Amazon.com (AMZN) - Get Report announced Tuesday that it was kicking off a $2 billion investment fund focused on “sustainable and decarbonizing technologies” in an effort to offset its carbon footprint.
Named the Climate Pledge Fund, the fund’s mandate will be to back industries and technologies focused on reducing greenhouse gas emissions that are considered the key culprit behind climate change.
It will be managed by Amazon’s internal sustainability team with help from the company’s corporate development group, Amazon, the online retailing and technology giant said in a statement.
The move comes as companies publicly pivot toward environmental causes that have become front-and-center amid the coronavirus pandemic, which has cast a light on just how much modern-day human activity impacts the planet.
For Amazon in particular, it comes amid criticism of its carbon footprint from moving goods from manufacturers to warehouses to homes and businesses globally. Amazon said it plans to make bets in a broad range of industries ranging from transportation and manufacturing to energy generation and agriculture.
Amazon also announced on Tuesday plans to accelerate efforts to power its operations with renewable energy sources - moving forward a self-imposed deadline by five years to 2025. The company retained its original commitment to be carbon neutral by 2040.
Amazon CEO Jeff Bezos in February pledged to commit $10 billion of his own money, or about 7.7% of his net worth, to combating climate change.
His moved followed a separate announcement from Microsoft (MSFT) - Get Report in January of its own $1 billion climate fund, which will invest in technology to remove or reduce carbon from the earth’s atmosphere - part of an effort to erase the company’s cumulative impact on the environment since it was founded in 1975.
Shares of Amazon were up 2.09% at $2,770.43 in trading on Tuesday.
To be sure, while focusing on the environment remains a positive, some ESG-focused experts feel it would be equally beneficial for the likes of Amazon and others to be shepherding capital toward social and supply chain issues as well.
“We need to be sure that carbon-only conversations are again not overshadowing many other labor and supply chain issues that investors, consumers and Amazon should be looking at," said Bonnie Lyn de Bartok, CEO of ESG data analytics firm S-Factor. "It would be nice to see some investment capital being allocated to addressing social and human rights issues as well.”