Amazon’s a great company. But good? Nope.

amazon-logoLike millions of people, I like to shop at Amazon. But the more I learn about the company, the less I like it.

Amazon’s  performance on environmental and social issues has been truly dismal, as a I wrote in a story posted today on Guardian Sustainable Business. Here’s how the story begins:

Jeff Immelt, the chief executive of General Electric and one of American’s most influential business leaders, likes to say that “if you want to be a great company today, you also have to be a good company.”

Another celebrated chief executive named Jeff — Jeff Bezos, Amazon’s founder and CEO– is putting that proposition to the test.

Amazon is, in many ways, a great company. But good? Nope.

Amazon doesn’t publish a sustainability report, probably because it would have little to say. It doesn’t respond to the Carbon Disclosure Project. (More than 80% of big companies do.) It’s ranked very low by Climate Counts, which rates companies on their efforts to mitigate climate change. Amazon’s  data centers get low marks from Greenpeace.

Nor does Amazon do well on social and political issues. Until Bezos agreed to install electricity last year, warehouse workers literally toiled in sweatshops where the temperatures could top 90 degrees. The company has fiercely fought efforts by states to collect sales taxes, using bullying tactics at times. If you believe the Seattle Times, and I do, the company gives less to charities than other Seattle companies and “cuts an astoundingly low profile in the civic life of its hometown.” For more, read the rest of the Guardian story.

Here’s one more small, but revealing, example of Amazon’s cavalier attitude towards environmental issues: Check out, if you have a moment, the page on its website about electronics recycling. Unlike, say, Best Buy, Amazon does not take back electronic waste. Instead, it refers people to other websites, including Earth911. And what does Earth 911 say about electronics recycling? Among other things, it advises customers to take their old electronics back to Best Buy, Staples and Circuit City–which went bankrupt in 2009!

There is, of course, another good reason not to shop at Amazon, as I was reminded when I read The Bookstore Strikes Back, a terrific story in The Atlantic by the author Ann Patchett about the independent bookstore she opened earlier this year in her hometown of Nashville. People shop at Parnassus Books, she writes, because

they have learned through this journey we’ve all been on that the lowest price does not always represent the best value. Parnassus Books creates jobs in our community and contributes to the tax base. We’ve made a place where children can learn and play, where they can think those two things are one and the same. We have a piano. We have two part-time store dogs. We have authors who come and read; you can ask them questions, and they will sign your book. The business model may be antiquated, but it’s the one I like, and so far it’s the one that’s working.

520px-Jeff_Bezos'_iconic_laugh

Jeff Bezos

All that said, Amazon has done a world of good in the last 15 years for authors and readers, as well as producers and consumers of many of the things it sells. People who don’t live near retail stores have access to the company’s enormous inventory. Writers like me have access to millions of readers. (I published my own ebook, Suck It Up: How capturing carbon from the air can help solve the climate crisis, as a Kindle Single.) Like Walmart, Amazon is super-efficient and able to offer low prices. It’s a growing business that employs more than 50,000 people, which is no small thing, and it has made its shareholders a lot of money. Bezos, No. 11 on Forbes list of America’s wealthiest people, is said to be worth $23 billion, and he has begun to give some of that money away.

Still…when it comes to corporate responsibility, at least as conventionally defined, Amazon’s nowhere. Its retail competitors–Walmart and Best Buy–do much better. So do other other big tech companies like Microsoft, Google and even Apple.

I emailed and called Amazon a few days ago to ask for an interview, and only heard back from Craig Berman, a company spokesman, after I’d filed my story to the Guardian. He referred me to a page on Amazon’s website — Amazon’s Innovations for Our Planet — that’s mostly about packaging and energy efficiency (and was last updated in 2011). Small potatoes. He also said, interestingly, that responding to the Carbon Disclosure Project survey is “something we are considering.”

Amazon’s competitive advantages may be so formidable that the company need not worry about its carbon footprint or philanthropy. [Read my friend Adam Lashinsky’s FORTUNE cover story about Bezos for more insight.] But I think a day of reckoning is ahead. As the company continues to grow, pressures on Amazon to do more good (or at least do no evil) will grow, too. It happened to Apple. Amazon’s next.

Comments

  1. People shop at Parnassus Books, she writes, because they have learned through this journey we’ve all been on that the lowest price does not always represent the best value.

