Dive Brief:

• Amazon announced a Climate Pledge Fund on Tuesday with an initial $2 billion slated for investment in sustainable technologies and services.
• The new venture investment program, welcomed by clean energy developers, is intended to support the company's transition to net zero carbon emissions by 2040. Amazon will consider companies from around the world at various stages of maturity across multiple industries, from food and agriculture to energy generation.
• The announcement lacked details regarding the focus of the investment, which made environmental nonprofit Green America skeptical regarding the company's climate goals. Amazon's total carbon footprint increased 15% in 2019 compared to 2018, according to the company's latest sustainability report released Tuesday.

Dive Insight:

The large investment announced by Amazon is the latest venture capital initiative from corporations to help stimulate clean energy. The trend comes as stakeholders value the importance of venture capital and public funding to advance technologies.

The increase of green venture capital "brings down the cost of capital for companies that are raising money," Blake Jones, co-founder of Namaste Solar, told Utility Dive. "We want more capital flowing into the space, and it makes more sense for capital to flow into this space than it does into oil and gas and coal, right now," based on the cheaper prices of wind and solar.

Jones also serves on the board of directors for Clean Energy Federal Credit Union, which helps with debt financing for clean energy projects.

"I think there's a broader concern about what companies seeking investors will be able to find them during the COVID crisis right now. I'd say the COVID crisis casts a shadow on all fundraising efforts right now, but I don't have any particular concerns about clean energy," Jones said.

"The unifying theme around each investment is its potential to lower Amazon’s and other companies’ carbon emissions and increase overall sustainability," the company said.

In 2013, Patagonia, a U.S. based retail company, launched a $20 million fund for clean energy investments. Amazon, however, did not specify that the $2 billion fund will focus only on clean energy, which Todd Larsen, executive co-director of Green America, says creates a lot of unknowns regarding its impact.

"It's very hard to trust Amazon because they're not a transparent corporation and it's unclear what, who is going to benefit from this and whether it would actually be truly an environmentally sound approach," Larsen told Utility Dive.

For instance, Larsen said, Amazon does not participate in the Carbon Disclosure Project, disclosing its own carbon emissions instead of reporting its footprint by CDP's standards, which enables benchmarking across other competitors. Amazon said it's using a third-party, APEX, to verify its greenhouse gas emissions. 

In 2019, Amazon's operations led to the equivalent of carbon dioxide emissions from 13 coal burning power plants running for a year.

"Like many companies in high-growth mode, we look at the absolute tons of carbon in our footprint, but also at how we are improving our carbon intensity," Amazon's sustainability report said. "Our first year-over-year comparison shows progress as we continue to make investments," adding that the price per grams of carbon dioxide went down 5% in 2019 compared to 2018.

The company is working to reduce its carbon pollution, but its first year-over-year comparison shows its direct emissions from fossil fuels increased 18% in 2019. Existing investments include the order of 100,000 electric delivery vehicles, expected to hit the road in 2021.