Tech giant Amazon now sells carbon credits to its corporate customers. While this offers companies a low-cost way to appear to be taking climate action, it does nothing to cut their real-world emissions.
Amazon, the US-based tech and retail giant, has launched its own carbon credit service to its suppliers, business customers, and Climate Pledge signatories.
While hugely disappointing, this move is hardly surprising. Given that voluntary standards, and cautious companies are increasingly abandoning carbon credits for offsetting purposes, as environmental NGOs have long called for, corporations wishing to engage in such problematic activities need to find alternative mechanisms for doing so.
Enter Amazon. Rather than encourage corporations to accelerate real and durable emissions cuts, the online behemoth decided to rebrand old carbon crediting practices and repackage them in a shiny new box.
Carbon credits are certificates representing emissions reductions, avoidance, or removals that claim but mostly fail to be equivalent to one tonne of carbon dioxide and/or other greenhouse gases.
Companies have used these credits to project an image of climate responsibility – often through misleading “carbon neutrality” claims that suggest emissions are erased simply by purchasing credits. However, the reality is clear: emissions are still being released, regardless of how many credits a company buys. Over the years, mounting scientific evidence has exposed the shortcomings of carbon credits, including their inability to boost emissions cuts and the violations of human rights often involved in carbon crediting projects.
Quiet backsliding
Amazon’s latest move confirms a worrying trend that has been unfolding behind closed doors in corporate and lobbying circles: the quiet rehabilitation of carbon credits as the silver lining solution for value chain decarbonisation. With carbon credit prices at record lows, this development is a financial boon for those with a vested financial interest in the market but deeply concerning for those advocating for genuine climate action through transition-specific measures taken by companies that re-think their role in the fight against climate catastrophe.
At the same time, Amazon has discreetly withdrawn its climate commitment under the Science-Based Targets initiative (SBTi), the leading standard for setting corporate climate targets aligned with 1.5°C and 2°C pathways. Instead, Amazon, alongside the consulting firm Global Optimism, has established its own climate alliance: the Climate Pledge (Not to be confused with the Climate Pledge Fund, which focuses on tech-driven sustainability investments).
The Climate Pledge positions itself as “a commitment to reach net-zero carbon emissions by 2040” through joint action, cross-sector collaboration, and responsible change. Signatories commit to measuring and reporting their greenhouse gas (GHG) emissions, implementing decarbonisation strategies, and offsetting remaining emissions with carbon credits. While this doesn’t sound too bad at first sight, the devil is in the details.
Cherry picking climate action
A closer look at the Climate Pledge’s requirements reveals a level of flexibility that undermines its credibility. Signatories must report their emissions annually, which is a positive step, but they retain the freedom to define their own emissions boundaries, effectively enabling them to set their own rules.
While the framework recommends following established guidelines that divide emissions into scope 1 (direct emissions), scope 2 (indirect emissions from purchased electricity), and scope 3 (indirect emissions from supply chains), it ultimately allows companies to pick and choose which emissions they count.
Further complicating matters, the full framework and its requirements is not available in the public domain (CMW could not find it), leaving the public and independent watchdogs in the dark about the specific rules.
In addition, it’s also not clear whether Amazon stands to profit from selling carbon credits to signatories to its Climate Pledge.
Moving the goalposts
This trend of moving the climate goalposts has been visible for some years now, but after a period of apparent improvement, the situation is again regressing. Back in 2022, the Corporate Climate Responsibility Monitor (CCRM), a joint analysis by NewClimate Institute and Carbon Market Watch, first exposed how leading companies were overstating their climate leadership.
Some set targets based on only a fraction of their actual emissions, while others made dubious carbon neutrality claims backed by offsets that covered as little as 1% of their total carbon footprint. This situation has not improved since then. Recent research revealed that companies are failing to disclose their most material emission sources.
Already in 2022, Amazon was investing in nature-based solutions through its Right Now Climate Fund. However, concerns lingered, and have only grown, over whether such programmes might later be used to justify emissions “neutralisation”. Amazon’s latest decision to sell carbon credits to other businesses seems like a strategic move to bring other companies on board its greenwashing bandwagon while continuing business as usual.
