Amazon is a company of superlatives. It‘s one of the largest employers in the United States with over 1.1 million workers. It‘s the most valuable brand in the world, worth $415.8 billion. And it‘s the undisputed king of e-commerce, controlling a staggering 49% of the U.S. online retail market (eMarketer, 2020).
By any measure, Amazon is an incredible success story-a small online bookseller that morphed into a sprawling empire that has fundamentally reshaped global commerce. But as Amazon‘s size and influence have mushroomed, so too has the scrutiny of its business practices and the question on the minds of many conscientious consumers: Is Amazon an ethical company?
As both a longtime Amazon customer and a business analyst who closely tracks the retail and tech industries, I‘ve watched the company‘s ascent with a mix of awe and unease. There‘s no denying the transformative innovations and efficiencies Amazon has unlocked. But there‘s also no escaping the trail of controversies that have dogged the company‘s rise. Let‘s unpack the key issues.
Worker Treatment: Fulfillment at What Cost?
The beating heart of Amazon‘s retail dominance is its vast network of warehouses, where an army of workers hustle to pick, pack and ship a never-ending torrent of orders with remarkable speed and precision. But numerous reports paint a troubling picture of the conditions these workers face.
Consider this eye-opening passage from a 2019 exposé by The Atlantic on Amazon‘s Staten Island warehouse:
"The scan gun I used to do my job was also my own personal digital manager. Every single thing I did was monitored and timed. After I completed a task, the scan gun not only immediately gave me a new one but also started counting down the seconds I had left to do it." (Mays, 2019)
A 2020 report by the Center for Investigative Reporting found that Amazon‘s serious injury rate was nearly double the industry average, with workers describing constant pressure to work faster at the expense of their health (Evans & Jeong, 2020). Injuries from overexertion, being hit by objects, falls and repetitive motion are commonplace.
Amazon vigorously disputes these accounts and points to its $11.5 billion investment in safety measures in 2020, including new technology and expanded training (Amazon, 2021). The company has also raised its average starting wage to over $18 per hour. But worker advocates argue these steps, while welcome, don‘t go far enough to address core issues like relentless pace, rigid disciplinary policies and invasive surveillance.
The bottom line: For all its logistical wizardry, Amazon has yet to crack the code on making its front-line fulfillment jobs ones that sustainably promote worker health and wellbeing. Until it does, its labor practices will remain under the ethical microscope.
Climate Concerns: A Monumental Footprint
Given the colossal scale of its operations, it‘s no surprise that Amazon has an oversized impact on the environment. The company estimates that its total carbon footprint in 2020 was 60.64 million metric tons-a 19% increase over 2019 (Amazon, 2020). To put that in perspective, that‘s roughly equivalent to the annual emissions of a small country like Ireland or New Zealand.
Much of Amazon‘s emissions come from shipping and packaging, with all those planes, trucks and boxes adding up quickly. Data centers that power Amazon Web Services are another major source, gobbling up huge amounts of energy. And of course, the sheer volume of stuff Amazon manufactures and sells takes a heavy toll on natural resources.
But to its credit, Amazon has made some bold commitments to clean up its act. The company co-founded The Climate Pledge in 2019, vowing to reach net zero carbon emissions by 2040-10 years ahead of the Paris Agreement. Here are some of the key initiatives underway:
| Initiative | Progress |
|---|---|
| Deploy 100,000 electric delivery vehicles by 2030 | 10,000 vehicles in 2022 |
| Invest $100 million in reforestation | 7 projects funded in U.S. and Canada |
| Move to 100% renewable energy by 2025 | 65% renewable in 2020 |
| Make 50% of shipments net zero carbon by 2030 | In development |
Source: Amazon Sustainability 2020 Report
These are laudable goals and serious investments. If achieved, they would make Amazon a true leader in corporate climate action. But the 2040 timeline still feels long given the urgency of the climate crisis and Amazon‘s unrivaled resources. And even with these commitments, Amazon‘s overall carbon emissions are still poised to keep growing in the short term as its sales surge.
An analysis by 451 Research found that among the largest cloud providers, Amazon Web Services is a laggard in using renewable energy, scoring just 12.2% compared to Google at 67.2% (451 Research, 2019). For a company that wants to be "Earth‘s most customer-centric company," there‘s ample room to accelerate its sustainability efforts to better serve our planet.
Monopoly Power: Bully or Innovator?
