The company ensures that every aspect of its operations contributes to sustainability
Following his participation in a key panel session ‘Driving climate solutions for a net zero future’ at the recently concluded Seamless Middle East 2024 (20 to 22 May) in Dubai, Prashant Saran, Director of Operations, Amazon MENA, spoke to Global Supply Chain on the company’s role in combating climate change and minimising environmental impact.
The expansive interview covered Amazon’s sustainable operations, collaborative efforts for global decarbonization, and the role of AI in building sustainable online retail businesses.
Global Supply Chain (GSC): Tell us about the importance of environmental sustainability to the online retail sector in MENA. How can online retail companies become more sustainable in their operations?
Prashant Saran (PS): Climate change requires immediate attention by all businesses and the online retail sector is no exception. The sector continues to expand, with research agency Mordor Intelligence forecasting the Middle East and Africa’s ecommerce market to grow at a compounded annual growth rate (CAGR) of 11.5% from 2023 to 2027.
We are also seeing an increasing environmental and social consciousness among customers. This is clear from an April 2024 report by YouGov, which revealed that over half (52%) of customers in the UAE and Saudi Arabia prefer buying from socially and environmentally responsible companies. At Amazon, we believe that taking action now is essential for the future of our businesses and communities.
In order to progress towards more sustainable businesses while catering to customers’ affinity for responsible brands, online retail companies need to operationalize sustainability goals within the organization. At Amazon, we’re passionate about ensuring that every aspect of our operations contributes to sustainability and minimizes environmental impacts.
Additionally, online retailers play an important role in encouraging sustainability across the value chain. We are working closely with our sellers, suppliers, and delivery partners in the region to reduce waste, optimize routes and integrate more sustainable practices into their own operations.
GSC: Can you tell us more about what Amazon does to reduce carbon emissions in your facilities?
PS: We are making strategic investments in people and technology to reduce carbon emissions in every aspect of our operations–from the time an item is picked off the shelf in a Fulfillment Centre, to the materials used to pack the item, and the transportation method that gets the parcel to the customer’s door.
Transitioning to carbon-free energy is one of the most impactful ways to lower carbon emissions. We install on-site rooftop or ground-mounted solar photovoltaic systems and battery storage on buildings across our operations.
As of the end of last year, Amazon has 500+ wind and solar projects globally, and we are proud to be the world’s largest corporate purchaser of renewable energy since 2020. In the MENA region, multiple sites have on-site solar rooftops while others are in the process of transitioning to renewable energy as a portion of the site’s energy mix.
We remain committed to sustainable practices as we expand our presence across the region. Within the past 12 months, we opened two new Fulfillment Centers in Riyadh and Dubai. The new facilities incorporate carbon-friendly design concepts, efficient control systems, data, and analytics to improve energy efficiency.
GSC: What is Amazon doing to reduce the environmental impact of its delivery fleet?
PS: We are committed to creating a delivery fleet that helps reach our global goal to be net-zero carbon across our operations by 2040. To achieve that, we are transforming our transportation network around the world by inventing new electrification solutions and using alternative delivery methods. In 2023, more than 150 million packages were delivered by electric vehicles to our customers’ doorsteps globally.
We currently operate thousands of electric vehicles worldwide and have invested in electric vehicle charging stations for our partners to use, with plans to expand this infrastructure. We work with partners such as Rivian in the US and Mahindra Electric in India to increase the electric vehicles in our fleet.
We are also piloting electric delivery vehicles in the Middle East. We continue to look at a variety of factors including route distance, size of the order, and infrastructure passing into and out of urban areas to determine the optimal way to deliver to a customer.
GSC: What is Amazon doing to improve sustainability in packaging?
PS: Our first priority is to eliminate additional Amazon packaging unless necessary. Since 2015, we have reduced the average weight of delivery packaging per shipment by 41% and avoided over 2 million tons of packaging material. Through Amazon’s ‘Ships in Product Packaging’ programme, eligible items are shipped in the original manufacturer’s packaging, resulting in waste reduction, lighter shipments, reduced delivery emissions per package, and less material to recycle.
In 2022, ‘Ships in Product Packaging’ accounted for 11% of packages globally. Customers in the MENA region might recognize this initiative since we’ve started shipping products in their original packaging without the Amazon added delivery packaging. When packaging is required, we optimize with lighter, rightsized packaging to reduce waste and carbon, while ensuring products arrive safely.
Amazon uses science-based systems to determine the type and size of packaging needed. Machine learning helps us determine which smaller products are suitable for flexible packaging, such as paper bags and cardboard envelopes, which are up to 90% lighter than similar-sized boxes.
GSC: How is Amazon leveraging technology to accelerate and scale sustainability solutions across its operations?
PS: Technology is embedded in every aspect of our operations, enabling us to use resources more efficiently and reduce waste. By leveraging AI and ML, we can optimize our energy efficiency and reduce waste across our operations.
For example, our Packaging Decision Engine is an AI model trained to analyze product shape, durability and customer feedback, and recommend the most efficient packaging options for millions of Amazon items. AI also helps us to detect damaged goods, with the goal of decreasing the number of damaged items that get sent to and returned by customers.
We leverage AI to help maximize efficiency on the roads, providing guidance to drivers on delivery routes to reduce delivery times. The tech model learns and gets smarter every day, allowing us to get better at delivering an item to a customer the first time. A successful first attempt means we don’t have to try again. It means happier customers, fewer vans, and fewer trips.
GSC: How do Amazon’s sustainability efforts align with the region’s decarbonization goals?
PS: Governments in the region are making huge efforts to accelerate decarbonization, enabling and encouraging private sector companies to follow suit. The UAE Net Zero 2050 strategic initiative, for example encourages all sectors to implement initiatives and projects to be net zero by 2050. In Saudi Arabia, the government’s Saudi Vision 2030 outlines a Net Zero future by 2060.
Thanks to our own goal of being net-zero carbon by 2040, we aim to support countries in the region to achieve their respective sustainability goals. We work with governments, partners, and technology innovators to support the region’s move towards renewable energy sources.
Last year, we brought together a diverse set of industry voices from delivery service providers to OEMs for an open discussion on the opportunities for electrification of fleets. The panel gave us invaluable insights into the shared intent and resolve within our industry today.
At Amazon, we believe that success and scale bring broad responsibility and we are scaling our efforts to support government sustainability agendas as we grow our business across the region.
GSC: How important are partnerships and collaborations in advancing sustainability efforts in the online retail sector?
PS: Solving the climate crisis is a shared responsibility and requires collective action between businesses, innovators, and governments. While we will leverage our size and scale to help drive progress forward, we cannot do this alone. In 2019, Amazon co-founded The Climate Pledge not just for our own benefit, but also for others who have ambitious, science-based goals and to send the demand signals.
The Climate Pledge is a commitment to become net-zero carbon across all our global operations by 2040, 10 years ahead of the Paris Agreement, and invites other like-minded organizations to join us on this journey. In the MENA region, several companies have also signed on to the pledge including Emirates Post Group, Majid Al Futtaim and The Sustainable City to name a few.
Many of the solutions required to achieve global decarbonization do not exist yet. Hence, collaborative efforts between businesses, organizations, and governments are essential to support policy discussions and investment that will promote innovation among startups and tech innovators.
The MENA region has a thriving innovation scene, with many entrepreneurs developing technologies that have the potential to revolutionize sustainability efforts. On our part, we will remain focused on leveraging our scale and assets to fight climate change, and work to accelerate innovation that can help others reach net-zero carbon.
