Amazon warns climate change could disrupt its business in annual filing

Amazon is warning investors that the climate crisis may have a material effect on its business.

In the risk factors section of its 2023 financial filing released Friday, Amazon added language that says climate change could cause its sales and operating results to fluctuate, making it harder to sustain growth or resulting in decreased revenue.

The update reflects the growing climate threats and the costs they pose to businesses. Amazon first included climate change among its risk factors in its 2021 annual report, but this year, it added expanded disclosures.

The company said climate change could lead to "increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact."

The United Nations last September warned of a "rapidly closing window of opportunity" to cut emissions caused by fossil fuels and ensure global warming stays below 2 degrees Celsius, the limit set by the 2015 Paris Accord. In January, the U.N. weather agency confirmed 2023 was the hottest year on record.

In addition to the humanitarian crises, economists have signaled extreme weather caused by climate change has led to supply chain disruptions and worker shortages.

Amazon has vast operations spanning more than 100 countries and regions, and employed 1.52 million people globally, as of Dec. 30.

The company has set out ambitious climate goals for itself, including a commitment to being carbon neutral by 2040. It also aims to power its business operations with renewable energy sources by 2025, and has amassed a portfolio of more than 500 wind and solar projects globally.

The company plans to reduce its reliance on gas-powered delivery vans by putting 100,000 electric Rivian vans on the road by 2030.

In 2020, Amazon bought the naming rights to a professional sports arena in downtown Seattle, and branded it Climate Pledge Arena.

Last July, Amazon lowered its carbon emissions for the first time since it began disclosing the figure four years ago.

The company has faced pressure from its corporate employees to address its environmental impact, including how its warehouse and logistics network contributes to air pollution in communities of color where some of its facilities are located.

Lawmakers have probed how Amazon manages its frontline workforce in extreme weather events, after a deadly warehouse collapse in 2021. Amazon workers have also called for more heat wave protections. The company has said it has heat-related safety protocols that often exceed federal guidance.

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