Inside Amazon’s Forward-Thinking Carbon Credits Strategy

Amazon is integrating carbon credits into its sustainability strategy, using them to offset emissions in specific areas of its operations, including buildings and land use.

As businesses face growing pressure to reduce their carbon footprint, carbon credits have become a widely-debated solution.

Some argue they allow large companies to avoid making meaningful emissions cuts, while others see them as a necessary tool in the transition to net zero.

Amazon, alongside Google and Microsoft, is investing heavily in these schemes, stating that its approach prioritises “high-impact, innovative initiatives that generate high-quality carbon credits". 

Amazon’s strategy for carbon credits

Amazon focuses on three key areas for its carbon credit investments: preventing deforestation in tropical forests, restoring degraded land and advancing technological carbon removal methods.

The company believes that, as more businesses take responsibility for their emissions, the supply of high-quality carbon credits will shift towards removal-based solutions.

The role of carbon credits is to direct private sector funding to climate projects that might otherwise lack financial support.

Amazon also takes steps to prevent its carbon credits from being “double claimed,” which occurs when more than one organisation claims credit for the same carbon reduction.

Rather than relying solely on industry standards, Amazon employs a “first principles approach” to assess the effectiveness of its credits. This involves working with independent experts to monitor and verify the legitimacy of its carbon removals.

Carbon credits in Amazon’s supply chain

Amazon already applies carbon credits to specific parts of its carbon footprint, notably in its buildings. Some of its facilities have secured Zero Carbon Certification from the International Living Future Institute by using verified carbon credits.

However, the company stresses that it is not using credits as a substitute for emission reductions. Instead, it is applying them in areas where it has already made significant decarbonisation efforts.

Amazon states: “Our priority is to reduce carbon emissions across our operations by implementing real business changes.”

This suggests that its logistics and supply chain networks may also see further investments in cleaner technologies and operational efficiencies to complement its credit strategy.

Protecting forests

Deforestation and land-use changes contribute up to 20% of global carbon emissions each year.

To address this, Amazon co-founded the LEAF Coalition, a public-private initiative that has mobilised more than US$1bn to protect tropical forests and support local communities.

LEAF, which stands for Lowering Emissions by Accelerating Forest finance, helps preserve forests while promoting sustainable land use.

Amazon is also developing new approaches to agroforestry and restoration through the Agroforestry and Restoration Accelerator. This initiative supports small-scale farmers by testing business models, landholder engagement strategies and restoration techniques.

Kara Hurst, Amazon’s Chief Sustainability Officer, says: “Many of these projects will also help local communities generate new sources of income, all while improving natural habitats and promoting biodiversity.”

Alongside nature-based solutions, Amazon is investing in innovative carbon removal technologies through its Climate Pledge Fund.

The company made its first investments in Direct Air Capture (DAC) technology in 2023, seeing it as a way to permanently remove carbon dioxide from the atmosphere. One of its investments went to CarbonCapture Inc, a company specialising in modular DAC systems.

By combining forest preservation, land restoration and cutting-edge carbon removal technology, Amazon is positioning itself at the forefront of corporate climate action.

Whether carbon credits will remain a credible solution in the long term is still up for debate, but Amazon’s approach suggests it sees them as one piece of a much larger strategy.

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