Building a Carbon Allocation Methodology across Multiple Business Teams and Activities with Interdependencies

Abstract

To prevent the negative effects of climate change, companies around the world are setting and committing to net-zero carbon targets. Achieving this goal comes with operational challenges for companies, e.g., having a standardized method to hold internal business teams accountable for their carbon emission, and empowering individual teams to decarbonize. Especially for large companies with multiple business teams and functions that have interdependencies, allocation of carbon emissions coming from business activities and decisions is complex and not straightforward.

Amazon announced the Climate Pledge in 2019 and committed to achieving net-zero carbon emissions by 2040, by physically decarbonizing its business activities and offsetting residual emissions. Amazon’s supply chain is complex, which creates many interdependencies among internal business teams. These business teams often share responsibility over the emissions of single asset or decisions, both internally and externally. This project aims to develop a carbon allocation methodology to allow those business teams to understand their contribution to carbon emission, which will be a source of information for their incremental decarbonization strategies and cross-business collaboration to accelerate physical decarbonization. We will focus on transportation businesses within Amazon and create multiple use cases and allocation logics using available activity data, and then recommend a way to scale the logic to non-transportation businesses, such as buildings, devices, and servers.