QSO328 Milestone 2

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Southern New Hampshire University *

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328

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Feb 20, 2024

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Zach Bowman 06/16/2023 QSO-328 7-2: Final Project

1. Overview A. Over the past 25 years Amazon has grown to be one of the largest and most profitable businesses in the world. It is crucial that a company of this caliber be a leader in the efforts of sustainability. There are so many companies that strive to copy every move that Amazon makes, so if they can spin that into a urge to become more sustainable then that is what they should do. Amazon has pledged many revolutionary sustainability efforts that they hope to achieve over the next 20 years. The company has made a climate pledge; this is Amazon’s commitment to be net-zero carbon by 2040. In addition, they strive to power all of their operations with 100% renewable energy by 2025. There are many more efforts being put into motion such as improving packaging to eliminate waste, reducing water usage in data centers, and switching to sustainable aviation fuel. Most importantly Amazon is committed to ensuring that partners around the world in their supply chain are treated with respect and dignity. B. At Amazon technology and research are advancing at a revolutionary rate. The company is at the forefront of making environmentally friendly changes that drive competing companies to keep up. In September of 2019 Amazon announced they would implement t he “Climate Pledge—a pact to meet the targets of the Paris Climate Accords ten years early by achieving net-zero carbon by 2040 .” (Forbes, 2021). They plan to achieve this goal with many groundbreaking pieces of technology such as electric cars, renewable energy in warehouses, and aiming to help customers reduce their impact on the

environment. Solar and wind power has been some of the many investments into renewable energy sources made by Amazon in the last few years. Implementing solar panels and wind turbines greatly decreases the environmental footprint made by the giant cooperation. The financial triple bottom line is impacted by these changes in such a positive way. The large investment into electric vehicles, renewable energy, and recycled packaging will pay off in many ways. The money saved through government rebate programs has saved Amazon millions over the last decade. Aside from the cost effectiveness, consumers want to get on board with a company who is longing to make an impact on the environment. The response from customers has been nearly all positive as well as stakeholders investing more into the changes the company is making. C. Amazon is one of the first companies to take into account not only the energy used in making/packaging products, but how much energy is used once the product reaches the customers home. Amazon states, “ On average, more than half of the total carbon footprint of Devices comes from when the devices are actually in use. And that's why we don’t just want to reduce our own impact on the environment, we want to help our customers do so as well.”(Amazon, 2020). Amazon builds strong supplier relationships by working closely alongside its suppliers to establish long-term partnerships. Amazon has what they call Amazon’s Supplier Central Platform. This gives its suppliers the ability to manage their inventory, sales, and information about certain products. Amazon is huge on receiving customer feedback and reviews on

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their products sold on the website. Getting this information helps with sustainability efforts by understanding what the consumer desires. This allows Amazon to improve their products, thus ensuring they distribute a quality product and avoid returns and recalls which waste product and fuel associated with transportation. If Amazon has reason to suspect certain products provided by suppliers does not meet their standards, they may request that the selling partners demonstrate the product it sells are manufactured in accordance with Amazon’s Supply Chain Standards. D. In reference to the social impact goals, Amazon tracks factors such as employee safety and diversity and inclusion. In Amazon warehouses they implement employee connection questions at the beginning of each shift to properly track safety metrics, employee satisfaction, and workplace inclusion. By receiving information directly from the employee, 100% anonymously, they can get a better gauge on how their efforts are paying off. Amazon tracks their carbon footprint by calculating their total green house gas emissions attributed to their direct and indirect operational activities. With this carbon footprint, Amazon measured their total impact on the climate, mapped the largest activities contributing to this impact, and used this information to develop meaningful reduction goals, including their overall goal to reach net zero carbon across Amazon by 2040 (Amazon, 2019). Amazon has world class scientists and researchers obtaining these metrics and genuinely striving to make their company socially and environmentally sustainable. II. Environmental and Social Sustainability Plan