Perhaps the biggest existential question hanging over Amazon is whether its unrivaled size and influence are ultimately good for competition, economic dynamism and consumers. The company now controls nearly half of U.S. online spending. Its tentacles reach into an ever-expanding array of markets, from cloud computing to grocery to streaming to home security. This creeping dominance has raised alarm bells about Amazon‘s power to shape market outcomes in its favor.
Take Amazon‘s dual role as both a platform for third-party sellers and a seller of its own branded products. A Wall Street Journal investigation found that Amazon "uses the vast collection of data it gathers from other merchants to determine what products likely will be popular, and then often starts selling its own competing products" (Mattioli, 2020). In some cases, Amazon is alleged to have pressured popular brands to sell on its site at lowball prices, or else face a flood of Amazon-made copycats.
This dynamic puts small businesses in an impossible bind, forced to partner with the very behemoth that wants to ruthlessly undercut them. Many worry that as Amazon gains more control over the infrastructure of commerce-from shipping to advertising to payments-it will only gain more leverage to extract rents and limit choice.
Amazon counters that it remains a small player in global retail, with less than 1% share, and that its platform has enabled hundreds of thousands of small businesses to reach customers they never could have otherwise (Amazon, 2021). It also claims popular in-house brands like Amazon Basics represent a tiny fraction of its total sales.
From a customer perspective, there‘s no question Amazon has expanded choice and convenience tremendously, saving shoppers time and money. The company‘s relentless drive to innovate and optimize is often a win for consumers. But in the long run, consolidation rarely bodes well for a healthy, resilient economy with ample opportunity for upstarts.
As a business leader, I worry about a future where Amazon‘s gargantuan scale and reach allows it to set the terms in industry after industry, using its data, infrastructure and capital advantages to squeeze suppliers and nip would-be rivals in the bud. Policymakers are right to scrutinize whether updated antitrust frameworks are needed to ensure Amazon‘s efficiency gains aren‘t coming at the expense of competition and innovation.
Ethical Crossroads: The Path Forward
So where does all this leave us on the question of Amazon‘s ethics? On one hand, I feel deep unease at the human impact of the company‘s labor model, its strain on the environment, and its tightening grip on commerce. No company, however brilliant, should have so much unchecked power to set the terms of our economy. And no corporate mission, however ambitious, should come at the price of worker dignity.
At the same time, I recognize the immense value and utility Amazon has brought to customers and the way it has democratized access to goods and services for millions. I appreciate the way it has empowered so many businesses to reach a global market. And I commend the recent steps it has taken, from the Climate Pledge to a $15 minimum wage, to become a better corporate citizen, even if there‘s much further to go.
As an Amazon shareholder, I‘m heartened by the company‘s astounding growth and financial results. But I also believe that long-term value creation is inextricable from strong environmental, social and governance (ESG) performance. In fact, research has shown that companies with top-quartile ESG ratings tend to outperform the market over time while facing fewer existential risks (McKinsey, 2020).
This is the opportunity ahead for Amazon-to wield its power and ingenuity not just to dominate industries, but to model a better way of doing business for people and the planet. Some key priorities I‘d love to see:
- Overhauling productivity targets and disciplinary policies to focus on worker health and sustainable performance
- Giving rank-and-file workers a real voice in shaping their conditions and a bigger stake in the company‘s success
- Pulling forward the timeline for carbon neutrality and renewables and applying more resources to the effort
- Placing clear guardrails on the use of merchant data and more proactively supporting small businesses on the platform
- Engaging in open dialogue with regulators and communities and embracing policies that promote dynamic, open markets
None of this will be simple for a company wired to focus implacably on serving customers. But if Amazon can apply even a fraction of its trademark "customer obsession" to truly serving all its stakeholders-workers, sellers, communities, and the environment-it has the chance to become the standard-bearer for a more enlightened capitalism.
The ball is in your court, Amazon. I‘m watching with both hope and vigilance. Let‘s build an economy of shared prosperity, not a kingdom of monopoly power. Earn your crown by championing workers, not breaking them. Treat small businesses as true partners, not fodder to exploit. Solve for the long-term health of the planet, not just next quarter‘s earnings per share.
Do this, and you may yet emerge on the right side of history-as a company that delivered not just for customers and shareholders, but for the many. The choice between growth and ethics is a false one. It‘s time to lead with both.