    This reminds me of people complaining about how cheap and crappy flying by airplane has supposedly gotten, when the cheap ones are the only ones making any money (and the expensive but luxurious ones are on the verge of bankruptcy). The truth is that for all the talk about how people love their local bookstores, price seems to trump everything – otherwise the Big Chains would not have snuffed out most of the small bookstores, and Amazon/Wal-Mart the big chains and most remaining small bookstores.

  2. Parnassus books offers a choice in its market. If the additional services and the ambiance it provides are of sufficient value to customers, it will succeed in competition with the other choices in the market; if not, it will fail. Time will tell.

    Amazon has a very successful business model. Obviously, it does not satisfy the green activists, who have the choice not to deal with Amazon. If the lost business of the green activists becomes important to Amazon, it will do the things it needs to do to satisfy those customers, assuming that they are capable of being satisfied.

    Amazon collects and pays sales tax where required by law. I can’t imagine any reason why it would be anxious to compound the problem by collecting sales taxes for the myriad taxing districts in which its customers live. (A company located in my home state, with both on-line and “bricks and mortar” presence in the state, took years to deal with the fact that the ZipCode in which I live is spread over three counties with different county tax rates.) Sales taxing entities make their tax structures complicated; and, then, expect online retailers to bear the cost of collecting their taxes and the responsibility to assure that they are collected correctly.

    The states and their manifold taxing entities have had the advantage of free sales tax collection for decades. The “brick and mortar” retailers did not volunteer to become tax collectors; the states made those decisions. Similarly, utilities did not volunteer to become tax collectors. I cannot imagine why on-line retailers would choose to do so.

  3. I really did not want to know that. Being a conscious consumer is so hard it’s exhausting at times. Which, in my opinion, is why so few people truly are conscious consumers.

    That’s a business plan I would very much like to see succeed: finding a way to make it easy to be a conscious consumer. But is there a market for it that’s large enough to make it profitable?

    I’t a chicken and egg problem.

  4. Hi Marc, I sell a lot of used books on Amazon to raise money for Shining HOpe for Communities, so I am grateful for that opportunity. On the other hand, I donate all the books that aren’t worth enough to sell to http://www.betterworldbooks.com which has a really interesting model but is not at all transparent. Do you know much about them? They say they donate all kinds of money, expertise, and books to literacy projects but do not disclose numbers, so far as I have seen.

  5. Unlike, say, Best Buy, Amazon does not take back electronic waste.

    It seems far more sensible for a local brick-and-mortar store to accept electronic waste than for some online entity that may not have a presence anywhere nearby. I’m not sure that this particular point is one I’d count against Amazon (although as you also mentioned their info on electronics recycling does seem rather dated).

    On the GreenPeace side of things, a lot of their numbers are rather questionable, though some of this may be due to a lack of transparency. e.g. Apple’s response to the report saying that Google overestimated power demand ~5-fold in their new iCloud data -centre, some unwarranted assumptions about power sourcing in places like Oregon (it’s renewable powered not coal as GreenPeace assumed).

  6. Jeff Bezos may just surprise you. I agree with Jeff Immelt: “If you want to be a great company today, you also have to be a good company.” But I don’t agree with your “not so good.” Not at all.

    Amazon is a big company. Jeff Bezos is not responsible for every detail. And I don’t blame him or the company for not complying with the distraction of endless reporting and documentation. It doesn’t mean there’s something to hide. His focus spells success.

    And why is he obligated to donate competitively? How does the Seattle Times or anyone know what he does donate? Some philanthropists actually give because they want to, not to have their name in lights. And whose to define that philanthropy? This man has made a huge difference in the world.

    I think if there’s one person on the planet who may actually save it, it’s Jeff Bezos. He reminds me of Charles Wallace in the classic A Wrinkle In Time. He has a knowing, and even though he can rattle off data that is clearly genius…he’s an instrument in finding the key of what is missing: Love.

    Such a vision is hardly what I’d call “small potatoes.”

    All that is real is seen with the heart® Vivian Greene

    • Vivian,

      I would suggest that we are viewing the establishment of a new “religion”, with its own belief system, its modern day prophets, its unique commandments and even its own dietary laws. The requirements to be a “good” member of this religion are still evolving, under the careful guidance of NGOs and advocacy organizations. This new “religion” apparently requires the wearing of “sackcloth” in public for certain offenses, though I would guess that “ashes” have been eliminated for environmental reasons. There appears to be precious little tolerance for “infidels”. I suspect that, in our current, highly evolved society, “burning at the stake” and “drawing and quartering” will be eschewed, though “stoning” still appears to be acceptable.

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