20 May 2022

Amazon has a plastic waste problem. A big plastic waste problem, one only made worse during the pandemic when Amazon became the de facto online service of first resort for goods and gifts.

In 2020, Amazon's packaging waste amounted to 599,000,000 pounds of plastic packaging waste. Oceana estimated 10,700 of this ended up in the seas, exacerbating the ocean plastic problem.

But Oceana's analysis faces a problem - Amazon's transparency around their waste. As attention expands and pressure builds, shareholders are set to vote on a resolution demanding Amazon create a report detailing "...how the company could reduce its plastic packaging use and contribute not plastic pollution." Amazon pushed back on Oceana, arguing it overestimated packaging waste by 300% - so, at most, only 200,000,000 pounds of plastic packaging waste. Only.

A resolution was already put forward in 2021, which only 35% of shareholders supported. Now Oceana is pushing for a new vote.

But lets assume it passes. What might come next?

First, a report. A broad external publication on the scope of plastic waste and amazon's contribution to the plastic waste problem. A push supported by equally broad demands for ESG transparency and compliance to responsible investment approaches and environmental disclosure demands. But the issue of comprehensive data transparency will still remain, leading to a larger demand: what would a global transparency accounting for Amazon's plastic packaging waste look like and require?

Second, relative to Amazon's existing broad pushes into packaging innovation, what else would this report incentivise? Theres the concern over how consumers will use Amazon or look to alternative vendors, then theres the improvement of Amazon's internal "zero additional" packaging initiatives, or a push for Amazon to invest even further into novel materials or alternative delivery models. For instance, in their partnership with P&G for the "tide eco-box." We might expect greater public attention and scrutiny on Amazon's existing and proposed portfolio of circular and low waste options. This in turn will likely incentivise a new generation of marketing and entrepreneurial focus on the micro gaps in Amazons portfolio of investments. With greater public scrutiny likewise comes the other side of regulatory and tax attention, with efforts to align tax incentives to SDG compliance and regulatory pushes on single use coming into the global fold.

But most likely, the report would detail a broad acceptance of a failure in packaging waste management both from Amazon and the global system.

Lets assume further that more expansive reform is requested in the next voting round. All of which begin with clarity over the state of the problem: exactly how much impact does Amazon have directly and indirectly on plastic waste? Directly through the use and distribution of plastic packaging; indirectly through the distribution of items and waste from the purchases themselves and the sellers/manufacturers producing the purchased items.

But lets assume this reform extends to improved reporting, improved solutions, better partnership models to addressing existing problems, better investment into plastic waste mitigation, etc.Existing circular startups can either expect to reduce their competitive advantage relative to Amazons position and scope, or find ways to partner. The diversity of distribution and logistics models within circularity remains a key bottleneck for local circularity transitions and building robust ecosystems of small business actors that can both facilitate circularity and do so without adding larger environmental costs in transportation and packaging.

The robustness of the circular ecosystem relies on the ability for large and small players to coordinate on both recirculating items (whether the products or the durable/single packaging by which products are distributed) and end of life. A lack of clarity on what to do with Amazon packaging will retain the same issues with the larger recycling movement. So overall, the quality of the ecosystem depends on how much production and waste can be avoided to begin with; to be direct, how to make certain kinds of packaging sectors redundant.

Amazon has an opportunity to lead the global circular market by acting as a driver of local circular ecosystem robustness. An opportunity which demands greater transparency and clarity about what is needed in innovation across materials, across collection, refurbishment, recycling, and on.

But ultimately this pushes on a fundamental point that's becoming increasingly critical within the global circular debate. There is no accelerated circular transition without a comparable change to how data and digital infrastructure are built and managed. Platforms help expose preferences and data on user demands: who has what, who will give what to whom - with Ebay, Airbnb, and Uber performing key asset optimisation functions, which helps push on key features for material use and circularity.

But the organisation of key data for local distribution and logistic systems, for material identification and end of life - this is a major revolution needed - and Amazon is a part of it, whether as accelerator or obstacle - but now shareholders need to decide which part of it Amazon will be.

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