A. When Amazon achieves the net-zero carbon output throughout their industry, it will be a legendary and ground breaking time in the world of manufacturing and transportation. Amazon has all of the researchers, technologies, and funds within their grasp to change the way our generation and generations to come view production and transportation of goods. With the plan to transport million of packages to consumers each year without producing and emissions would have a major positive impact to our environment and the air that we breathe. Some would argue that electric vehicles can and will have their own impacts on our environment. To combat the energy consumption going all electric would take, Amazon will also switch to only renewable energy sources. This includes the investment of millions of dollars into wind turbines, hydropower/hydroelectricity, and solar power. These types of renewable energy sources take a mass amount of land to hold these energy generating machines. To combat this as well Amazon has announced their plan to practice reforestation efforts across the world. B. It is no secret that many of the products that are sold on the Amazon website come from suppliers that are located overseas. The many modes of transportation that land that product throughout the world are airplanes, cargo ships, and semi-trailer trucks. Though Amazon may be striving to produce no emissions in their warehouses and transporting product to customers, their suppliers may not be on the same page. “In 2021, Amazon helped launch coZEV with the Aspen Institute. Through coZEV, Amazon is supporting initiatives to increase the availability of zero-emission technologies and fuel

while gaining support from shipping lines, cargo owners, ports, and other organizations that can enable energy transition.” (Amazon, 2020). Partnering with suppliers to become more eco-friendly and do their best to align their practices with that of Amazon is a way to become one of the most revolutionary companies in the industry. When focusing on social sustainability it is important to partner only with suppliers that follow ethical business practices. It is easy for a company to find the cheapest product, while turning a blind eye to how they run their operation. Amazon could implement a team that focuses on performing audits on it’s suppliers and distributors, in order to maintain that level of excellence they demand throughout their company. C. Amazon’s partnership with coZEV is a major development in the hopes to achieve a more environmentally sustainable way of transpiration. CoZEV had an incredibly successful launch in October of 2021. With their success they have begun to demonstrate that there is a need for change and seeking more investment and cooperation is a must. Amazon and coZEV has announced plans to build and launch new transoceanic dual fuel container ships capable of using zero-emission fuels by the end of this decade. In my research I have deduced that one giant container ship produces as much air pollution as fifty- million cars. There are approximately fifty to sixty-thousand cargo ships in the world as of 2023. Amazon partnering with coZEV could take a large percentage of these cargo ships and convert them into zero-carbon producing

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ships. The results could be the equivalent to taking the pollution of billions of cars out of the air we breathe. D. Amazon is one of the few companies that takes into account how much energy is used by their products once they reach the hands of the consumer. It is one thing to switch to renewable energy sources during the production and supplying of products, but if the products being sold are using astronomical amounts of energy in the possession of its customers then the vision is hindered. Not only does Amazon take into account the product, but also what and how it is shipped to the customer. Amazon gives the consumer the option to have their packaged delivered in a “no rush” method which limits the amount of stops that the product will have to make before reaching the customer’s doorstep. They reward customer for choosing this option, typically with an Amazon Digital credit .Amazon has launched a program titled Climate Pledge Friendly Shopping. Essentially what this will implement is a way for customer’s to easily shop and discover more sustainable products. Not only are these products that they are directed towards climate pledge friendly, but also companies that practice ethical business practices with their employees. E. It is essential for companies to “hold the hand” of its customers and make it easier to find products that are sustainable. Many consumers either do not know or will not go looking for products that are climate pledge friendly. When the company makes it easier for them to find than many more of these products will be sold. Taking the steps that Amazon has should be the industry standard when displaying these types of products for customers. As of 2023

Amazon has shipped over 370,000,000 Climate Pledge Friendly units to Amazon customers throughout the world (Amazon,2020). Amazon has stated that 38% of their customer based has at some point picked to have their packages delivered using the “no rush” shipping method, essentially limiting the number of stops a package has to make. This in turn streamlines the shipment of products to the customers and limits the amount of emissions produced in the transportation process. F. Amazon is keen on keeping track of their 2040 pledge to be net-carbon zero. As of 2021 they have reached 85% renewable energy across all of Amazon’s businesses. They are also the number one corporate purchaser of renewable energy in the world. This is a competition inducing statistic that many companies try and follow, which is incredible for our environment. Since the year 2015, Amazon has achieved a 38% reduction in per-shipment packaging weight. This statistic is easily attained by taking an average amount of packaging material used in the past years and comparing it what they are using as of now. One of Amazon’s greatest feats is they have delivered 100,000,000 plus packages to their customers’ using zero-emission vehicles. This is huge due to the fact that they have pledged to have all vehicles in their fleet produce zero carbon in the next decade. III. Implications for Financial Sustainability