Amazon’s approach reflects a vision in which new frameworks and financial mechanisms take precedence over genuine in-house emissions reductions. But what we truly need are accountability systems that serve both companies and the public – ones that transparently, comprehensively and accurately map the impact of emissions and the action taken to address them, thereby allowing meaningful comparisons between corporations. What we don’t need is yet another framework, whether it’s the Climate Pledge or Emissions First Partnership, designed to fuel demand for carbon credits while real corporate climate action remains secondary.
Omission reductions
The time has come for companies to acknowledge the elephant in the room: the urgent need for deep emissions cuts and a genuine transition to a net-zero economy. High-quality carbon credits have a limited supporting role in climate action, but they must never be misused as a creative accounting shortcut to “cancel out” corporate pollution on paper but not in the real world. The future of corporate climate responsibility depends on real reductions.
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Note
Following the publication of this article, a representative from Amazon reached out to CMW to express their disagreement with the framing of the article and some of its content.
They contend that Amazon’s carbon credit exchange will include high-quality carbon credits which should complement in-house corporate decarbonisation. CMW notes that two of Amazon’s planned carbon credit categories – such as reforestation and technological carbon dioxide removal – may well be of higher quality than other credits on the voluntary carbon market, but that the third category, which is likely to provide the largest volume of carbon credits for the exchange, involves jurisdictional REDD+ (related to deforestation), with which we and other experts perceive quality problems (we note that REDD+ credits from “high forest cover, low deforestation” jurisdictions, which face a particularly high risk of over-crediting, appear to be excluded from the exchange). Regardless of the carbon credit quality, CMW does not find that Amazon has put in place strong enough conditions and guardrails to limit misleading use of carbon credits from its exchange by other companies (for example, towards value chain emission reduction targets). This is, indeed, the core message of our article.
Amazon has also indicated there are three eligibility criteria for those engaging in the carbon credit exchange, which go beyond the three commitments included in Amazon’s co-founded Climate Pledge (the pledge sets a headline for “net-zero carbon emissions by 2040”, with a potentially heavy reliance on offsetting for remaining emissions). CMW finds that these three additional criteria are too general to ensure that they are meaningful in their implementation. Companies qualifying for Amazon carbon credit purchases need to: “i) set a net-zero carbon emissions target for no later than 2050, covering Scope 1, 2, and 3 emissions; ii) measure and publicly report their carbon footprint on a regular basis; iii) commit to implementing decarbonisation strategies in line with the latest climate science”.
However, at the time of writing, the following information is not evident from the exchange or its accompanying FAQ: which specific categories of emissions within the Scopes must be disclosed and according to which standard (GHG-Protocol or others); the frequency of GHG reporting (“on a regular basis” is general); and which frameworks and standards will be permissible to determine whether a company has committed to implementing decarbonisation in line with climate science. Without further details or accompanying documents, it is difficult to know whether companies could comply with Amazon’s eligibility criteria while, for example, omitting the majority of their emissions by defining scope 3 disclosure on their own terms, or setting a 2050 target without clear methodological grounding and a roadmap with interim targets, or reporting emissions at regular but unnecessarily long intervals. These observations apply to the level of information available to us and others consulting Amazon’s carbon credit exchange webpage. We recommend that Amazon add the full details of the eligibility criteria, and any related documentation, requirements and/or nuances, to the carbon credit exchange webpage.
The Amazon representative further commented that the company will not use carbon credits to reach its own decarbonisation goals, such as its scope 3 targets (which we did not allege in the article) and points to language on the carbon credit exchange saying credits should complement a company’s decarbonisation. We note that our article did not focus on Amazon’s own decarbonisation strategy, but that this has been subject to analysis under the 2023 edition of the Corporate Climate Responsibility Monitor, with a fresh analysis pending in the 2025 edition of the CCRM.
On the point of complementing decarbonisation, we have already expressed reservations above on the lack of clarity regarding which frameworks and standards will be used as part of Amazon’s eligibility criteria to determine other companies’ decarbonisation alignment with the latest climate science. Moreover, given that Amazon has expressed its support for a climate contribution approach, it would have been more sensible for Amazon to formalise, in its eligibility criteria, a climate contribution approach without offsetting – thereby disallowing companies from misleadingly counting such credits towards their emissions targets. For the time being, that is not the case. CMW therefore perceives a real risk that companies buying carbon credits from Amazon’s exchange may resort to offsetting instead of taking up and accelerating meaningful in-house decarbonisation.
