised data collection, clear reporting frameworks and potentially financial or technical support for smaller suppliers.</p><p>For businesses subject to public sector procurement requirements, the <a href="https://sbs.eco/compliance/">carbon reduction plan</a> process requires both a baseline emissions measurement and a credible reduction trajectory. Understanding your value chain emissions is essential to developing a plan that meets these requirements.</p><p>The credibility of any decarbonisation strategy depends on continued disclosure of absolute emissions, clearer supplier-level data, independent verification and demonstrated reductions across Scope 3 categories. Data can identify the largest opportunities, but it does not itself decarbonise a value chain. The decisive factor will be whether the information leads to changes in procurement, infrastructure, transport modes, energy use and supplier performance at the scale required.</p><h2>Where to find further guidance</h2><p>The <a href="https://www.gov.uk/government/collections/greenhouse-gas-reporting">UK government's guidance on greenhouse gas reporting</a> provides detailed information on emissions measurement and reporting requirements for different business sizes and sectors.</p><p>The <a href="https://www.gov.uk/government/publications/uk-net-zero-strategy">UK Net Zero Strategy</a> sets out the government's approach to achieving net zero emissions by 2050 and includes sector-specific pathways and policy measures.</p><p>For businesses tendering for public sector contracts, the <a href="https://www.gov.uk/government/publications/procurement-policy-note-0621-taking-account-of-carbon-reduction-plans-in-the-procurement-of-major-government-contracts">Procurement Policy Note 06/21</a> explains carbon reduction plan requirements for suppliers bidding for contracts above £5 million per year.</p><p>The <a href="https://www.legislation.gov.uk/ukpga/2008/27/contents">Climate Change Act 2008</a> establishes the legal framework for the UK's carbon budgets and net zero target, providing context for corporate climate commitments.</p>