A. Rewriting the way a business is operated, and implementing new innovative technologies is a costly venture. In order to achieve XYZ’s goal of reducing net-carbon zero by fifty percent in the next 20 years, it will require them to begin investing into applying these technologies over time. In order to cover these costs XYZ can apply for many grants offered by the government for assisting the world in achieving better air quality. Another way is to receive private funding from companies seeking to invest into the company’s transition. In contrast to the investment required, XYZ can expect their efforts to pay off in the long run. As well as achieving reduce emissions and carbon footprint, they will have a source of renewable energy that will drastically save money. B. Emerging technologies and best practices for environmental and social sustainability can have both positive and negative effects on a company’s financial performance. Best practices and emerging technologies frequently concentrate on increasing resource efficiency, lowering waste, and streamlining processes. By putting these strategies into place, XYZ manufacturing can cut expenses by using less energy, less raw materials, and running leaner operations. Implementing waste reduction programs or introducing energy-efficient technologies can result in significant long-term cost savings. Top talent loves working for firms that share their values, and sustainable businesses frequently recruit and keep this talent. Companies that promote social and environmental sustainability are more likely to have engaged and loyal employees. Higher productivity, decreased turnover rates, and cost savings from hiring and training staff are possible outcomes of this. Finally, Environmental, social, and governance (ESG) considerations are becoming more and more important to investors when making investment decisions. Sustainable investment funds and socially conscious investors may

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be interested in companies that promote sustainability and exhibit good ESG performance. This may result in better financial stability, greater access to finance, and cheaper borrowing rates for XYZ Manufacturing Company. IV. Integration A. XYZ Manufacturing should take sustainability into account when making decisions at all organizational levels and across a range of departments. This integration makes it possible for financial decisions to take into account the effects on society and the environment, and vice versa. For instance, XYZ Manufacturing may weigh the financial viability of an investment opportunity combined with any potential social and environmental advantages or dangers. To better understand stakeholders’ concerns and expectations regarding sustainability, XYZ Manufacturing should regularly communicate with them, including staff members, clients, suppliers, and communities. XYZ can satisfy many of the demands and interests of its stakeholders and connect financial, social, and environmental goals by incorporating stakeholder input into its plans and strategies. B. It is important to encourage partnerships and collaborations with stakeholders to address difficult sustainability concerns. XYZ Manufacturing should utilize pooled knowledge and resources by cooperating with colleagues in the industry, NGOs, academia, and communities. Innovative solutions can be found and the triple bottom line can be improved through collaborative efforts. XYZ manufacturing should also foster a culture of innovation and continual improvement across the board for the triple bottom line. They should encourager staff members to come up with concepts and solutions that favor positive outcomes in terms of the financial, social, and environmental spheres.

XYZ Manufacturing should accept cutting-edge innovations in business models, best practices, and emerging technology that promote peace and conflict resolution. C. The company Amazon has achieved many feats that seem out of reach for the company XYZ Manufacturing, however with the proper management, funding, and values we can reach our goals that align similarly with that of Amazon in the next twenty years. First thing first, XYZ manufacturing should establish a sustainability commitment and vision plan. They will need to establish a clear sustainability vision and values that are consistent with the goals of the business and the expectations of stakeholders. Also they should make a formal commitment to apply sustainability into the business strategy, operations, and decision-making process. Another milestone XYZ Manufacturing should achieve is making a thorough analysis of the business’s present environmental, social, and financial performance. This should include identifying strengths, weaknesses, and areas that could use improvement across the entire board of the company. It is crucial to keep in mind that reaching Amazon’s level of sustainability will take time and will call for constant effort and advancement. Based on the company’s size, sector, and particular sustainability difficulties, milestones may change. To stay on track and advance toward sustainability goals, tactics must be regularly evaluated, measured and adjusted.

Resources: US About Amazon. (2020, September 21). Our planet . US About Amazon. Retrieved May 7, 2023, from https://www.aboutamazon.com/planet Grant, D. B., Trautrims, A., & Wong, C. Y. (2022). Sustainable Logistics and Supply Chain Management (3rd ed.). Kogan Page. Thurbon, Rob. (2023, May 9). Amazon is Offering Prime Members $10 To Pick Up a Delivery Instead of Having Delivered. Techspot. http://www.techspot.com/news/98620- amazon-offering-prime-members-10-pick-up-delivery.html

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QSO328 Milestone 2

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