Private sector investment and innovation are crucial for driving meaningful environmental progress. Amazon has long been a leader in sustainability, co-founding the Climate Pledge in 2019 and committing to achieve net-zero emissions by 2040. The company also developed the Sustainability Exchange, a platform designed to share Amazon’s strategies and insights to decarbonize its operations, helping other companies with their decarbonization efforts. With the recent launch of its new carbon credit service, Amazon is reinforcing its climate leadership by offering its suppliers, business customers, and Climate Pledge signatories access to scientifically verified carbon credits. 

Since the 1990s, voluntary carbon markets (VCMs) have slowly made headway as an emissions reduction solution. VCMs are decentralized platforms where individuals and companies can buy and sell carbon credits, representing the removal or reduction of greenhouse gas emissions. These credits come from nature-based projects like reforestation or regenerative farming and carbon removal technologies like direct air capture (DAC). Amazon’s new carbon credit service will offer credits in three priority areas: reducing deforestation, restoring forests, and advancing technological carbon removal. 

The Intergovernmental Panel on Climate Change (IPCC) has stressed that meeting climate targets is impossible without embracing nature-based solutions and carbon removal technologies. Given this urgency, one would expect VCMs to be flourishing. However, that hasn’t been the case. Challenges like fraud and low credibility have held back their widespread adoption.

“The voluntary carbon market has been challenged with issues of transparency, credibility, and the availability of high-quality carbon credits, which has led to skepticism about nature and technological carbon removal as an effective tool to combat climate change,” said Kara Hurst, chief sustainability officer at Amazon. With its carbon credit service, Amazon aims to restore trust in the market while giving qualified companies in its value chain the opportunity to reduce their carbon footprint.

Amazon is ensuring the credibility of its carbon credits by following top industry standards and supporting the development of new ones where needed. It uses the ART TREES independent standard to verify reductions in deforestation emissions and follows the ABACUS label for its reforestation projects, which far exceeds other standards for reforestation. Independent verifiers ensure the legitimacy of the credits created through carbon removal technologies, and Amazon is actively working with carbon standards bodies to develop high evaluation standards.

Companies have already expressed increased confidence in the voluntary carbon market through Amazon’s carbon credit service. Chief people officer Kristine Rohls of the business technology consulting company Slalom notes, “Sourcing high-quality credits is a must for us, and with a trusted partner like Amazon by our side, we’re excited and confident that our move into the voluntary carbon market will truly make a difference where it matters most.” Ben MacAskill, COO of the online photography platform Flickr, mentioned that while they previously invested in low-quality credits, they now feel assured about their future investments. “Amazon’s expertise and scientific rigor means our team can meet our climate goals with confidence,” said MacAskill.

To tap into this new market, Amazon requires companies to have net-zero emissions by 2050 targets, covering both direct and indirect emissions from purchased electricity and other sources. Companies must also measure and publicly report their GHG emissions while committing to further decarbonization strategies based on the latest climate science. 

Greater transparency and more legitimate monitoring, verification, and reporting processes will increase the creation and access to high-quality carbon credits. As a positive step for voluntary carbon markets, Amazon’s leadership demonstrates the power of private sector innovation in driving climate action without government regulation, mandates, and subsidies. By ensuring transparency and credibility, Amazon is helping to build trust in the carbon market and setting an example for other companies to follow in sustainability. 

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.