Amazon makes $2B push with new clean energy fund

on Jun 23, 2020
Updated: Sep 11, 2020
  • Amazon said it launched a new internal $2 billion venture-capital fund.
  • The new fund will seek investment opportunities in clean and green energy companies.
  • The fund is on top of Amazon CEO Jeff Bezos' $10 billion pledge from his personal wealth.

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E-commerce giant, Inc. (NASDAQ: AMZN) created a new internal venture-capital fund and will allocate $2 billion towards clean energy and green investments, The Wall Street Journal reported.

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Amazon’s environmental record has come under criticism from multiple watch groups and even its own employees. Most notably, a group named Amazon Employees for Climate Justice delivered an open letter to management which urged the company to commit towards generating 100% of its electricity from clean energy sources.

While the company announced in 2019 a plan to become carbon-neutral within 20 years, Amazon is taking its commitment to protecting the environment one step further with its new fund called The Climate Pledge Fund.

Goals and objectives

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The Climate Pledge Fund will seek companies in the transportation, energy generation, battery storage, manufacturing, and food and agriculture sectors, WSJ reported. Amazon will invest in companies that share its vision to create a more sustainable future and help it achieve its carbon-neutral goals.

Amazon is looking to transform its facilities to be fully powered by renewable and clean energy within five years from its wind and solar projects. Encouragingly, the company previously guided to achieve this milestone by 2030.

Amazon CEO Jeff Bezos said in a statement the fund will consider any company across the world of any size from pre-product startups to profit-generating enterprises.

Bezos, the world’s richest person, already pledged $10 billion from its personal fortune towards grants and other initiatives that will help scientists and activists “help preserve and protect the natural world,” according to WSJ.

Bezos is also a board member and private investor in Breakthrough Energy Ventures, a $1 billion fund that focuses on companies that offer potential breakthroughs in experimental energy technologies.

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Amazon has the experience

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Amazon’s $2 billion commitment would make it a large player in the fast-growing venture-capital space, according to WSJ. Global venture capital along with private equity investments in the green energy segment rose 6% in 2019 to $10.5 billion. 

Amazon has the necessary experience and knowledge to operate an internal venture-capital arm. The “Alexa Fund” was launched in 2015 to seek investment opportunities in companies that have unique expertise in voice technology.

The company most recently took a leadership role in a $700 million financing round of an electric-vehicle company called Rivian. Amazon already placed an order to purchase 100,000 of its electric-delivery vehicles that are expected to hit the road by 2021.

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